Management – Human Resources: Growing a better driver force
July 1, 2000
Part I of a SeriesAs the potential for the continued rapid growth of our industry remains hostage to the ever-tightening grip of the driver shortage, it's important to take a step back from the often ...
As the potential for the continued rapid growth of our industry remains hostage to the ever-tightening grip of the driver shortage, it’s important to take a step back from the often frantic attempts to find new drivers and ask ourselves an essential question: is the driver shortage more a consequence of shrinking recruitment opportunities or of inadequate retention strategies?
Canada’s existing complement of 230,000 truck drivers has grown over 13 per cent since 1989, compared with a nine per cent overall employment growth in the country. Yet the total is about 50,000 short of what our industry needs to handle the increase in business it expects over the next five years. Trucking, which grew at a seven per cent clip last year, is outpacing both the transportation industry and the overall economy in terms of growth. The resulting manpower demand is running dead smack against labor demographic realities. The average Canadian truck driver, now more than 50 years old, is expected to retire within the next decade and carriers will find it increasingly harder to replace him. The workforce segment that has traditionally been trucking’s prime source of new labor for decades – white males aged 20 to 24 – is shrinking. The manpower crunch is already causing some carriers to park their rigs even though the demand for truck transport is at record levels.
The driver shortage has grown into such a nagging issue that 65 per cent of fleet managers responding to a Private Motor Truck Council survey conducted in March, in the midst of the skyrocketing fuel price crisis, placed it ahead of rising fuel costs in terms of importance. The extent of the problem is evident but getting to the root of the driver shortage – key to effectively dealing with it – is more elusive.
The Upper Great Plains Transportation Institute, a respected industry think tank attached to North Dakota State University, certainly indicated what it thought of the recruitment vs. retention debate when it was commissioned to study driver satisfaction eight years ago. The study, which focused on drivers who had recently changed jobs, provocatively concluded “there is not a shortage of drivers, but a lack of human resource strategies to take advantage of the available pool.”
More recent research conducted by the U.S. Department of Labor found that our American counterparts would have to hire, on average, 403,000 truck drivers each year to fill empty seats till 2005. But more than 320,000 of those hires – or about 80 per cent – are the result of intra-industry turnover, or “driver churn”. On an annual basis the industry will need only 34,000 drivers (eight per cent) because of business growth and just 48,000 (12 per cent) due to driver attrition, either from retirement or leaving the profession altogether.
“While industry growth, competition from other sections of the economy, and the demographics of those who chose either to enter or avoid the truck driving profession are important factors in the driver shortage equation, the single most important feature of this condition is churning,” concluded a driver retention study conducted by the well-known Gallup Organization.
In our own backyard the recruitment vs. retention debate is not as clear-cut. Almost half the carriers included in a study published by the Canadian Trucking Human Resources Council a little more than two years ago indicated an annual turnover rate of less than five per cent. Yet reports of turnover rates as high as 100 per cent in certain segments of our industry impressed the study’s authors enough for them to state that their low-turnover findings “do not reflect the industry at large.” The study’s survey of drivers also found that more than half had changed employers within the last five years, 19 per cent having changed employers three or more times.
“There is a whole lot of energy being wasted in Rick hiring a guy away from Michelle, and Michelle hiring a guy from George, and George hiring a guy from Tom. It’s the same guys working for different companies,” Ray Barton, president of R. Barton and Associates, a consulting group dealing with retention issues, recently told industry human resource professionals gathered at the third annual North American Driver Training Symposium, hosted by the Canadian Trucking Human Resources Council. “If 80 per cent of new hirings are for people playing musical chairs, and it costs $5,000-$8,000 to replace a driver, think of the total costs involved.”
And that doesn’t take into account the incalculable loss of “corporate memory”, as Big Freight’s Catherine Cronin aptly describes the knowledge lost when an experienced driver leaves for the carrier down the street.
“When you lose a person you lose the memory of all the people he has dealt with, the customers he has worked with, the systems, the processes, the knowledge he brought with him to the job,” says Cronin, director of human capital for the Steinbach, Man.- headquartered carrier.
But perhaps reaching agreement on the exact ranking of driver churn in the grab bag of evils that perpetuate the driver shortage is not as important as acknowledging the industry’s – your own company’s – shortcomings on driver retention. As Dr. Angelika Mellema, a psychologist who provides human resource consulting to the industry, puts it: “With the driver shortage you face in this industry, there is very little room to ignore any of the factors that you can address.”
What then contributes to driver churn and what can you do to reduce it in your fleet? Interestingly enough, Leo Tolstoy may have described it best in his late 19th century novel Anna Karenina: “Happy families are all alike, every unhappy family is unhappy in its own way.” As Dr. Mellema explains, turnover is multi-faceted. There are many factors and there is not one quick fix.
“Instead of going out and seeing what other companies are doing (to reduce turnover) and doing it too, it’s really important to look at your organization first because turnover very often has to do with the specific climate and culture of your organization,” says Dr. Mellema, president of the Mellema Behavioural Sciences Group in Toronto.
With that in mind, let’s look at some of the most common issues identified with turnover.
SELECTION PROCEDURES: Mellema says the quality of a company’s employee selection procedures is a predictor of turnover and she has found that trucking has a dearth of good selection practices.
“There is some technical and road testing but there is very little attention given to a more standardized interview to look at personality assessment. Do the criteria you use to select a driver actually predict the performance of the driver?” she questions, adding that even if the driver shortage is forcing carriers to hire people they wouldn’t otherwise consider, investing in personality assessments would provide a better understanding of each new hire’s weaknesses.
“If because of the driver shortage you have to hire anybody with a pulse, at least know whom you are hiring,” she advises.
