Written by: Jim Park - Heavy Duty Trucking: On The Road Blog (used with permission)
In trying to bolster its roster of drivers, trucking has a three-front battle on its hands. First, to remedy the long-term and demographically unavoidable shortfall between the number of open seats and the bums needed to fill them; second, to prevent employed drivers from heading off to other carriers; and lastly, to get drivers in the door and hired in the first place.
You may think I have these priorities ordered incorrectly, but I don't. It depends on your perspective, and I think that makes a big difference in how you view the problem. As an industry, trucking faces a massive labor shortage in the coming years — we'll need nearly 240,000 additional drivers by 2020 according to the American Trucking Associations' estimates. But other business sectors face labor and skills shortages of a similar magnitude.
The Bureau of Labor Statistics offers a list of occupations with the most job growthbetween 2012 and projected out to 2022. Heavy truck drivers are on the list, but the projected shortfall of drivers ranks near the bottom quarter of the list at 11.3%. Sitting above truck drivers on the list are construction workers (24.3%), home health care aides and personal care workers (48%), nurses (24.8%) and software developers (22.8%), for example.
By employment group, projected growth for workers in transportation and material handling occupations is quite close to the bottom compared to other sectors, such as healthcare support occupations (28.1%), computer and mathematical occupations (18%) and construction and extraction jobs (21.4%).
When you look at the training or education required for entry into some of these fields, it's comparable to trucking in many cases. Wages, based on 2012 figures, are comparable in most cases. So, trucking probably wouldn't stand out in the eyes of a young person scanning such a list while planning their career.
You can bet, too, that these other occupations will be competing vigorously for the pool of available workers, with wages, benefits and other perks. Trucking will be competing against some decent-paying, easy-to-enter occupations with considerably more attractive lifestyle options. I think trucking's long-term problems are considerably more dire than the short-term issues.
But short term challenges — the next quarter out to the next year — are not trucking's problem, as in the trucking industry as a whole, but the carriers' problem. How are fleets going to keep a steady supply of people coming to their doors looking for work?
If I were a fleet, I'd be bending over backwards to keep the good drivers I have rather than focusing on hiring a bunch of new and unknown ones. I think this is also where smaller fleets have a tremendous opportunity to level the playing field against their much, much larger competitors.
A story in last week's Financial Post caught my eye. It described discount retailer Costco's approach to retaining and attracting employees. The company pays roughly twice what their competitors do, and in the retail business, that would be expected to drain profits pretty quickly. If that's what you think, you'd be wrong, the story notes.
According to the Financial Post story, the key to success with this approach is employee engagement.
"The measure of how emotionally committed employees are to an organization and its goals can have a direct correlation to that organization’s profitability. As engagement scores go up, typically so does productivity, while turnover and its related costs go down. A 2012 Gallup analysis reported that organizations in the top quartile of employee engagement outperformed bottom-quartile units by 10% in customer ratings, 22% in profitability and 21% in productivity."
Give the story a read and you'll see why I think it's a solution for some fleets, particularly smaller ones where some modicum of human interaction still exists and drivers still have a bit of influence over how the job gets done.
Aside from the mortgage payment, it's what makes you want to get up for work in the morning. Or, in our context, it's what keeps drivers from jumping ship over some minor irritation. The driver shortage, at least as drivers perceive it, means not having to wait too long between jobs. CSA aside, drivers can quit a carrier with impunity, knowing full well the better among them will be working again within a couple of days.
If I were a fleet owner, I would not want so tenuous a relationship with my drivers. Everything a fleet has to offer rides on its drivers, from the relationship with the customer to its Compliance, Safety and Accountability profile. You can no longer afford to have marginal drivers on the payroll, and I'd argue that you can't afford disinterested or disengaged drivers either.
There are a couple of links at the end of this piece that take you to discussions of employee engagement, the hows and whys as well as the costs and benefits. Among them is a link to a Gallup poll published last year that suggests 70% of U.S. workers are “not engaged” or “actively disengaged” at work, meaning they are emotionally disconnected from their workplace and are less likely to be productive. I would guess they'd be less safe as well, but that wasn't really taken into account in the context of the survey.
As for how we encourage engagement, I think pay is a good place to start. As in the Costco example cited above, better pay attracts more applicants from which the employer can pick and choose the most suitable for the job. Once in, the premium pay acts as an incentive to keep the worker in the fold.
Don't think it's possible to pay more for the best drivers? Private fleets do, and their statistics are remarkable — or not so remarkable, if you understand what's behind them. Private fleets often pay up to $20,000 more than for-hire carriers, with better benefit packages and more.
Statistics presented in a recent Transport Topics op-ed piece penned by Gary Petty, president and CEO of the National Private Truck Council, pretty well tell the story. Private fleet hiring standards are similar to for-hire trucking: minimum 23 years of age, experience of two years or more with a safe driving record, “people skills,” and good character, Petty notes. The average age of new hires is growing to now over 38 years of age, while the average driver age, at currently 50 years, is rising. But this one is a bit of a shocker: years of service with the same company averages 14 years. Petty also notes that according to CSA data, private fleets are about three times safer than for-hire fleets.
Dig a little deeper and you find the turnover in private fleets is around 10% compared to data released in October 2014 showing turnover at large truckload carriers is at 103%. It's a mere 94% at truckload fleets with less than $30 million in revenue, says the ATA.
While there remains a huge amount of work to be done to make trucking an attractive career option, few individual fleets can make much of a dent on that front, except to lead by example. Imagine being able to sleep at night knowing that your drivers would quickly rebuff even the most aggressive recruiter by saying simply, "I already have a great job. Nothing you can offer even comes close."
That's why I think smaller fleets are in a good position to start turning this issue around. They are inherently more flexible and closer to their both their customers and their drivers. They may not be able to hit private fleet wage and working condition levels right away, but by being able to pick and choose drivers, and customers for that matter, they are in a position to out-perform and out-personalize the big carriers.
The driver shortage is only an issue if you let it be an issue, and least on the macro level. It's true that as an industry the intake of new talent is less than the outflow, but there's no point in waiting for some higher power to fix that. No regulator in the country can force trucking to become a more popular employer. It won't be until people's fathers and brothers and sisters and aunts who are truck drivers start coming home with decent paychecks and tales of fun and stimulating days at work that the message about a career in trucking is going to change. That's how one fleet can make a difference.