The "Telematics" of Retention
Break the cycle! - Take a New Approach to turnover.
Tired of constantly hiring drivers to out-run turnover?
Fleets are spending staggering amounts of money and time to recruit and hire drivers. Unfortunately, because of high turnover rates, hiring more drivers to out-run losses leads to nothing more than spending more money. Net gains are minimal at best. Ultimately, we (fleets) spend enormous dollars with little to no gain. Retaining a higher percentage of those hires is crucial to growth and cost control.
Despite ever-increasing costs, we have little impact on turnover rates. Instead, we hire more drivers to fill the need and spend more money to do so. Outcome: higher staffing costs and continued turnover (not to mention lost productivity, background vetting, orientation, travel, etc.).
In the recent months we have seen sign-on bonuses rise to as high as $20K and we are seeing bonuses regularly offered between $10 and $15K (and up to $20k sometimes!). However, most of the fleets pursuing this approach haven’t seen a reduction in their turnover. Outcome: higher bonus costs, continued turnover. Net gain: more spend, near zero growth.
Advertising costs continue to increase and we hear recruiting leaders continue to point to an “increased cost per lead” or “costs per click”. Still, we don’t see increased hiring percentages rising above the rate of turnover. Outcome: higher advertising costs, continued turnover. Net gain: near zero growth.
Driver wages have skyrocketed! A recent Freigthwaves article cited carrier pay increases of up to 33% while a CNN article cites increases of up to 50%. With several headwinds facing carriers, many include increased costs in wages and benefits.While the wages increase, the turnover remains mostly flat. Net gain: more costs, near zero growth.
Administrative staffing costs are also continuing to rise if we can fill the positions at all. With total compensation packages well above $80K, and continuing to rise, we are spending an increasing amount to staff these positions.
Turnover doesn't come from just one place. It's important to understand where turnover comes from inside our organization.
First year losses continue to represent the largest number of total losses. Most fleets experience their highest turnover by far within the first year. There may be several reasons for this but all of them are exacerbated by a lack of engagement, pride in the company, and ineffective communication. It's easy to point to “compensation” as the primary factor, but what caused them to look in the first place?
Turnover rates in the first 90 days alone are likely in excess of 60%. Let that sink in: 2 of every 3 hires leave within the first 90 days. 60% of your costs are lost within the first 90 days.
Involuntary turnover stemming from performance concerns such as safety, service, or productivity also account for a significant percentage of turnover. But with the risk of higher verdicts and the higher costs of poor performance, this is often “healthy turnover”, right?
You are likely to spend the money to go out and hire the very same risk that you just terminated. So, then, what can be done to improve the behavior and reduce the risk with the current driver? A lot.
The most painful loss is that of a seasoned, veteran driver. They know your processes, they know your customers, and they know your expectations. However, they became disenchanted with something along the way and fleets are often too slow to react. Fleets assess the reason they leave and vow to improve that process. Then it happens again...and we repeat the cycle..If we can understand why they left, after the fact, then we should take timely action to address the specific issue before they leave in the first place.
We have to treat this portion of our team differently than the newer members of our team. Their issues, and needs, are different. The right approach requires a different approach with a seasoned driver than with new members of your team.
Break the cycle! - Take a new approach
Without changing our approach and taking new innovative action, we will continue to repeat this cycle. We will continue to spend enormous dollars to recruit, hire, and train drivers, and we will continue to watch them leave at the same rates that we bring them in. Outcome: more spend to hire. Net gain. Near zero growth.
Proactive Measures - Onboarding
The “Telematics” of Retention
We reduce rear-end collisions by increasing following distance. We measure this through hard-brakes, sudden stops, and forward collision alerts. Our first layer of measure is the behavior captured in our telematics. Reducing the frequency of this behavior reduces rear-end collisions.
Certainly, the first step to focusing on the right data is to develop visibility to the leading indicators. Once you have visibility to your risk indicators, you have assigned engagement plans to focus on reducing the risk, you must have visibility to the success of the intervention / engagement. In other words, are your teams delivering the message that was crafted and agreed upon? Incorporation of technology here will give that visibility.
The “Telematics of Retention” - Are your teams delivering your message consistently? Create visibility to execution BEFORE it becomes the lagging indicator we call “turnover”.
Incorporating technology to measure the delivery of our message and engagement of the driver will reduce turnover.
Have a Plan!
Creating a plan includes identifying who needs to play an active role. The short answer is, “everybody”. But it has to be coordinated, aligned, and purposeful. The plan needs to support your corporate culture, it has to include multiple mediums of communication, and it has to be delivered at time-relevant intervals. As an example, the time to ensure your driver understands their compensation should coincide with their first paycheck.
Being proactive and engaging your driver before there is a problem turns this potentially negative event into a consistently positive event and demonstrates that you care. In some cases, you may even consider including a spouse at home in this contact point, depending on who manages the family budget.
Engage Your Team in Executing the Plan
Traditionally, in many companies, On-Boarding consists of attending orientation, completing paperwork, watching some videos, and taking a skills assessment. After that it’s a hand off to their new manager where they are unceremoniously entered into the daily workflow cycle. Stop this! - On-Boarding and Retention is a team effort!
