Sleight of Hand

An underlying theme of the retention project plan is looking for, but not finding bad guys, because going down this path is a waste of spirit. There is no one I know of that goes to work and tries to fail. There are though, a large volume of people that trucking companies set up to fail, starting with their new drivers and, along with others, their margin generators, the dispatchers.

By truck count, trucking companies are by and large approximately 90% privately held. The barriers to entry into the business are minimal and that lends itself to many situations wherein a driver, sensing the opportunities available, starts with one truck and grows the business from there. That was not my situation but not far off. My father left me three trucks when he unexpectedly passed. I tell you this because it might not differ from many stories out there. There are mostly two scenarios: folks who were pushed into the industry, or they took a leap of faith and just went for it. I did a little of both.

For someone to get from one, two, or three trucks to a trucking company takes drive and it takes hard work, and it takes trust in oneself. It is no place for the weak at heart. When you look at this situation, what you won’t see is any start-up entrepreneurs that have HR prerequisites. You don’t see communication training, conflict resolution etc. And at one to three trucks, why would you? It is when things take off that it gets problematic. When you own a handful of trucks and suddenly, the market you serve decides they want more from you, you start to grow. It isn’t easy to juggle all of the moving parts that you need to pull it off.

Most of these challenges are outside the walls. The finance community wants you, the bankers, the new customers, the OEM’s, fuel companies and all the suppliers. It goes on and on. A new entrepreneur has to make competent decisions regarding all of these necessities, or they may never make it. So, what comes last? Well, not in all cases, but in many, it is the relationships inside the business because you don’t notice them slipping away. It was for me, that’s for sure. We went from not measuring turnover to when we did measure turnover and it was at 120%. Congratulations, your fleet size is now 200 trucks but you’re burning through 240 people a year. I believe the above scenario has a lot to do with the historically high turnover numbers in our industry.

There are only two ways of countering this issue from the company’s perspective. One: hire more drivers faster and for a while, many companies were very good at this countermeasure. That was until an interruption in the supply of new drivers was slowed down by a few factors, including Covid & driver testing facilities not issuing new drivers licenses. Also, a lot of older drivers decided this would be an excellent time to slow down or retire.

Two: take a good hard look in the mirror and ask yourself how you transition this company you have built into one that people want to come to work for and stay at, rather than flee as soon as they get a chance. This second option is much more complicated and by the way, no supplier can do this for you. If you are looking for a method of reducing turnover by outsourcing it to another company, you will never get it under control. It’s not going to happen. You did everything required to get what you got, so own it or stop whining. If you own it, you can change it; if you don’t, you won’t.

The cost of turnover permeates throughout the whole company and it hides in various spots in every department. So much so that you must have your eyes open for it because it is easy to miss. In talking to one of my clients last week, where I sit as a member of their driver retention steering committee, the following scenario came up;

This company dropped their turnover last year by 50%; they do an excellent job of measuring the effects of turnover, creating standard operating procedures and policies, and training of their people. All with the intention of dropping their turnover by another 50% this year and I have every belief that they will do it.

They have nine dispatchers, and we were looking at average revenue per truck by dispatcher. A cursory look at the numbers put two of the nine dispatchers clearly ahead of the others. But when you drill down a little, you can see that one of these dispatchers has a turnover number that is far higher than the average of the rest of the boards. So, when these dollars were factored in and taken to a net number after $6K per hire was deducted, the real winners for margin were neither of the top two gross revenue per tractor folks.

This is important for more than a couple of reasons, not the least of which is that much like the new trucking company owner, the dispatchers were taught that money comes before the people. As much as we could debate this, the two are symbiotic in that without customers and revenue, you have no company and of course, without drivers, you have no customers. If you had a dispatcher that churned through customers, how long would they be working for you? Conversely, if you have a dispatcher that churns through drivers, what is the difference?

I tend to look at all turnover as a failure with a learning opportunity. Either we should do a better job in the screening process, or we didn’t set the individual up for success while at our company. At our company, a review of the turnover related to retirements and health-related challenges amounted to just over 2% of our turnover. This was the total amount of turnover that was out of our control. To me, that says that our absolute opportunity is 97% retention or 3% turnover.

Driver turnover is a business challenge for many in our industry, but like many other challenges, leaders can rise to the challenge. We overcome recessions, pandemics, sub-prime mortgage disasters and on and on. Driver turnover is in this kind of company when it comes to overcoming challenges. What is your company doing about option one or two?

Safe trucking,

Ray J. Haight
Co-founder
tcaingauge.com