Ready for the Upturn

White and blue freight trucks for shipping

Focus on hiring and retention right now, so you’ll be ahead of the pack when the freight – and the driver shortage – comes back.

Carriers are currently consumed by keeping their heads above water in these turbulent economic times, making every effort to get their revenue and income back up to sane levels and to hold on to what little freight volumes they have. Meanwhile, stacks upon stacks of employment applicants are piling up in their recruitment offices. The words “driver shortage” might sound like an abstract concept, ancient history or light years distant.

Yet when the economy picks back up, as economists say it will in the next year or so, a driver shortage is undoubtedly going to hit. In fact, some say the shortage hasn’t really disappeared at all. “The so-called driver shortage has not gone away, it’s just been delayed due to shrinkage of freight,” says Don Jerrell, associate vice president of the Risk Solutions Group at HNI Risk Services, a Wisconsin-based firm offering employee benefits and insurance products to the transportation industry.

The driver situation has been a roller coaster ride over the last 10 years. “For much of the past decade, U.S. carriers have been in a mad dash to hire enough drivers to meet the growing demands of the industry,” saysMark Tinney, president of Jobehaviors, a company that provides online pre-employment assessments for specific jobs in transportation. “With a growing economy and turnover rates reaching all-time highs, many fleet managers came to believe they didn’t have the luxury of holding out for the best drivers,” he says. “If a candidate had a reasonably clean driving record, a CDL, and a pulse – not necessarily in that order – chances are they would be hired. In many cases, fleet managers simply hired drivers who met minimum company requirements and hoped for the best.”

But the times, they are achanging. The current economic situation offers a unique opportunity for carriers to take advantage of the most experienced and sophisticated pool of drivers. Smart companies have been taking a step back, looking at their hiring and retention practices, and making a few important decisions to position themselves for when the recovery starts to show its face. “Don’t get caught sleeping,” Jerrell says.

The question is, are you ready for the upturn?

Experts in the industry say companies that keep up strong recruiting and retention practices during the downturn will emerge as even stronger entities once things shake out.

“To take advantage of the largest pool of drivers available in recent memory, fleets need to establish hiring practices that go beyond the ‘fog the mirror’ method of recent years,” Tinney says.

Jerrell emphasizes that fleets also need to maintain their retention practices, or risk losing valuable drivers when things pick back up and competitors start hiring again.

Matthew Brosious, CEO, a software-based 3PL and a longtime expert on retention, encourages fleets to “stay the course,” and not get off track just because of monetary decreases. Companies have the opportunity now to examine their workforce and set up the fleet that they want, he says. “If not now, I don’t know when they would do it. It’s just time.”

He draws from Charles Darwin’s theory of natural selection to illustrate how things will shake out: it’s going to be the survival of the fittest.

So get yourself in shape.

Recruiting the best

“While the economic downturn has created more turbulence in the industry than a tornado in a trailer park, there are two bright spots for carriers able to weather the storm,” Jobehaviors’ Tinney says. “First, fuel prices have dropped to nearly half the levels of just a few months ago, giving struggling carriers a bit of breathing room. Second, as a result of 1,905 fleets that have failed in the first half of this year, there are a lot of outstanding drivers on the market.

“However, just because a driver has experience doesn’t mean he will be an asset to your fleet. As with any struggling industry, the employees let go first are often those on the low end of the performance scale. An increased number of candidates will not benefit a fleet if they end up hiring their competitor’s problem drivers.”

As competitors go through the process of laying off drivers, it’s not going to be their best performers that are on the market.With such a large pool of candidates to choose from, carriers should be honing their recruiting skills and ramping up these efforts more than ever.

A lot of carriers have been shifting their focus to hiring more experienced drivers, rather than those that meet the minimum requirements.

“You are what you hire,” says Lance Craig, third-generation head of CraigTransportation in Perrysburg, Ohio, which uses both company drivers and owneroperators. “Extensive interviews and reference checks on drivers is an important initial step.” He also believes that referrals from existing drivers give you some of the best applicants.

Tinney says there are plenty of excellent drivers out there looking for work, but it’s a matter of finding them. Traditional hiring methods aren’t going to cut it, he says. Tinney believes carriers need to assess drivers for certain behaviors that lead to success. They should not just be looking at whether a driver is accident-free, but they should dig deeper to find out how a candidate interacts in front of the customer, with dispatch, etc. Hiring needs to be a proactive process, he adds.