There should be a well-designed and customized delivery of your organization’s message, expectations, and support network. The new team member should recognize the value of joining their new team and all that it has to offer. Everyone from your front-line managers to your HR team, your benefits coordinator, operational leadership, Safety, Executive team, and beyond plays a part in a successful on-boarding program. This is close to a year long process with a heavy focus in the first 30-90 days. This is how you will engage your new driver and ensure a shared understanding of expectations. This engagement will reduce turnover. As a matter of fact: it is the single most important key to reducing turnover. Propper on-boarding is the foundation of your corporate culture.
Train Your Team and Provide the Tools
Training your front line is hard. Really hard. I had a boss early in my career (Jim Digby) that described it to me as a “water balloon”. Once you start to support one end, the water moves and the other end falls. Consistent support is the only way to control the balloon. - His message was, “Consistent support and training is critical to success and it has to be delivered to the entirety of the organization.” It was true then and it remains true today. You may know the message inside and out but you can’t always be there to deliver the message yourself.
However, you can deliver the tools needed, at the right times, with the right support to deliver a consistent message that is aligned throughout your organization. These are the building blocks of your corporate culture. Using an automated workflow will allow this to happen consistently and timely.
Develop the Team You Have
Involuntary turnover stems from one of three primary sources/root causes. Cause one, you selected the wrong candidate. Cause two, the employee didn’t buy in to the expectations of the organization. Cause three, the message regarding the corporate expectations wasn’t clear. In all three cases, these are preventable losses. In today’s world of technology, we have a good idea of the person that we are hiring. In fact, we likely already know where our areas of concern are and they are usually accurate. But we on-board everyone the same. Instead, from day one, we need to place an increased focus on the area of concern and collectively work with the employee to improve it. Tailored on-boarding plans are easily defined with the proper tools.
Once an employee is working and we identify an area of concern, fleets take various courses of action. However, we usually do this after habits have developed and we oftentimes ask our front-line manager to follow up more or focus more in “this area”. And they do… for a few days.
We ultimately lose the driver and management: they show up on a loss report, we review the events or cause, and then get frustrated that we didn’t do more to prevent loss (save the driver). We vow to be better the next time, then go and repeat the process with the next loss. Or they get listed as a “Safety Termination”, and we are thankful that we avoided the next crash, injury, or penalty.
Instead of this cycle, focus on reducing the behaviors that are known to result in bad outcomes. These outcomes may be related to safety, customer service, equipment care, or lack of productivity (income). Remember: retention is a team event! Focused engagement plans need to be well crafted, specific, measurable, aligned, and supported from multiple people within the organization. There also needs to be an escalation process and strong documentation. Finally, you have to have a measurement of success and a clear picture of what it looks like. This is the continual reinforcement and development of your corporate culture.
Measure for Success
We all understand the concept of capturing data to develop measures - everything from fuel consumption to fault codes, HOS violations to CSA violations, distracted driving to average following distances, and so much more. If there is one thing that the industry has gotten good at, it’s capturing data. However, understanding what data to focus on is crucial and, frequently, more difficult.
Focus on the Right Data
Every fleet measures turnover. Many investigate the cause and measure by specific cause, tenure, location, and much more. Fleets also do this with crashes and injuries. However, in the case of crashes, we also measure behaviors that demonstrate risk. We then target methods to reduce those behaviors - Leading indicators versus lagging indicators. We have to develop the same approach to reducing turnover. Most importantly, once we have identified leading indicators, we must have well-crafted strategies to consistently address the issue and reduce the frequency of the unwanted behaviors.
Define Success - Delivery and Engagement
We have to measure our success. But how do we define success? In our current state, most carriers wait for turnover to occur, measure that turnover, and if we have reduced it, we have reached a level of success. However, if we focus on reducing the behaviors that lead to turnover, our success will be much greater, much more scalable, and most importantly; much more sustainable.
Success is the measure of delivery and engagement that results in the reduction of turnover. The first layer of “measure” is the delivery and engagement of your team. The second layer is the measure of turnover.
Replicating Best Practices
Once you have identified a successful approach to addressing an issue, or a manager that has been repeatedly successful, how can you replicate the approach with the rest of your team? With well-defined engagement plans, delivering the coaching tools, and monitoring delivery / engagement, you can replicate very easily, very quickly, and very consistently.
Inspect what you Expect
There are a lot of fires to put out every day and our focus often gets drawn to the one that is burning the brightest. When we do, we take our eyes off of the other issues just long enough for them to flare up again.
Implementing a process that allows you easy access and visibility to your team’s performance allows you to maintain a high level view of performance while fighting other fires. When you see a cause for concern, being able to quickly drill in on the specific issue, or leader, helps to provide the consistency you need. Automating this process lets you sustain and scale it.
Break the Cycle! - Technology Enablement
The Pivotal Retention System is the only solution specifically focused on providing a proactive workflow solution for your front-line teams to reduce turnover. Aligning your message, allowing you to scale best practices across your organization, and deliver it consistently. Every time.
The Pivotal Retention System provides purposeful touchpoints to your managers on a predetermined schedule. These touch points include the general purpose of the contact, the key talking points, and job aids to facilitate the exchange. Once completed, the data insights gained allow the leadership team immediate visibility to timely communications, driver engagement and response, as well as measuring the communication quality of the exchange. Pivotal Retention provides your staff with the tools they need to reduce turnover and gives leadership the visibility to real results - before they become another statistic.
If you’d like to experience the Pivotal Solution, schedule a discussion here.
Phone: (630) 310-6724