Driver iQ: Smaller carriers expect less turnover than larger carriers

Driver iQ’s second quarter recruitment and retention survey found that, on average, carriers expect driver turnover to continue to climb alongside driver pay and sign-on bonuses. When results were broken down by carrier size, however, it became clear that there is a difference between how large and small carriers think about turnover.

Driver iQ provides background screenings and driver monitoring services. This survey was the fourth in a series of surveys the company is conducting to better understand recruiting and retention experiences and expectations, according to the survey report.

Survey respondents were recruitment managers who operate over 75,000 trucks. The majority of the answers came from large carriers with over $100 million in gross operating revenues, but recruiters for mid-size carriers grossing $30-$100 million and small carriers grossing under $30 million were also included.

Large carriers reported expecting turnover to increase in the coming months, while small carriers expect to see a decrease, according to the survey report.

Their expectations seem to be in line with what has been happening across the industry, according to Driver iQ Co-President Lana Batts.

“If you notice, last quarter, there was a 30 percent difference between the turnover rates of the large and small carriers, and if you plot it out, there has been a downward trend for the smaller and a slightly upward trend for the larger,” Batts said. “We haven’t seen that kind of a split since 2015.”

These numbers seem to fly in the face of the common belief that driver turnover is the same for all companies, but things have not always been so varied.

“If you go back and look at ATA statistics over time, what you will see is that there are times when the large and small numbers are almost the same,” Batts said. “So, do four quarters a trend make? I’ve been doing statistics and analysis of this industry for 35 years, and I don’t know.”

While it is not yet clear if this turnover gap is representative of a larger trend, Batts believes drivers are staying with smaller companies more often for two key reasons: home time and the community feel.

“‘Cheers’ was right. Where everybody knows your name is whole lot better than where you’re just a number. That’s cliche, but I think it’s actually true,” Batts said. “Combine that with more home time, since smaller carriers tend to have smaller geographic regions. I think the pay raises are having more impact on the smaller carriers because the guys and gals are getting home more often.”

The majority of small carriers also found that drivers are not retiring as expected, while 65 percent of large carriers found that drivers were retiring as expected. Batts thinks this may be due to the same reasons smaller carriers are experiencing less turnover.

“For retirees in general, the Bureau of Labor Statistics has found that people stay because they love their jobs,” Batts said. “You can then take that to the small carrier and say, ‘You know, I’m getting home when I want get home. I just got a nice increase. They know my name. Maybe I’ll stay.’ I don’t know how you prove that, but my sense is that it’s because they like working for smaller companies.”

Over one-third of fleets surveyed reported 6 to 10 percent of their seats as unfilled, but smaller carriers fared better in this respect as well.

“What’s interesting is that, when you looked at the percentage that are unseated, smaller carriers tend to be doing better at filling their seats than the large carriers, Batts said. “Smaller carriers seem to not be quite as aggressive in adding capacity.”

For the large number of carriers that are facing turnover issues, the solution may be multifaceted. The economy is flourishing and experienced drivers are in high demand, so for the first time in a long time, drivers can quit and know they will have a job tomorrow, according to Batts.

Driver iQ asked why drivers were leaving fleets during its first quarter survey and the results came back crystal clear, according to Batts. Of the 18 options Driver iQ presented, total compensation, time away from home and predictability of paycheck were the most chosen by far.

When asked what the total compensation package would have to look like to slow down the turnover trend, Batts said the majority of recruiters choose $75,000.

“Now, that’s interesting because if you was took what a driver was getting in 1980 and did an inflationary number on that, the number would be $110,000,” she said. “I just don’t think there’s a real expectation of what it’s going to take. Would $75,000 put a dent in it? Oh yes. Would it solve it? No.”

Batts thinks the solution may come once the driver shortage gets bad enough that freight is not being moved.

“Freight has to be left on the dock. I don’t believe that the shortage is extreme enough that freight is not being moved. Once freight is not moved, the shippers will really start increasing their rates and getting drivers off the dock faster,” she said. “If those two things start to happen, then we’re going to start to make a dent, but we’ve got to get the pay up.”

Batts noted that another recession would also do the trick, but “none of us are interested in that.”

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