“Drivers who are safe, reliable, act as a representative of their company, interact with dispatch in a positive way, are respectful of law enforcement, are mindful of fuel costs and are easy on equipment,” Tinney says.

Jobehaviors offers a long haul truck driver assessment, as well as a delivery driver assessment, to differentiate between those drivers that are focused on pickup and delivery versus those that should have customer service and sales skills as well. Both assessments, which take about 15 minutes to complete, are filled out online by potential candidates, making it easier for fleets to identify top candidates at the outset. The system gives recruiters the tools they need to cream the best, while bringing more transparency to the hiring process. After completing the assessment, the company receives the results instantly via e-mail.

Tinney relates it to playing poker. “You know the hand that your candidates are holding.”

Scheig Associates, Gig Harbor,Wash., offers a very similar system, the Scheig Hiring & Performance System. Another behavioral assessment tool available for carriers is the Professional Dynametrics Program offered by Prelipp andMechler Associates. It works a little differently, creating a model based on those best performers at a company and matching applicants against that.

What some carriers are doing

Whether they’re hiring or not, some carriers are taking steps to position themselves for when the pendulum swings, revamping their recruitment efforts and looking for creative ways to deal with the rise in applications.

Schneider National, which is currently hiring 200 drivers in the Chicagoland area, has never had its driver application volume this high, with thousands of applications coming in each month. According toMike Hinz, vice president of recruiting at Schneider, the company is looking for drivers with six months or more experience. Other qualities Schneider is looking for in drivers include good judgment and communication skills. The company also wants drivers that are ethical, moral, considerate, and safety- and security-conscious.

Through a new partnership with Taleo Corporation, Schneider plans on re-engineering, its career site, in November, to include an application tracking system. The enhanced website will be smarter, faster, more intuitive, and make the application process as easy as possible. (Read more about automated recruiting in the next issue of HDT.)

Ryder, which receives about 12,000 new applicants every month for positions across the company, is also revamping its career page to make it more user-friendly. The site is currently tied to its Applicant Tracking System, an online technology that stores all the data of its job candidates. This system has built up an online database of candidates, searchable by geography and skill set.When the driver shortage comes around, Ryder’s Applicant Tracking System will have a pipeline of qualified candidates to choose from.

“We’re going to be in pretty good shape with candidates in the system,” says Gary Short, senior director of field recruiting at Ryder.

Melton Truck Lines, a flatbed fleet based in Tulsa, Okla., has changed its driver recruiting system to include rankings that measure driver qualifications. The new system also has a section devoted to identifying the candidate’s preferences.

“We have always had very strict requirements for drivers,” says Angie Buchanan, vice president of safety and human resources atMelton. “While driver demand has slowed, we have had the opportunity to talk to many qualified, exceptional drivers and hire only a few who live in prime freight lanes.We are also evaluating driver and driver manager personality profile testing software to better hire and manage our workforce.”

Con-way Truckload says that because of the “operational synergy” it has with sister companies Con-way Freight andMenlo Worldwide Logistics, it has not felt the slowdown as bad as some companies. Nevertheless, with driver turnover rates slowing, Con-way Truckload is finding it “can spend less time on recruiting and more time examining and researching new technologies and software to streamline the driver hiring and on-boarding to improve the company’s recruiting processes,” says Randy Cornell, vice president, safety and driver recruitment, Con-way Truckload. “Retention of our highly qualified drivers is a high priority for Con-way Truckload, no matter the turnover rate or economic landscape.We offer great opportunities for drivers and will continue to explore ways to make the driving job better.”

Clean up your culture

Before the driver shortage rears its ugly head, carriers need to address the issues that keep drivers away from their company. This involves looking within at their corporate structure and culture. Any changes to company culture must be made from the top down, says Duff Swain, president of Trincon Group, a business advisory company to the trucking industry.

In a recent Internet survey conducted by Trincon, many drivers indicated that they are not entirely happy with their jobs, and feel no significant allegiance to their companies. About half of drivers surveyed don’t feel respected, and many feel undervalued. Sixty-five percent said they would remain with their company only until something better comes along. The survey also reported that 30 percent did not make enough to meet their needs, and more than half don’t feel they have a well-defined future in their current jobs.

“The displeasure comes in part from distrust for their employers, a lack of respect and a desire for compensation that factors in experience and accomplishments,” says Bill Kistner, vice president of marketing services at Trincon.

