If you ever feel your 'idea well' has run dry when it comes to dealing with the chronic shortage of truck drivers in this industry, I suggest giving Kenneth Baylor a call. He's the VP of labor relations for Republic Services, the country's 3rd largest refuse hauler, based down in Ft. Lauderdale, FL. When you look up the definition of the word 'enthusiasm' in the dictonary, you'll find his photo and name -- he gets as fired up as an NFL coach when he starts talking about finding and keeping good people in the refuse business.
He'll tell you that transportation companies of all stripes, but especially refuse operators, are all now entering a critical phase: the labor pool is shrinking as fewer and fewer people want the "dirty job" of driving a truck. Add to that the huge financial impact employee turnover is having on the bottom line of transportation firms today, Baylor said, and you get a recipe for major trouble down the road.
"This is a major league issue for our industry," said in a recent speech. "Our average turnover rate is 19.3% in this industry - among drivers its 23.2%. We also have a lot of ‘churn‘ in this business, where we trade 25% to 35% of our employees with each other in the industry." He explained that the cost of turnover and churn - even though far lower than the 115% level currently experienced by truckload carriers - is astronomical to waste haulers.
"The cost to replace one employee - from hiring through training - is on average 50% of their salary. By some estimates, it‘s 200%," he said. "In the refuse industry, which had a payroll of $10 billion in 2001, the cost of replacing employees in just financial terms is horrendous. But when employees leave, so do institutional knowledge, skills, and relationships they‘ve forged with customers. That has even larger impact to your business as time goes on."
Baylor said that while fleets must offer competitive wages and benefits, focusing just on monetary benefits alone works only until the competitor down the street offers more. "It‘s not just about a paycheck: employees want recognition for their efforts, more flexible work hours, financial incentives, and most importantly to be part of a team - to know that they are going to be included, that their advice will be sought."
He stressed that the only competitive advantage waste and freight haulers have today are their people - and that‘s why employee attraction and retention efforts are going to be far more vital in the near future. "Look, we all use roughly the same equipment and technology to perform the work we do. The only thing that makes us different is our people - and they are the ones delivering the service to our customers," Baylor said. "In this business, we tend to focus on the 8% of the employees that give us trouble - not the ‘Steady Eddies‘ or the super stars."
He pointed to the mantra espoused by FedEx Corp.‘s Chairman & CEO Frederick Smith: People, Service, Profits. "If you take care of your people, they provide excellent customer service, and that delivers profits for your company," Baylor said. "That‘s the kind of environment we need to create in this industry."
You can argue about whether FedEx really delivers on that promise, but I'll tell you one thing -- Baylor tries to put it into practice every day. Once of the biggest points he makes in a speech -- and let me tell you, you need to hear this guy give a speech -- centers around the title of a book published a few years back called 'When Pride Still Mattered.'
"Let me tell you something -- Pride matters today. It never went away," he stressed. "When your employees come up to you and say, 'Who used my truck last Saturday?' THAT is pride at work. THAT is what you want to hear -- they are taking ownership of their job and you need to keep them fired up like that. We WANT them to own that iron, to consider it and their job 'theirs' because that is how you get a motivated, hard working employee to stick with you for years to come."