In Part One, we talked about the delusion of the industry, the sales job to the “inside the walls” personnel, and a little about apathy. The next step, if you were to follow the process of the TCA Retention Program, would be to establish how we as a company conduct ourselves moving forward. Not only in regard to driver turnover, but in all of our business interactions with customers, suppliers, the communities in which we operate in, the motoring public, government agencies, and the like.
I’m talking about company values but will tread lightly as I’ve noticed that many carriers share their value statement proudly on their corporate website. In many cases the statement was created in a cocoon, meaning it was developed by a well-intended consultant. This possibly could have been at a corporate retreat where the senior management bonded for a weekend and produced a document designed to become a shining beacon for all to follow.
It can be alarming when I’m cautioned to act in accordance to your values rather than my own. Could we consider my core values as well? Ones that were instilled in me by parents, my mentors, my grandparents, teachers, and friends? The goal of a value statement is to turn personal values into shared values and for that, we need a consensus from everyone who chooses to participate in the discussion.
I believe the best way to obtain a consensus is to ask everyone in the business to contribute. If done this way they truly are shared values and I believe have much more power when they are challenged or bumped up against during any given situation. Want to give this a try? Here’s a question to your staff: In a single paragraph, describe the ideal company you would like to work for. Make your description short and to the point. What you’ll find is that we as humans share many of the same values: Honesty, respect, opportunity, accountability, clarity, etc.
When my company went through this exercise, I referred to the value statement as my sword. Each time I used it, I truly believe it had more power because we as a group collaborated on the statement versus verbiage brought in by ownership for all to be guided by.
My friend, Challenger Motor Freight’s Vice President of Human Resources Geoff Topping, put things into perspective while explaining things to new hires. He referred to the vision mission and values statements as The Dream, The Plan, and The Behavior, which is a great way to put a little different paradigm on the subject.
So moving on to launching an internal retention plan. You must first build a platform. When you have high turnover in a company, there is a genuine likelihood that your drivers nor staff believe what management has to say. It’s best if you rally the people inside your walls to all pull in the same direction.
Once you have completed the groundwork, the next step is to thoroughly understand exactly where you are in the marketplace; where you compete to recruit and retain drivers. To some, this might seem obvious but many companies do not get this part right. Ask yourself where is your company in relation to the competition? Does that position match your company’s growth expectations and budget? If your company has a growth expansion plan, you should place your driver and owner operator remuneration in the upper quartile for your geographic area or good luck with ever achieving your goals. Similarly, if you plan focused on increased operating revenue without substantial growth, you might be okay with being at the midpoint or a little higher. You must monitor this essential element of your retention efforts.
Additionally, if you have high turnover, your company is likely being measured entirely by your remuneration package. With that in mind, perception is reality; how things look is important. For example, 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 what had been netted out. It was straightforward, and we were proud of what we had done for our owner operators. 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 in 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 then a 5-cent deduction for those plates. Also, there were the 3 cents for insurance along with a deduction later on for the insurance we paid. There were several items like this with the driver now getting an increased per mile pay rate, followed by the itemized deductions of all these items.
In the end, the new gross line was higher than the competition. They were being paid better all along but the net amount was the same as it was before? It cost us nothing to do, but now the owner operators were satisfied and the complaints ceased. We did not deceive anyone but we did learn that perception is indeed the reality.
Are you curious if your company’s retention efforts are as effective as you hope they are? Complete this brief survey – no strings attached. Stay tuned for Tackling Driver Turnover Part 3: Why is safety critical to driver recruitment and retention?