While there are spot efforts to improve hiring quality, Swain says he has not seen any significant change in trucking companies’ cultures. For instance, companies are doing a better job with orientation, spending two to three days with new employees, rather than just a half day. However, in too many cases, this training is still not good quality, he says. “This all boils down to communication.”

Swain calls for companies to foster an environment that will lure drivers to them and keep them wanting to stay. This involves more affirmation and recognition in terms of compensation, tenure and experience. Drivers want to feel like they are valued, and not enough carriers have come to grips with that, he says. “That environment has never really existed in the over-the-road driver ranks.”

The very fact that these workers are not called ‘employees,’ but are referred to as ‘drivers,’ presents a problem with the way they are treated in the workplace, Swain says. By nature, drivers are not treated on the same level as employees. There’s no defined structure for recognition so that drivers can move up in the ranks and gain stature. “There’s not a well-defined career path in the industry,” he says.

Swain urges carriers to take advantage of this opportunity to improve their relationships with drivers, communicate with them and give them that recognition. Taking these simple steps will ultimately keep driver turnover low.

Trincon’s is hardly the first survey to point out that how drivers are treated is one of the main factors in whether they stay with a company, and whether they tell prospective drivers about your operation. In 2005, a study by CostDown Consulting defined the top 10 reasons drivers cited for quitting a company. Although compensation was first, followed by home time and equipment, fourth was respect and honesty, followed by communication and problem resolution, which are closely tied in to the respect issue. Strategic Programs Inc., a Denver-based consulting firm, has found through thousands of truck driver interviews, that although pay and home time are the top reasons, issues with supervisors, scheduling problems, feeling that they’re set up for failure, lack of communications and similar issues are critical for recruiting and retention.

‘Retention is attention’

Keeping up a strong corporate culture goes hand in hand with retention.Making a name for yourself in the industry as an honorable, attractable entity to potential employees is only going to benefit the company in the long run. FreightCenter’s Brosious encourages fleets to protect that culture like you would protect your children.

Schneider has done a pretty good job of protecting its culture, say company officials, by holding onto its core values and principles: safety, integrity and excellence. Its culture and brand is one that is recognized throughout the industry.

Jay Keppen ofWoodstock, Ill., has been a Schneider driver since 2007. “I stayed [with Schneider] because they’ve lived up to all their promises – a rare thing in the trucking industry,” he says. “In fact, I recentlymet a new Schneider bulk driver who drove for other small companies for 20 years.He said he was tired of all the broken promises and inconsistencies of the other companies and wanted to retire with amore stable, dependable company.”

Ryder also stands out for its retention practices.The company tries to focus on improving the quality of life for its drivers, by allowing them to make their own safety decisions, equipping them with the latest technology, adhering to high maintenance standards, and redesigning routes to give drivers more home time when possible. Ryder also offers ongoing training to work with drivers on areas where they need improvement. Communication with drivers is key, to keep drivers in the loop on company policies, procedures and safety guidelines.

HNI Risk Services developed The Driver Score Card, a tool to not only help fleets measure driver performance, but to give drivers an idea of where they’re having roblems before they get frustrated. The score card will monitor drivers for behavior changes, so that fleet managers can find out what’s happening in their life to cause these changes in performance. HNI’s Jerrell says this coaching and communication is key to keeping drivers. “Drivers have a lot of fear out there. They talk amongst themselves.” Brosious puts it simply: “Retention is attention. Don’t give them a reason to be leaving.”

A great future

Greatwide Logistics, a non-assetbased logistics provider based in Texas, is one company that has been shifting its focus toward retention. The company has overhauled its orientation and on-boarding process, which now taps veteran and top-performing owner-operators to conduct a portion of their orientation. These owner-operators also become longterm mentors for these new contractors, according to Rob Newell, vice president of capacity management.

The company has created a formal communication process and feedback program, to help new drivers during their first four months on the job. In addition, Greatwide launched a wellness initiative called ‘Greathealth.’The program was designed to create awareness about driver health and provide the resources and information for drivers to make healthier lifestyle choices.

“Our retention initiatives are also aimed at preparing Greatwide for the inevitable driver shortage the industry will experience when the economy has fully recovered,” says Newell. “Our turnover among our 2,800 owneroperators and 700 company drivers is currently 32 percent. It took a lot of work to reach that milestone, and we intend to remain among the best in the industry regardless of what challenges we face.”