Did you catch our recent webinar, “Driver Outlook & Wage Trends You NEED To Pay Attention To!”? We received more questions than we had time to answer in the allotted time frame, so our presenter, NTI’s COO Leah Shaver, has answered them below in this Q&A-style blog post. If you weren’t able to join the live webinar, don’t worry – you can watch it on-demand anytime!
Question: Are drivers thinking that it’s still 2018? Are drivers their own worst enemy when they are looking for jobs? Are they “stepping over dollars to pick up pennies”?
Answer: Some of the churn experienced in Q1 and Q2 could be attributed to drivers chasing results similar to 2018. If a driver moves frequently, one could certainly argue the inefficient strategy.
On the other hand, if you speak with an experienced driver or an owner-operator they’ll tell you quickly how high productivity ranks in their expectations of the company. The fleets we monitor with lowest turnover results hold Operations accountable for driver productivity and allow drivers to stay focused first on safety, trip planning, fuel efficiency and staying engaged with the company.
Question: How does “Predictive Hiring”, or utilizing a Behavioral Assessment designed specifically for truck drivers, fit into the scheme of a driver shortage?
Answer: We are aware of some fleets utilizing a behavioral assessment as part of their qualification process. It does negatively impact the quantity of drivers they hire, while also positively impacting the quality outcomes, including performance and retention.
Not every fleet can or will afford to completely shift their hiring strategy to these practices. It’s worth mentioning that suggestive delivery of this type of solution might be better served on a platter with a carrot, rather than to the knee with a stick.
Question: Do you have a contact for us to connect with those who have access to minorities, such as a placement agency?
Answer: Since we don’t want to discriminate by focusing on one group or another, I’d instead recommend that you do an internal audit to benchmark your current population, diversity inclusion strategy and efficacy, and reflection in both your internal and external marketing campaigns. Reflect what you admire, and you will attract what you reflect.
Question: What effect does the WOTC (Work Opportunity Tax Credit) Program have on a carrier’s driver recruiting program?
Answer: Utilizing WOTC crosses my desk often as it pertains to new entrants (student drivers), especially women; other than that, I don’t see a trending effect per se on the total recruiting effort. Perhaps this is a fine idea to further explore and share. I look forward to seeing that detail!
Question: This seems to be geared toward private fleets – specifically.
Answer: We monitor driver wage changes, benchmarks, programs and strategies at For-Hire trucking companies, both public and private, as well as at Private Fleets. It is fundamental to your success to be aware of what occurs at each, and to benchmark your position so that you can strategize adequately to attract and retain a qualified workforce. The good news is that we do all the benchmarking work for you!
Question: St. Paul Park is a saturated market to recruit Class A CDL drivers. We have a referral program, competitive pay, and great benefits. What else can we do?
Answer: Indeed, you are domiciled in a very competitive market. Private Fleets like yours also compete for some of the highest qualified drivers in the United States. Driver job requirements at Energy Companies and Food Service Distribution companies also have some of the highest compensation packages and earnings outcomes and still struggle to recruit and retain.
A National Private Fleet Survey, delivered by location and job type is reported as one crucial step you could consider in your strategy. Our team of Private Fleet analysts and experts compare your driver job descriptions, locations and wage outcomes to like drivers, doing the same jobs employed by companies similar to yours. We also do a quick audit of your programs and report back opportunities where you can make adjustments.
I’ll also acknowledge, that pay and practices are surely not 100% of the solution. You have to get in front of your desired audience first, in order for them to express greater interest in your company and then understand and be attracted to your total package. Audit your marketing approach, which you can ask us to touch on during your National Private Fleet Survey.
Question: What are your thoughts on actual numbers on OWNER-OPERATORS vs Company drivers? Does this data align? I would think it’s more difficult – especially related to retention. The guys who have their own equipment are getting more and more difficult to find.
Answer: A lot of Owner-Ops (ICs) call in when I’m on Road Dog Live on SiriusXM Road Dog Trucking Radio and each time, they share that if leased on with a motor carrier (MC), they expect the MC to deliver on all points of their agreement. They are intolerant to low rates or productivity and the impact to their bottom line, just as you would be for your company trucks.
If ICs are harder to find, I assume that is because the mega fleets with mega budgets that are serious about offering ICs enticing packages to sign on, are also serious about getting in front of them.
You have to get in front of your desired audience in order for them to gain interest, or eventually join your company. MCs that are 100% or even majority reliant on ICs have told me they have been adding additional ICs to their fleet this year without difficulty.
Question: Are you seeing any carrier pay retractions due to the current market conditions? Anyone pulling back pay?
