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I hear a lot of people talking about driver turnover and how much it impacts their business. Driver turnover is certainly a challenge, but I don't think it's a black and white issue. I don't think that all driver turnover is bad - in fact, I think some driver is a GOOD thing.
If you take all your drivers and plot them on a graph that maps their quality, you'll end up with something resembling a bell curve:
- A big bunch of pretty-good ones in the middle
- A smaller group at the top
- A matching small group at the bottom.
The drivers in that top group are the stars - the 20% of your fleet that makes you 80% of your profits. The big bunch in the middle probably break even for the most part, but the group at the bottom cause you problems. They're the 20% that account for 80% of your headaches, disruption, and unplanned costs.
Good exits
If we consider turnover in the context of that graph, we get a different picture. Drivers in the bottom 20% don't really cause a problem when they quit. In fact, they're probably doing you a favour, since the odds are good that their replacement will be better quality than they are.
Bad exits
Drivers in the top 20% cause HUGE problems when they quit. If a top-20% driver quits, you lose a great source of profit and have a monumental challenge trying to find someone of equal quality as a replacement.
Finding balance
I think we need to consider driver turnover in that context, and plan retention activities accordingly. Do everything in your power to keep those top-20% drivers happy. Do what you can for the big bunch in the middle. For the ones in the middle, either move them up or move them out.
The first step for each of those is developing a clear picture of who's who. We'll look at that next time, but for now think about how much it would HELP you if all your bottom-20% quit.
With the Recruiting & Retention Conference happening in Calgary shortly, I've been thinking about the ongoing challenge of driver retention. Driver turnover in trucking tends to be pretty high and it's a big drain on resources. Turnover is expensive and disruptive. When you've got margins as thin as what we typically see in trucking, you can't have that kind of expense and disruption for very long without seriously impeding business growth. That expense needs to be contained, and there are really two things we can do to contain it - we can reduce the amount of turnover, or we can reduce the 'per exit' cost. We spend a lot of time talking about how we can cut the number of people that quit, but we can get just as far ahead by lowering the cost (and impact) of each exit as well.
I'll be talking more about that at the Calgary R & R show, so if you can sneak away for a day or two, come on out!
I always find it interesting how much attention is paid to trucks in this industry. We certainly need trucks in order to move freight, but it seems like there's a piece missing from the equation most of the time. As much as we need a solid vehicle to move the freight reliably, the truck is really just a tool that allows a driver to perform a service. It's the driver that makes that service happen. If you have a driver and no truck, you can always go rent or lease a truck. However, if you have the truck but don't have the driver (or don't have a GOOD driver), that's a much tougher problem to solve.
Assets and Liabilities
Looking at it from a financial standpoint, trucks are assets that will always depreciate. You can slow that depreciation by taking good care of the truck, but no matter what you do the truck will be worth less tomorrow than it is today. Apologies to my partners that sell trucks, but that's a business reality we can't change. On the other hand, drivers are assets that don't lose value over time. In fact, if you take care of your drivers, they actually get MORE valuable over time. Put another way:
Trucks depreciate...people appreciate
For a lot of you, this is the time to plan and budget for next year, and there's a lot of talk happening right now about what the industry is going to be like in '08. Many are concerned about sluggishness in the US economy, continuing challenges in Ontario, etc. However, the fleets that are doing well, in almost every case, are the ones that continue to invest in their people.
After all, trucks and technology will never give you a competitive advantage - any fleet can have those. What DOES give you competitive advantage is your policies and processes, and the outcomes they create for you. Investing in the people side of the business will ALWAYS pay off handsomely.
Yesterday I posted a note about my presentation from the Council of Driver Trainers Annual Conference and included a link to the presentation itself. Well, it turns out that the link I posted didn't work, since I posted the file in PPT format instead of PDF.
This is what happens when I try to do this stuff myself. :-(
The link has been fixed and the presentation (now in PDF format) is available here.
Feel free to mock me.
I've had a bunch of people ask me for copies of the presentation I delivered at the Council of Driver Trainers Annual Conference last weekend, so I decided to post it in a public location instead of emailing to everyone individually.
For those that missed it, the topic was "Before You Buy - Is Your Company Ready?". The presentation gave an overview of what eLearning really is, why it's worth considering, how to tell if your company is ready to tackle it, and the steps to follow to make sure it's a success. Since the audience was mostly Safety & Compliance staff, much of the content focused on how to 'sell' eLearning to upper management and get approval for it. There were a lot of good questions that came up and we ended up having a good discussion about the topic.
The presentation has been posted in our document downloads area. It's free, but you do have to provide your email address and contact info to get at it. I don't want to make it easy for my competitors to steal all my ideas!
Enjoy!
