“Do you want to solve the driver shortage?”
Asking this question will likely result in a 50/50 split of answers in the trucking industry. It might also ignite a spontaneous debate:
Does the industry have a driver shortage problem or a driver retention problem?
Both answers are correct.
Driver shortages have always been a problem for motor carriers, but the labor supply has only gotten worse during pandemic challenges and setbacks.
The number of tractor-trailer drivers on fleet payrolls was 1,797,710 in May 2020, which was 58,420 less than May 2019. As many fleets can attest, some drivers took time off during the early lockdown period and never came back.
A strong freight market in the latter half of 2020 and into 2021 created an urgent need for fleets to hire more drivers. And the demand could remain strong for the foreseeable future. A study by the American Trucking Associations (ATA) forecasts the industry needs to hire an average of 110,000 new drivers every year over the next decade to keep up with retirements and economic growth.
Driver retention is perhaps the more immediate crisis. On average, fleets with more than $30 million in annual revenue had a 90% turnover rate in 2020, according to the most recent ATA statistics. Smaller truckload fleets (less than $30 million in revenue) had to replace 69% of their drivers in 2020.
High turnover exacerbates the driver shortage and is a drain on fleet profitability. Industry estimates count the total replacement cost of a single driver anywhere from $8,200 to $11,500, on average.
Turnover is also a safety concern. Newly hired drivers are more likely to be in accidents as they adjust to different equipment, technology, routes, and other workplace changes.
Entry-level retention strategies
No matter how you answer the first question, the need to attract and retain safe and productive drivers will only grow stronger. Some approaches that have worked in the past include:
- Raising Pay. Keeping pay rates competitive is a must but carriers should also ensure that driver pay is consistent from week to week. Compensating for detention and other activities that cause drivers to lose productive time can help keep pay consistent.
- Offering referral bonuses. Reward drivers who represent your brand well by offering a recruiting bonus that is based on all miles their job referrals run. This will give drivers more of an incentive to mentor new drivers and help with retention.
- Upgrading equipment. Drivers want creature comforts and more security from unexpected breakdowns that could directly impact their livelihoods.
- Finding driver-friendly freight. If you can, improve your customers and freight lanes to get drivers more miles making their schedules and home time more predictable.
- Ramping up the amenities. Offer subscriptions to mobile entertainment options and give company facilities the comforts of home (such as food, showers, laundry, and other conveniences). Also, obtain reserved truck parking at locations on drivers’ routes.
- Showing continued appreciation. Get all company departments involved in planning events and expressing gratitude to drivers and their families. And go the extra mile during National Truck Driver Appreciation Week (NTDAW) each year.
Transflo recently published a whitepaper that serves as a guidebook for how fleets can reach the next level of driver engagement and retention. Increasingly, the most effective strategies must be supported by technology that can simplify work for drivers and strengthen all-important human connections.
To level up on your retention strategies, start by downloading the whitepaper here.