Developing a retention strategy: A dozen slidesDec 15, 2015
When it comes to recruiting and retaining drivers, most carriers simply “don’t know what they don’t know,” and to devise driver retention plans based on management instincts or on what the competition is doing is a hit-and-miss process, at best—and often such programs are both expensive and counterproductive. The key is to gather actionable data, and trust it, explained executives with Stay Metrics in a Stifel Capital Markets Conference Call this week.
Stay Metrics Director of Research and Notre Dame Professor of Business Tim Judge characterized the driver shortage and high turnover as “a vicious cycle” in which aggressive recruiting means hiring drivers who are quick to move on.
“Investing in people is just like investing in anything else,” Judge said, referencing the book and film Moneyball that focused on the use of data in putting together a winning baseball team. “We’re very metrics based, and what really matters is what’s going to predict driver behavior.”
Indeed, as CEO Tim Hindes noted, the market this year is “tougher than it’s ever been,” with the pool of qualified drivers down by as much 40%. And while he credited carriers with adopting a “driver-centric” management approach and treating drivers as “assets to be protected,” misdirected resources remain a problem.
“Carriers can beat the trend,” said Hindes. “We see it day in and day-out: How can one carrier have significantly better retention than their peers? Because it works: Data tells a carrier where to focus.” (In the photo, Judge (left) and Hindes.)
Indeed, the common mistake is to focus solely on “extrinsic” issues, such as driver pay, when in fact “intrinsic” factors, such as making a driver feel valued, are often more important. Essentially, the single retention failure common to all carriers is “unmet expectations,” Hindes continued. But the nature of those expectations is as varied as the driver population and carrier types.
“Basically, every carrier is different and has different issues,” Hindes said.
So Stay Metrics, founded in 2012 and which currently supports 50 fleets representing 15,000 drivers, specializes in driver surveys and analytics. Setting benchmarks across the client base is critical to helping carriers understand where to focus and then to develop best practices to fit their needs.
“It’s not that pay isn’t a big issue, but in our predictive models we almost never find that’s the most important factor for why drivers are leaving,” said Judge, whose field is organizational behavior with a focus on attitudes and motivation. “We’re amazed when we talk to really large fleets who don’t often survey their drivers. You’ve got to start first-things-first. You’ve got got got to have data on driver attitudes.”
And, as Hindes added, the culture can’t be one where the management team is going to want to argue the data—to hold on to assumptions and practices not based on good data—if the company is going to improve.
“Turnover is not just a number,” Hindes said. “You don’t have to put up with 100-110%. You can do something about it.”
Conference call host and Stifel Research Managing Director John Larkin reported that the driver retention presentation drew more listeners than any other conference call over the past 12 years.
In a subsequent note to clients Larkin suggested that data analytics “may have as much potential to solve the driver recruiting and retention problem as does the development of autonomous trucks.”
“And with autonomous trucks likely to incur headwinds from governmental regulatory authorities over safety concerns, a well implemented data analytics focused program might well be the near- to medium-term answer to successfully coping with the driver shortage,” he said. “After all, he who has the drivers wins.”
The slides above represent a sample of the more than 50 presented on the rapid-fire Stifel call. The complete presentation is available here from Stay Metrics.