Driver Turnover Rate Rises

This story appears in the Sept. 27 print edition of Transport Topics.

Driver turnover rose measurably for the first time in nearly four years during the second quarter, American Trucking Associations reported, as increasing freight volumes gave drivers more options.

Turnover at large truckload carriers climbed from the record low 39% in the first quarter to 49% in the second quarter. That still leaves turnover far below the large fleet peak of 136% reached in both 2004 and 2005.

Turnover at small truckload fleets rose from 35% in the first quarter to 46% in the second quarter.

Driver churn at less-than-truckload fleets, while a much lower rate than in the truckload sector, increased by 50%.

The last time turnover increased was in the third quarter of 2006.

Turnover hasn’t been this high since the second quarter of 2009, when the rate was 52% at large truckload fleets, those with revenue of more than $30 million annually. Turnover at large fleets inched up by a single percentage point to 44% from the third to the fourth quarter.

“We saw the same things that others saw in the truckload industry,” said Scott Arves, chief executive officer of Transport America, which ranks No. 85 on the Transport Topics 100 list of the largest U.S. and Canadian for-hire carriers. He said turnover spiked in the second quarter and has declined again in the third quarter.

Arves said the spike was triggered by small-package and LTL carriers who hired more drivers in the second quarter with promises of additional home time, prompting some drivers to switch employers.

ATA linked the increase to a 6.6% rise in freight tonnage during the first half of this year, based on ATA’s monthly report.

Industry consultant Steve Prelipp, a former recruiting executive at Schneider National and other carriers, offered another explanation: “There are more job choices than before.”

“Fleets are looking for drivers aggressively with sign-on bonuses,” Prelipp said. “Until February or March, companies weren’t worried about recruiting drivers because there wasn’t much freight. When freight picked up, there was a mad dash to pick up drivers.”

While higher pay is a factor in rising turnover, Prelipp explained, “it is more a function of options. When we were in a deep recession, people held onto jobs to make sure they had one and to get a paycheck every week.”

Like other truckload fleets, Transport America continues to hire drivers, focusing on replacements for those who leave.

“We’re not trying to grow the fleet at this time,” Arves said. “Most in the truckload business are trying to stabilize their fleets at a specific number [of drivers and power units].”

To attract drivers, Arves said, Transport America, Eagan, Minn., is continuing to focus attention on drivers, including his personal visits recently during Driver Appreciation Week.

In addition, the company strives to be more responsive to drivers’ wishes, he said, by handling more dedicated services with greater home time.

Overall trucking employment remained at steady levels despite an increase of about 3% in hiring office employees at large truckload fleets, which ATA said probably was a result of increased driver retention and recruitment activities.

“Now, drivers see options out there, both in the advertising and in talking to people at truck stops, which makes them think maybe it’s time to move up to a better job,” Prelipp said.

Even companies that haven’t increased pay are attractive to drivers who may want to switch, he explained, if the potential new employers are paying more than the driver received at his current carrier.

“Carriers are going to have trouble filling their trucks” as the economy recovers further, in part because CSA and the re-employment screening program will disqualify some drivers, Prelipp said.

“Carriers that advertise and recruit well will do better,” he predicted, adding that carriers need to focus on both an effective recruiting program with fast hiring and on effective retention processes.

Firms that sell recruitment advertising also report rising activity.

“[Fleets] are all scrambling to find drivers,” said Jay Wommack, chief executive of Vertical Alliance Group, which owns the job website Bubbajunk.com. “The pool is shrinking.”

Revenue from driver recruiting advertising is up 80% since January, Wommack said.

Erin Young, divisional director of client services for ACS Advertising, said staff in the client services section has doubled to handle what she termed “tremendous” growth as driver recruiting and turnover have become an industry focus.

“People who weren’t advertising have come out of the woodwork,” she said. “It is a tough market; the quality of driver [applicants] is not there now. In the last two years, everybody upped their standards when they didn’t need drivers.”

Turnover increased to 9% at less-than-truckload carriers, from 6% in last year’s second quarter.