CEO and founder of HNI, Mike Natalizio, has developed and improved risk management solutions for transportation companies and organizations since 1985. Natalizio is the founder of The Risk Clarity Formula™, a tool used by HNI to help their customers identify risk susceptibility, create and help implement the solutions to these risks in order for executives to grow their business, expand their wealth, and reach their goals for the future.
MARK G. GARDNER
CEO, Avatar Management Services, Inc.
In this current of passion-evoking topics, a curious result from ATRI’s “Critical Issues in Trucking” annual survey got my attention. In that survey of knowledgeable trucking folks, HOS came up as the year’s No. 1 problem (excuse me, issue) followed second by CSA and then driver shortage.
How could that be? Everyone was talking about how difficult it is to recruit, hire, and retain quality drivers. Bob Costello, ATA Chief Economist, said that 78 percent of large truckload carriers are now hiring drivers with no experience, compared to a trucking industry average of 26 percent.
Of experienced driver applicants, eye-popping percentages were said to be virtually unhireable based on their track record. Expert panels described how people new to trucking were the biggest turnover risk and elucidated the difficulties in keeping them happy. So shouldn’t driver shortage be the No. 1 concern?
What the Driver Shortage Means to Drivers, Freight
Well, upon further review, for managers and owners, it is. ATRI’s survey results included drivers, apparently lots of drivers. As ATRI pointed out, when driver data is pulled out from the survey, the driver shortage is clearly the No. 1 issue. That makes sense. Drivers aren’t worried about a driver shortage. It’s not their problem. In fact it’s to their benefit. The most prevalent driver comments suggested that if there really were a driver shortage, wages, benefits, and other goodies would be increasing as befits any supply and demand circumstance.
Look around, and you'll find no shortage of luxuries, necessities, or frivolous products in stores. (Christmas is coming!) No empty shelves. No long stays in the bread line, waiting for the truck to deliver. Someone is making those deliveries. As Steve Gordon, COO of Gordon Trucking, said in an ATA panel discussion, “Freight’s not sitting at the docks.”
We find that some segments of trucking are experiencing driver shortages and others are not. It’s based on where the carrier runs, what’s being hauled, the length of haul, and the size of the carrier. Competition in some segments can be fierce, and carriers need to make good decisions. That should not begin with throwing large sums of cash into an increasingly impotent recruiting budget. At my firm, we’re very certain about two things: Quality hires and engaging training make a significant difference.
Driver Shortage or Not: Quality Counts
Quality hires should the goal for carriers who are suffering from a lack of drivers and those who are not. It’s not a good idea to roll the dice when it comes to hiring drivers. If you’re having a tough time retaining drivers, more down-and-dirty quick hiring decisions is not the answer. Butts in seats is a quick fix, but it’s expensive and doesn’t last. The focus should be on quality drivers and finding drivers who will be a good fit for your culture. As carriers dip deeper into the pool of minimal experience (including driver school graduates), the hiring decisions get tougher. A lack of job experience means there’s a lack of data on potential new hires.
This makes the selection process all the more important. You need a greater reliance on uncovering and evaluating the intrinsic characteristics, an applicant’s values, motivations, and personality traits. On the other hand, if you’re not suffering from a shortage, it still makes sense to be selective and hire only the best. Either way, it pays for itself to keep the problems out and bring the quality in.
Driver Shortage or Not: Training Pays
Likewise, quality training for newly hired drivers is vital, especially if you’re hiring less-experienced drivers. If a carrier is not experiencing a shortage, then there’s more time for quality training. Either way you win.
According to FMCSA, we’re in an era where the average physical damage claim costs $13,000, average payout per injury is $321,000, and average fatality is now $7 million. Effective and engaging training pays huge dividends, whether it’s used as part of orientation, new-hire programs, monthly safety meetings, or remedial training.