The American Trucking Associations recently reported that the annualized turnover at large and small truckload fleets dropped by 12 percentage points in the first quarter of 2015. This news comes as a surprise since historically turnover has always spiked during the winter months. Is this a change to the normal first quarter blues?
Revenues, miles, and pay go down with the seasonal fluctuation in freight volumes. Naturally, drivers start looking for opportunities to jump ship. This did not appear to happen this time, as large fleets saw their turnover fall below 90 percent for the first time since 2011, and small fleets dropped to 83 percent.
In making this announcement, ATA Chief Economist Bob Costello offered a possible explanation — a temporary slowdown in freight movements and improved retention efforts. Whatever really happened to achieve these results, it is still safe to assume that turnover will return to the historical pattern by the first quarter of 2016.
Here are four suggestions for actions to take right now, nearly six months away, to make a positive impact on turnover when the next cycle begins:
- Don’t hide from it. When something as critically important as driver retention shows improvement, it is natural to credit something that happened at the time, such as an increase in driver pay and incentives. While this may have made an impact, seasonality will make its return and, unless further changes are made, turnover will go up in the first quarter of 2016 like it always has before.
- Teach your drivers not to hide from it. Start talking to your drivers now while earnings are strong to encourage them to budget for the first quarter. Continue to remind them in the fourth quarter that they will need to have something to draw from during the winter months. Drivers should understand the first quarter slowdown is an industrywide phenomenon and is not unique to your company or sector.
- Pay annual bonuses in Q2. Who doesn’t want extra money for the holidays? We all know drivers would prefer to have their end-of-year bonuses paid out in December. Chances are, their earnings are already at a high level leading up to the holidays. Instead, you might consider deferring their bonus payments to the second week of February when most households are low on cash and looking to recover from holiday shopping.
- Consider an attractive referral program. The first quarter of 2016 would be a prime time to announce a new referral bonus program for current drivers and to attack the market for new drivers by offering sign-on bonuses. If done effectively, these programs will position you with the capacity needed to jump on orders as customer ramp up production in the second and third quarters.
Driver retention is more than a seasonal strategy, of course, and any momentum gained from successful programs and initiatives in 2015 will carry over to 2016 and beyond. Turn your first quarter blues into long-term results!
For more information about how to use the latest research and driver engagement programs to keep drivers long term, please contact Stay Metrics.