Driver pay not the answer to the driver shortage dilemma
October 9, 2012
LAS VEGAS, Nev. -- Driver pay may be an important issue, and perhaps the one the gets the most attention when addressing the driver shortage, but it's not the best answer, according to a panel of US trucking executives speaking at the ATA...
LAS VEGAS, Nev. — Driver pay may be an important issue, and perhaps the one the gets the most attention when addressing the driver shortage, but it’s not the best answer, according to a panel of US trucking executives speaking at the ATA Management Conference this morning.
Placing drivers in quality equipment and getting them home more often are just as important, if not more so, than raising pay, said Derek Leathers, president and COO of Werner Enterprises.
Werner reworked its network to get more of its drivers home on a weekly basis. Back in 2008 only 38% of its drivers we’re getting home on a weekly basis; now it’s up to 71%. Werner hires a lot of drivers out of driving school so its turnover rate is around 85%, but getting more of them home on a weekly basis helped keep the turnover rate from climbing higher, Leathers said.
“This is hard work that we are asking them to do and I would argue that with the new generation it’s not just the trucking they don’t want to do; it’s the hard work they don’t want to do,” Leathers said in explaining that concentrating on more home time also helps with recruitment.
Kevin Burch, president of Jet Express, agreed that pay is not the most important factor in driver retention. He said how a carrier goes about recruiting drivers goes a long way towards reducing the likelihood of turnover.
“Drivers want to be told what they are going to be doing and how they are going to be doing it eye to eye. There are too many companies passing the buck,” Burch said.
Yet even if driver pay is not the top issue, it is stil a critical one. The panelists were asked what a carrier needed to pay to make driving more attractive. Leathers said it’s not easy to come up with a number. There are 140 different pay packages in his company ranging from pay around $30,000 for a first year driver to up to $60,000 for experienced drivers on difficult runs. But here is where it gets complicated:
“There are places in our network where people are making $30,000 and the turnover is almost zero. It could very well be that the highest paying packages in my fleet may be the ones most needing of incentives,” Leathers said, explaining that it’s the complexity of certain runs that determine turnover.
He also questioned the wisdom of industry thinking of moving towards pay by the hour for drivers.
“It’s dangerous to disconnect how drivers are paid from how the carrier is paid. Shippers will continue to want to pay us by the mile,” Leathers said.
What would help with both recruitment and retention is reducing the upfront training costs for new drivers, which can range from $4,000 to $7,000. Yet the panel also heard there is drastic drop in government funding for truck driver training.
The panelists were also not too keen on leveraging technology as either a recruitment or retention tool. Burch questioned how fleets can spend millions on dispatch software yet spend no time training dispatchers how to communicate effectively with drivers.
They didn’t see automated transmissions as particularly helpful either.
“Deciding to focus on switching to automated transmissions on a large scale would be more dependent on the resale value of the trucks because we don’t see them as a big draw for recruiting,” Leathers said.
Truck News is Canada's leading trucking newspaper - news and information for trucking companies, owner/operators, truck drivers and logistics professionals working in the Canadian trucking industry. All posts by Truck News