Fleets Boost Retention Efforts as Drivers Shop for Better Pay

This story appears in the April 4 print edition of Transport Topics.

Fleets’ driver retention and recruitment moves are accelerating as pay increases proliferate and drivers begin to chase better-paying jobs, industry officials said.

“Good drivers are considering moving to another fleet,” a new development spurred by an initial round of pay increases, said Gordon Klemp, president of the National Transportation Institute, which surveys fleet trends.

“We are starting to get churn,” as drivers move from one fleet to another and the overall supply remains the same, Klemp said.

While about 10% of fleets have raised pay so far this year, his survey of 304 truckload fleets found that 86% of dry-van carriers expect per-mile increases ranging from 3 cents to 5 cents, or roughly 10%, before the year ends.

“All of us, if we are going to be successful, are going to have to have a good plan to recruit and retain drivers,” said Robert Low, CEO of Prime Inc., speaking March 15 at the Truckload Carriers Association annual meeting.

“These [drivers] aren’t making enough money for the sacrifices and the work they do,” Low said. “What good are higher rates going to do for you if you don’t have a driver for that truck?”

Pay pressure is building along with freight demand growth, including the 4.2% rise in American Trucking Associations’ tonnage index during February from a year earlier and a 64% increase in spot market loads posted by shippers on TransCore’s load board in that month, compared with February 2010.

Pay plans now feature multiple incentives such as empty-mile pay that make the overall packages harder for drivers to understand, Klemp said.

“It’s a very difficult [pay] market for drivers to sort out because of that complexity,” he said. “Make drivers understand how great they have it where they are,” he suggested. “Get ’em hooked on you and keep them.”

“Show them the money they will lose if they leave you,” said Barry Pottle, CEO of Pottle’s Transportation.

Pottle’s keeps driver turnover below 20% by showing drivers how they avoid losing vacation pay and benefits if they stay with the company rather than quit and then try to come back.

Pottle said steps such as paying drivers if their trucks break down and giving them regular days off at home help to keep drivers satisfied.

“We don’t want his wife saying, ‘You can drive a dump truck and stay home every night,’ ’’ Pottle said.

Recruiting efforts are being stepped up as well, several sources indicated.

“During 2010, carriers frequently mentioned that the recruitment and retention of drivers would re-emerge as an issue,” BB&T Capital Markets analyst Thom Albrecht wrote in a March 14 report. “The potential future problem is now at hand.”

“One fleet told us that inbound calls from driver candidates dropped from 38,000 in 2009 to 25,000 last year (with minimal fleet shrinkage) and despite spending 20-plus percent more on advertising,” he said.

Industry consultant Steve Prelipp, a former driver-recruiting executive for Schneider National, said the growing need for drivers prompted three times as many fleets to recruit drivers at the Mid-America Trucking Show last week compared with a year ago.

Another indicator is a driver recruiting index published by Access Advertising LLC, Kansas City, Mo., that’s based on newspaper classified advertising.

Access Advertising’s index stood last week at 526, about 40% above both late March 2010 and January 2011 and just below the peak of 533, reached on March 13.

Driver turnover now has resumed and has reached an estimated 60%, Albrecht said in his report.

That’s an increase from historic lows below 50% during 2010 that were reported by American Trucking Associations. ATA’s turnover report is due out later in April.

John Kaburick, president of Earl L. Henderson Trucking, Salem, Ill., said he believes turnover will rise further.

“We could see a spike in turnover, but I think it will come down over time,” he told Transport Topics. “As [carrier] revenue goes up, that will attract a higher quality of driver with increased pay.”

Kelly Anderson, who heads retention and recruiting firm Impact Transportation Solutions, Neosho, Mo., said he believes industry turnover could hit a record of 160% this year, far above the previous mark of 136%, last reached in 2005.

Speaking at TCA, Anderson touted positive early company contacts as the key to retaining drivers and minimizing turnover because 75% of drivers leave in the first 90 days.

“Most people wait until the driver says he’s going to quit before they do anything,” said Anderson, who advocates steps such as early personal involvement by the fleet manager and prompt delivery of the first paycheck as proven steps to keep drivers.

Anderson said he also sees a new retention tool.

“The carriers who got into social media found it is a great communication tool for retention,” he said, by quickly delivering company information.