Moving Words – Turnover
Timothy Brady
“Turnover can be one of the most expensive problems at a company.” Shawn Achor
For years trucking industry pundits have sounded like a scratched, stuck record when it comes to truck driver turnover and the resulting churning of drivers industry-wide. Very few hauling segments and trucking companies have not been impacted by both the shortage and the churn of CDL holders within their company’s fleet. The moving and relocation industry is no different.
According to a 1998 study by the Upper Great Plains Transportation Institute at North Dakota University, Fargo, ND, at trucking companies ranging in size from 32 to 9,463 trucks, the average cost of turnover per driver was $8,234 (a range from $2,243 to $20,729). (Note: those amounts are from 23 years ago.)
In March of 2009, a similar study by the Center for Intermodal Freight Transportation Studies, The University of Memphis, Memphis, and Vanderbilt University, Nashville, Tennessee, found it difficult to ascertain actual turnover costs per driver: “With 24 carriers representing 10,500 drivers, the response rate was a disappointment. The results should not be viewed as representative and no generalizations or conclusions should be assumed. A total of 15 complete and two incomplete surveys were returned by mail; nine completed online surveys were submitted for a total of 24 completed surveys representing over 10,500 drivers.”
The University of Memphis-Vanderbilt report concluded, “The study reviewed alternative strategies that have been recommended and applied over the past 25 years in an attempt to solve turnover and retention problems in the trucking industry. Most of these tactics appear to be obvious and necessary components of any successful business—especially if the techniques are applied uniformly, seriously, and widely. However, there is little evidence of the successful application of any of these strategies in the trucking industry, particularly in terms of producing a lasting and meaningful impact on turnover rates. Knowledge of successful strategies, without their application, suggests the trucking industry can tolerate the condition. As no trucking company has successfully demonstrated that the costs associated with attacking turnover can be offset by profits gained from increased retention, the assumption could be made that the level of turnover and retention is appropriate for the prevailing business climate in the motor carrier industry.”
Even with the dismal response and the years between these two university studies, the fact remains: very little improvement in driver turnover has occurred in the past 20+ years.
In December of 2020, the Journal of Commerce reported, “The number of US truck drivers leaving their companies for other motor carriers is on the rise, and so is driver pay, with truckload carriers rolling out double-digit percentage pay increases this month.”
According to the American Trucking Associations’ Chief Economist Bob Castello, “In the third quarter (2020), the driver turnover rate at large truckload carriers rose to 92 percent. At smaller truckload carriers, those with less than $30 million in annual revenue, truck driver turnover rose 14 points to 74 percent in the third quarter. Ironically, turnover bouncing back is a good sign for the economy and for trucking,”
So what’s the take-away from all this? The industry tends to throw many “quick fixes” at the problem of turnover, but one solution is not enough and turnover is an issue that requires long-term planning.
In my opinion, while it’s an industry-wide problem, it obviously can’t be solved at the industry level. Each motor carrier must develop its own solution to this dilemma. Each carrier has its own specific requirements:
- what it can pay a driver
- the employee/contractor benefits it can afford
- the equipment it can provide
- time home for its drivers
Each moving company must research the best approach that works within the needs of both company and trucker. It’s all about developing your own long-range plan that’s customized for your company’s requirements, then applying that plan “uniformly, seriously, and widely.”
“Managers tend to blame their turnover problems on everything under the sun, while ignoring the crux of the matter: people don’t leave jobs; they leave managers.” Travis Bradberry
