Carriers Must Be More Competitive to Stop Turnover

If a truck driver shortage numbering in the tens of thousands were not bad enough, America’s motor carriers are also having a challenging time keeping current drivers on the payroll. Driver turnover was up sharply in the second quarter of 2017 after lower turnover in the previous quarter.

The American Trucking Associations (ATA) says that the majority of second-quarter turnover is not the result of drivers leaving the industry. Rather, it is drivers leaving one company to go work for another. Turnover is a symptom of carriers offering things like signing bonuses and new equipment to encourage the best drivers to join their ranks.

Increased driver turnover should be a wakeup call to motor carriers not willing to be competitive. In every industry, things such as pay and benefits should be commensurate with the number of available workers to fill those jobs. It is true in technology; it is true in medicine; it ought to be true in trucking.

Truckers Earn Every Penny

America’s truck drivers are largely unsung heroes who work hard every day to keep the economy rolling. At C.R. England, a national refrigerated carrier based in Utah, they take great pride in taking care of their drivers by offering competitive pay, late-model equipment, company-sponsored CDL training, and a promise to never slip seat. They recognize that drivers earn every penny they make.

There are other motor carriers on the other end of the spectrum. They are either unwilling to compete or, due to a lack of resources, unable to do so. They are the carriers that are suffering the most as a result of the driver shortage. If they cannot, or will not, compete with better pay and benefits, their drivers are likely to jump ship and go elsewhere.

The ATA report shows that driver turnover is affecting carriers of all sizes. Carriers with annual revenues in excess of $30 million faced a 90% turnover rate during the second quarter, up from 74% during the previous quarter. Smaller carriers with annual revenues of $30 million or less saw a turnover rate of 85%. That was up from 66% the previous quarter.

The only segment of the industry not suffering from excessive turnover is the fleet segment of the less-than-truckload (LTL) sector. Their turnover rate actually fell in the second quarter, down one point to 9%. Local LTL companies not running fleets still saw their turnover rate increase from 12% to 14% in the second quarter.

Pay, Benefits, Working Conditions

Few industries have as high a turnover rate as trucking. Again, most of the turnover is related to drivers leaving one company to go work for another. Still, 90% is excessive. So what is it all about, and how can motor carriers better compete?

Everything starts with pay. At the end of the day, people work because they need money to pay the bills. When all things are equal between numerous employers, drivers are going to go with a company offering the highest pay. It is true in any industry. And because truck driver pay has not kept pace with the economy as a whole, drivers are looking to get every penny they can get.

Benefits are also important. Drivers are willing to jump ship for signing bonuses, generous healthcare benefits, retirement plans, and the like. And, of course, working conditions are important as well. Drivers are looking for the best possible routes along with quality equipment as much home time as possible. These are the things carriers have to work on if they are going to compete for drivers to reduce turnover.