The balance of power has shifted to job candidates in the transportation industry as employees hop between jobs for better pay and employers see vacant positions stay open as long as six months in a post-COVID market, according to a new study.
In its 2022 U.S. Transportation Spotlight Report, background check provider HireRight surveyed industry workers about recruitment and retention data over the past year. In addition to survey data, the report includes commentary from industry leaders.
The report indicates that recruitment challenges have caused a reduction in overall headcount for many transportation companies. About 29% of respondents said their company workforce decreased in size last year, with the most common reasons being the inability to find and hire qualified employees and employees not returning after extended leave. Additionally, 47% of respondents experienced higher resignation rates than expected, 42% had higher turnover rates for new hires than normal, and 25% reported having positions going unfilled for over six months.
The survey was conducted in March and had 324 respondents, with 60% working in for-hire trucking, 20% in private fleets, 8% with buses, and 12% in other transportation sectors.
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Searching for better pay was the No. 1 cause of commercial driver turnover, with 60% of cases of employee turnover citing a desire for more money as a cause. This is a 2% increase from 2021, but a starker increase of 12% since last year and 15% since 2019. A desire for better benefits was also mentioned in 33% of driver turnover cases, a 6% increase from last year.
“In markets where the spot market gets very hot, and then pricing in general gets hot, there becomes a frenzy for drivers, and driver pay invariably goes up,” said Tim Hindes, manager of engagement products at Tenstreet, a provider of driver recruiting software. Spot rates are currently volatile, peaking in December of last year, according to a study between Bloomberg and Truckstop.com.
“Most carriers are going to watch the market, they’re going to watch what the big guys do, and if the big guys start putting in pay increases, then they’re going to follow suit," Hindes added. "The perspective of a driver is, ‘Hey, the market’s moving and there’s an awful lot going on. Driver pay is going up everywhere.’ A natural psychological response is, ‘Am I getting mine?’ So when we see drivers exiting a company, and they’re saying one of the top things in their mind was driver pay, what they’re really saying in the last year’s market is, ‘I understand that the pay went up quite a bit, and I want to participate in that.’”
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Additionally, broad concerns over high inflation and a possible recession could lead workers to seek higher pay to protect themselves amidst general economic uncertainty. In response, two-thirds of respondents said their companies are increasing pay, and 40% say benefits are improving.
It’s a job applicant’s market as employers compete to entice candidates with more lucrative offers, and employers don’t see this trend reversing, with 88% of respondents saying qualified job candidates will remain a top recruitment challenge in 2022, and 76% expecting it to be a major challenge through 2025.
With turnover so high, many companies are shifting their focus to retention rather than recruitment, as 86% of respondents said their companies are making additional investments in retention strategies, a higher number than the two-thirds of respondents who report higher investment in recruitment.
“In an industry overinvesting in recruiting due to widely-accepted turnover, I think the past two years has made it evident that the ROI of shifting resources and energy to retention efforts is valuable to companies and employees alike,” said Leah Shaver, president and CEO of the National Transportation Institute, which collects and analyzes data on driver and technician wages.
“Drown out the noise of your competitors by starting retention efforts before an employee is hired and continue year-round by developing internal marketing campaigns that remind your people why they chose you, what they liked about you, what their co-workers love about you, and why they should stay,” Shaver said. “Identify mentors, rapid and regular recognition, brand ambassadors, and make sure that everyone in the company is as invested in their work and each other as you are.”
See also: Now is not the time to pull back on driver recruiting, retention
Todd Simo, HireRight’s managing director of transportation, summarized the report in a press release, saying, “This past year has been particularly difficult for the transportation industry with the continuation of the COVID-19 pandemic, supply chain disruptions, and, of course, the labor shortage. Providing a better overall experience for drivers is vital, as U.S. transportation employers are all competing for a limited pool of qualified candidates. This year’s survey found that companies are introducing innovative new recruitment and retention activities, such as incentive-based pay plans, reward programs, and well-being initiatives, to both attract candidates and to improve overall job satisfaction and employee engagement in their existing workforce.”
The full report is available here.
