The trend for driver turnover was positive in 2015. It started with a drop of 12 percentage points in the first quarter, measured on an annualized basis.
“Clearly, the decline in driver turnover in the first quarter was significant,” stated Bob Costello, chief economist of the American Trucking Associations, when the results were announced last July. “But what is less clear is why it dropped so much and whether turnover will continue to remain low.”
In the second quarter, the turnover at large truckload carriers rose from 84 percent to 87 percent. Meanwhile, small carriers saw theirs fall to 76 percent.
Turnover statistics for the third and fourth quarter are not yet available, but they will likely show improvement as well. The macro-level trends like slow economic growth and driver pay increases played a factor in improved driver retention, but something much more significant is happening behind the scenes.
A Tale of Two Leaders
A few years ago, I was talking to the owner of a smaller carrier about the services Stay Metrics offers for driver retention. The owner was a curmudgeonly old sort of character, loud, and unashamed to vocalize his opinions.
“I don’t buy into recognition or rewards or thanking my drivers. You know how I thank them? I give them a damn paycheck every Friday,” he said.
Contrast this to a polite southern gentleman who called a few days later. This CEO was intrigued by using a private-branded loyalty program to thank his drivers.
“You know how I feel about my drivers?” he asked with his voice turning emotional. “I want my best drivers to take their families on vacation every year, on me.”
This progressive CEO had staffed his company at all levels with people who understand the value of drivers to the enterprise. While sales were focused on growing the company, the inside management team was building a culture that was attractive to drivers.
The CEO was able to grow by saying “Yes” to customers at every opportunity.
“Can you handle 20 more lanes a week?” Yes. “Can you take five more loads to Detroit?” Yes.
The company was able to service customers by putting drivers above all else. Any dispatcher or employee who spoke disparagingly about a single driver or, God forbid, about drivers as a whole were quickly escorted out of the building.
This company has since doubled in size to 500 drivers after we spoke.
Meanwhile, the companies with rigid, old-school management continue to experience high turnover and their chances for success are fading.
“Hell, we’re truckers for goodness sake. Why would we hire guys with soft skills?” they continue to wonder.
What we’re learning
After four years of wrenching on this machine of driver retention, it has become clear that what matters most is the quality of the management team. The measure of quality goes beyond the execution skills to glean out inefficiencies.
Owners, shareholders and investors are no longer buying the “everyone has it bad” retention argument.
In every sector today can be found small and large companies beating the odds and challenging the status quo by changing their management style to become “softisticated”.
Change Starts at The Top
Change has to start at the top. Hiring a few soft-skilled people does not work if the company’s DNA is driver adverse. Within the first 10 minutes of speaking with a CEO, I can fairly assess what the company’s retention rate is. Successful companies, we have found, are led by CEOs who are not scripted when talking about drivers; they speak sincerely, empathetically and respectful about drivers.
By contrast, CEOs that start a sentence with “the damn drivers” may not realize, or even care, that similar conversations are happening within their walls every day. These conversations and thought patterns are the DNA of their companies and put them at a competitive disadvantage.
As we prepare to close 2015, Stay Metrics would like to extend our gratitude to the progressive CEOs and managers in this industry who continue to make a difference with their passion for servant-based leadership. Your efforts are making a difference in driver retention and will continue to be rewarded in this New Year and beyond.
May you and yours have a wonderful holiday season and a prosperous New Year.