Recent data indicates that driver turnover remains high and that the cost of recruiting, training and incorporating a new driver into a fleet is between $7,000 and $10,000 per driver. This is a significant cost drain on carriers — just to maintain capacity.
Over the past four years, driver pay has increased much faster than the pay at competitive alternative jobs, such as construction and manufacturing. That is not to say, however, that driver pay is at a level where it compensates for some of the negative aspects of the work environment, such as long stretches away from home and pressure on the job — especially when compared to the construction and manufacturing jobs, which tend to draw from the same labor pool.
Yet it's not accurate to say that significant strides in driver pay have not been made. I still see the need to raise driver compensation overall. In fact, I expect that over the next four years we will see increases in pay that are similar to what we've seen over the past four years. But I don't think those increases will lead to a substantial reduction in turnover rates.
I also think that the pay differentials needed to attract drivers may actually become smaller. One reason is that there won't be a need to add substantial numbers of employees in the manufacturing sector, due to increases in productivity, consolidation, and more outsourcing of jobs overseas. Another reason is that the housing sector will see a decline in demand, freeing up another potential labor source for trucking.
Under these circumstances, then, why would we expect driver turnover to remain so high? For starters, the new drivers get the fleet's worst runs and often the worst customers to deal with. Drivers with seniority rightly receive preferential treatment on carrier freight demands.
I suggest that this has to continue since there is no other ladder to success within the driver-employee group. A carrier's accountant can go from billing to receivables, to asset management, to controller. A driver can go from driver to driver and possibly to dispatcher. Not exactly a high-incentive career path. So somewhere along the line, loyalty and continuing good performance have to be rewarded.
Some drivers will refuse to service certain accounts if they know they can get away with it — and sometimes they have very good reasons.
So carriers have to decide whether or not it's profitable to allow senior drivers to shun all the ugly freight and ugly customers. I suggest that it is definitely not.
A while back, I had the opportunity to research the best and worst shippers and carriers for a motor carrier group. The results showed that some firms were either almost uniformly bad or uniformly good to deal with. However, those that had some bad locations to service were for the most part not uniformly that way. That leads me to suggest that carriers need to work with that group to develop all of their facilities into driver-friendly locations.
At the same time, carriers do need to allocate a portion of their troublesome accounts to senior drivers. One way to handle this would be to limit this arrangement to six months per account. This will allow carriers to better document the problem through the eyes of their most experienced drivers. Then it would be up to management to correct the situation. Sometimes it's best just to give the trouble to your competition.
By placing your most experienced drivers into such a proactive role, you're demonstrating to the newer drivers that you're addressing the “difficult customer” issue. In addition, it puts shippers and receivers on notice that their behavior will affect the quality and availability of freight services.