The first quarter of 2015 closes with a surprising announcement to the trucking industry: a major decrease in driver turnover. Companies with more than $30 million in revenue are down to 84% turnover and smaller companies are down to 83%. This a 12% decrease for both! What happened in this quarter to cause such a change?
We’ve found 4 major reason why turnover has fallen:
- Slowdown in freight - Industry experts and economists, such as Bob Costello from the American Trucking Association, believe that a major reason for the decrease in driver turnover is due to the slowdown of freight throughout the industry. The amount of freight being transported was low in the first quarter of 2015, which led to less amount of loads for truckers. This caused drivers to be weary of leaving their carriers because they didn’t want to lose any more opportunity for hours on the road.
- Retention efforts - 2015 has also been a year of increased retention efforts across the industry because of the high turnover rate the past decade. In 2005 the turnover rate was around 130% and hasn’t gone below 90% until now. These high rates have led a number of companies to start implementing different retention tactics to steadily reduce their turnover rate.
Increase in driver pay - Some carriers have been able to increase driver pay, which has also had a major impact on keeping drivers. Several drivers shared they received increases of 4¢-14¢ a mile. Not all companies have the ability to increase their pay rate, so drivers have a harder time leaving a company with good pay. In an article about the decline in driver turnover, JOC.com mentions Swift Transportation, as a larger carrier who continues to raise their pay for drivers. They highlight the benefit of raising driver pay; it lowers their turnover, thus they spend less money on recruiting and advertising.
Recruitment and sign on bonuses - Recruitment has been a major theme in the trucking industry for years and this quarter it paid off for a lot of carriers. Sign on bonuses, where drivers had to sign a contract that forced them to work for the carrier for a certain amount of time, became a popular recruitment effort. If drivers are incentivized on a contract, it makes them think twice about leaving, which is really good for the short term turnover rates.
Will this decrease in the turnover rate last?
With freight loads increasing this quarter and sign on bonuses becoming a standard for most organizations, this low turnover rate will most likely begin to increase once again. The retention efforts and pay raises may help delay the rise back to the 97% industry average. In Transport Topics, Costello mentions that retention issues are still going to be a major problem for the industry. If companies want to keep their numbers stagnant, they will have to work extra hard on their retention efforts. Communicating with drivers about why they are staying and what could make them stay longer will be beneficial for carriers, especially while turnover rates are low.
What are you doing to lower your driver turnover rates? Tell us!
Keep on Truckin'!