Tackling Driver Turnover Part 2 – The Platform

In part one, we discussed the industry's delusion, the sales job to inside-the-wall personnel and apathy. The next step is to establish how we as a company will conduct ourselves moving forward, regarding driver turnover and in all our business interactions with customers, suppliers, the communities we operate in, the motoring public, government agencies, and others.

Of course, I’m talking about company values. I am treading softly here because I see many companies proudly expressing their company values on their websites, and they look and read great. The issue that can come into play is that the statement was created in a cocoon in many cases. What I mean by that is that it is quite likely that the statement was developed with the assistance of a well-intended consultant, possibly at a corporate retreat where the senior management team bonds for a weekend and produces a document designed to become a shining beacon for all to follow.

The potential problem is that when you tell me how to act according to your values rather than my own, I immediately question your intentions. What about my core values? Do they mean nothing to you? My core values were instilled in me by my parents, my mentors, my grandparents' teachers’ friends, etcetera. The goal should be to turn personal values into shared values. For that, we need a consensus where everyone who participates in the exercise to develop the statement is strongly encouraged.

The best way to gain consensus on a value statement would be to ask everyone in the business, including your driver’s owner-operators and LPs, to contribute to the effort. If done this way, they genuinely are shared values and, I believe, have much more power when challenged or bumped up against them during any given situation. So here is the challenge for your people: in a single paragraph, please describe the ideal company you would like to work for; please make your description short and concise. The nice thing about this is that we, as humans, share many of the same values. We want honesty, respect, opportunity, accountability, clarity, etc.

When my company went through this exercise, I called the value statement my sword; I used it on many occasions, and I genuinely believe it had more power because I could say that we as a group decided on the statement rather than talking about the statement as an outside element brought in by ownership for all to be guided by.

What you have started to do here is build the platform, and I call it; when you have high turnover in a company, there is a genuine likelihood that your drivers don’t believe too much of what management has to say. Before you put your retention plan in place, you must build a solid foundation to launch it. It would be best to get the people inside your walls all pulling in the same direction. Paramount to success moving forward is that the senior management team must live and breathe the common core values that were established. The whole thing can go sideways if anyone acts in a contradictory way, it is leadership by example, and no exceptions!

Once you have the groundwork done, the next step is to thoroughly understand precisely where you are in the marketplace where you compete in recruiting and retaining drivers. To some, this might seem obvious, but believe me, many companies do not get this part right. Here is the question: Where are you to the competition, and does that position match your company’s growth expectations and budget, as well as your strategy, if you will? If your company has a growth expansion plan, you should place your driver and O/O remuneration in the upper quartile for your geographic area, or good luck with ever achieving your goals. Similarly, if you plan to focus on increased operating revenue without substantial growth, you might be okay with being at the midpoint or a little higher. If you aren’t monitoring this essential element of your retention efforts, get clarity as quickly as possible.

If you have high turnover, your company is likely being measured entirely by your remuneration package by your drivers and O/Os, which is a sad truth but a real one. With that in mind, perception is reality, and how things look is essential. In my own experience, at one time, we simplified the owner-operator pay so that we paid our contractors a net amount after all the items we added and then deducted from their pay had been netted out. It was straightforward, and we were proud of what we had done for our O/O’s. However, after a while, we started getting complaints that the competition was paying a higher rate. Sure, they had deductions, too, but they were apparently getting a higher top line than our owner-operators – or so they believed. After explanations failed to calm the situation, we changed our payment system to add the details of all the items we paid on behalf of owner-operators and then showed the corresponding deductions. For instance, we showed a 5-cent per mile item for license plates and a 5-cent deduction for those plates. Also, there were the 3 cents for insurance and a deduction later for the insurance coverage we paid. There were several items like this, with the driver now getting a grossed-up per mile pay rate, followed by the itemized deductions of all these items.

The new gross line ended up higher than the competition (they were being paid better all along), but the net amount was the same as before? It cost us nothing to do, but now the owner-operators were satisfied, and complaints stopped. We did not deceive anyone; we were true to our Values Statement and told everyone what we were doing. Lesson learned: Perception is reality. That is important to remember when looking at various pay packages and techniques.

In my next post, we’ll discuss why safety is an essential core value and the anchor of a successful driver retention strategy.

Take good care.

Safe Trucking

Rjh