Answer: Reducing or eliminating sign-on bonuses was the first reported and then implemented change. We have seen fleets reduce starting pay for new drivers but no one has reported reducing pay for existing drivers. Certainly productivity was impacted in the second half of the year and that will inherently stall driver income, despite increases to mileage rates last year.
Question: How prevalent is per diem in pay now that the tax laws have changed? I’m struggling to decide if it’s a good idea or not.
Answer: Per Diem is very important to drivers – we get calls about this every time I’m live on SiriusXM Road Dog Trucking Radio – and prevalent in professional driver wage packages. We recommend keeping it optional until you’ve had the opportunity to educate your employees on the benefits and the outcomes they will experience.
The National Survey of Driver Wages includes data on per diem based on fleet size and average LOH so that you can make an informed decision.
Question: I would love to hire EVERY veteran. I can never “verify” their experience in order to qualify them as an OO. My thought is that if you can drive a tank, you can drive anything!
I absolutely LOVE your commitment to our veterans! Verifying driving experience can be a challenge with any candidate, particularly if we’re reviewing unfamiliar or non-traditional documents to do so. Beyond examining the DD214, I’d check in with my friends at Fastport to see if they have guidance for you or if they can help expand your program. There are also MCs that really stand out with hiring veterans and networking is invaluable for Recruiting Managers. Reach out to folks in your network to ask about their best practices, post the question on LinkedIn, and monitor the chatter on social after this blog is shared. I hope to see our community fill in the blanks I’m leaving for them!
Question: We are cutting off sign-on bonuses due to an abundance of available drivers and owner-operators applying in our system. While that is a good problem to have in some cases, it reflects our current market being weak, in our opinion.
Answer: We’re not big fans of sign-on bonuses, but we understand why many fleets use them. In fact, there are many that feel obligated to use them for fear that eliminating the sign-on will make them look less attractive.
Decisions to move driver income at For-Hire fleets are based on Driver Turnover, Driver Supply, Freight Rates and Demand for Capacity. Indeed, the market in 2019 is weaker than that of late 2017-2018.
Add to that, capacity has exceeded demand in many (not all) markets and we’ve had a slump in exports and inventory build in the US. This impacts productivity, which inherently increases driver churn, which saturates the market with more applicants for you to review. Several fleets have lowered or eliminated sign-on bonuses in many markets due to meeting hiring goals.
Any time you can reduce costs and still meet goals is a win!
Question: If I had a bucket of funds to allot for driver pay, Do you think I’d be better to apply it to base pay, or should I look at things like Sirius, parking, truck washes, etc…?
Answer: I hate answering a question with a question, but this one is loaded! Have we evaluated your competitive indicator to make sure that not only the mileage rates you offer are where you want them to be, and that the annual outcome for your driver earnings are above market?
If you already pay well, your drivers are productive, safe, and experiencing a strong work/life balance, then investing in assets that increase their comfort and pride in the company makes sense. Since I also work for SiriusXM, I’d love to see you implement their affordable program and offer access to your fleet! #shamelessplug
I also like to fight fire with fire and believe your solution lies within your fleet response. What are the most common complaints or turnover triggers? You survey each week and can ask your drivers – everyone wants to be heard, especially our mobile workforce that we don’t get to see every day. What is most desired by them? Survey this question and let them decide – majority wins.
Question: Are you seeing any pressure on rate increases because freight is not moving well enough for shippers?
Answer: Between our MC and Shipper customers, no one has mentioned that freight is not moving well. Shippers have definitely put pressure on MCs, even related to contract freight rates, during the second half of 2019. The argument shared with me is that with less demand for capacity, and more drivers in the market, there is a reasonable argument to reduce or, in most cases, maintain rates.
That said, our most successful fleets put heavy effort into dedicating capacity in 2018, and in most of those cases, they can continue to couple our data with their service offerings and make a strong case to maintain or increase rates, subject to specific markets. Though capacity has exceeded demand in many markets, that is not the case for all. Ask any MC recruiter or sales rep about many cities in Indiana, and you’ll get a lot of feedback about unique areas where it is “not easy” to meet demand.
Jobs with high qualification requirements, a high labor (touch) component, team positions, Hazmat, and growing roles of entering homes to deliver groceries or high profile items like appliances or furniture continue to warrant frequent examination of wages.
Note from Leah: Thanks to my friends @DriverReach for helping you stay up to date on CDL trucking trends! Be sure to check out the DriverReach blog or follow them on LinkedIn for other relevant articles and head over to their webinars page for an up-to-date list of upcoming events and on-demand recordings. You can also check out their modern Recruiting Management System in action by requesting a demo!