ORIENTATION PROGRAMS: Barton says when one of his trucking clients scrutinized its turnover it found that 60 per cent of the departures were occurring within the first six months of the hiring date, which speaks to improper driver selection as well as the lack of appropriate orientation programs for new recruits. Many new hires, particularly those without a prior knowledge of the industry, may be shocked at what they’ve gotten into.
“In terms of having a person made aware of what his new job is going to involve, unfortunately, a lot of companies have for some time not given potential employees proper orientation,” says George Smagala, a 23-year veteran driver for Labatt Breweries in Toronto and a member of the Ontario Road Knights Team. “I give the orientation to new employees…and I hear horror stories about the previous outfits they’ve worked for where they’re essentially signed on, handed some keys and down the road they go. It’s almost horrific the lack of orientation people get when they start a new job.”
PAY SCALES: Low pay is a
nother flash point. Ask any group of 10 drivers about their major beefs and low pay is more likely than not to be at the top of their hit list.
“In 1988 the private carrier I worked for paid me 36.5 cents a mile and they covered pretty well everything I did while I was on the road, plus a full benefits package,” says Smagala. “Judging by the recruitment ads today, most driving jobs are paying less than that and this is 12 years later. It would appear the value of the driver has gone down.”
Drivers answering the Motortruck/Truck News annual job satisfaction survey have consistently placed better pay as the major reason they would leave their present carrier for another. But Dr. Mellema says the pay issue is more complex than it appears on the surface. Employees may say pay is extremely important to them but if you dig further what is really important to them is fairness in how pay is distributed. She says studies across industries and across jobs show that pay actually has a very small impact on turnover.
“You have to be competitive in the market place but how the allotment and distribution of pay throughout the organization is perceived is much more important than the pay. Is it fair? Are the loads distributed fairly so one driver can make as much money as the next one? Is the driver paid for extra work and if not what are the rules the company goes by to determine that and are they clearly communicated,” she says. “When you look at pay levels in this industry it’s mostly market driven — the company next door is increasing its rates so you’re increasing your rates because the perception is if you don’t your drivers will leave. Pay is not linked to driver performance and driver performance is addressed, in my experience, very haphazardly.”
She adds that a link between performance and driver pay has been found to substantially reduce turnover across industries and across jobs.
INCENTIVES PROGRAMS: Barton, who has been working with the Canada Safety Council to produce a practical manual for developing and revising incentive programs for drivers, relates the story of one driver who complained that “the only way to get a pat on the back around here is to photocopy my hand, put it on the wall, and rub my back against it.” It’s a story worth a chuckle but it belies a not-so-funny reality: many carriers are missing out on the opportunity to enhance driver performance by tying it to appropriate recognition or rewards and leveraging the resulting boost in employee morale to reduce driver turnover. The Motortruck/Truck News survey for the past four years has indicated a clear chasm of opinion on the issue between drivers and the carriers which employ them. For example, 88.5 per cent of drivers said they should be rewarded for accident-free mileage but only 29 per cent indicated their carrier was providing such an incentive. And 66 per cent wanted rewards for fuel-efficient driving yet only seven per cent of them were receiving such rewards from their carrier.
CAREER PATH: Studies on job satisfaction have found a strong desire among drivers for a career path. Eighty three per cent of drivers surveyed for another Upper Great Plains Transportation Institute study indicated that career advancement was important to them. Yet 54 per cent perceived the opportunities for advancement in their company as poor. Similarly, 54 per cent of them had the same perception about opportunities in the industry. The institute’s latest study, released this spring and answered by 736 drivers employed by 11 TL fleets, including Alberta’s Mullen Trucking Ltd, found that drivers were interested in a variety of job responsibilities in addition to driving. More than 60 per cent said they wanted to be involved in customer service; 40 per cent wanted to be involved in driver training; 56 per cent wanted to be part of a cost-reduction team; and 43 per cent wanted to supervise other drivers. In addition, 66 per cent of the drivers surveyed said they would be more satisfied with their job if it included a realistic career path, while 60 per cent said they would be less likely to quit their job. (See the Create the Right Path sidebar starting on page 28).
Labatt’s Smagala says he remains in the industry after 23 years because his employer recognizes that he is capable of expanding his horizons and affords him the opportunity to do so with both appropriate training and responsibilities in addition to driving. He has researched and rewritten his company’s driver orientation, evaluation and training package, he’s been involved in driver training and taken instruction in several areas, including dispatch and logistics.
However, one of the stumbling blocks to creating such opportunities for drivers may be false management perceptions of what drivers are looking for in a career. The study also surveyed 113 managers of TL fleets to determine how management attitudes towards a career path for drivers compared with the attitudes of the people behind the wheel demanding it. It found the differences to be “somewhat disturbing.”
For instance, only 38 per cent of the managers thought drivers would be interested in working in other areas in addition to driving, while 62 per cent of drivers indicated they were. And while 83 per cent of the drivers surveyed indicated they would be interested in opportunities for personal growth, only 64 per cent of the managers thought drivers were interested.
“Management tends to misjudge what people want in their job,” explains Gene Griffin, one of the four authors of the driver study.
LONG-TERM SECURITY: Smagala says too many carriers talk about drivers being part of the family yet insist on hiring part-time or temporary drivers in order to reduce costs and be able to lay them off when business slows down.
“How much loyalty do you really expect from drivers who can arguably be considered migrant workers?” he asks. “The number of people who change jobs is constant. Migrant workers is a very appropriate term for many truck drivers.”
Big Freight’s Cronin believes people are becoming such an integral part of the solution-oriented partnering many carriers are moving towards that better human resources strategies must evolve. And under this kind of corporate Darwinism the companies that can’t adapt fast enough will face extinction.