The annual “Transportation Spotlight” survey conducted by human resources firm HireRight uncovered a totally unsurprising concern from its poll of some 1,000 trucking executives and managers: recruiting and retaining drivers is one of their major challenges now.
The firm’s 2018 Transportation Spotlight report found that 69% said recruiting qualified candidates remains the top challenge, with 54% noting that retention is a big issue as well. And what do truck drivers cite as the main reasons why they are leaving their current employers? These responses should surprise no one:
- To make more money (52%)
- To spend more time at home (41%)
- For better benefits (27%)
- Because the job was not what they expected (26%)
This is far from an academic exercise, as anyone in the industry should know, because the truck driver population is starting to shrink due to a so-called “retirement wave” as veteran operators begin to age out of this occupation.
Currently, according to data gathered by the American Trucking Associations (ATA), the industry will need about 900,000 new drivers over the next decade or so to cope with this expected wave of retirements. Indeed 49% of those 900,000 will be needed to cover driver retirements alone, with only 28% required to handle ongoing freight growth, per the trade group’s numbers.
The reason for that “retirement spike” is that the average age of a U.S. truck driver now hovers around 50, compared to 42 for the average U.S. worker, noted Bob Costello, ATA’s chief economist, in a recent presentation. He also pointed out that the industry was also short about 51,000 drivers last year, based on freight demand – a shortage that is expected to jump to 174,000 by 2026 if the trend lines don’t change.
“That does not sound like a lot when you compare that to the often-cited 3.1 million truck drive population figure,” he explained. “But when you whittle it down, 1.7 million of them are tractor-trailer drivers and 500,000 of those are in that long-haul irregular route TL segment, which is where most of the shortage is. And being short 51,000 drivers in a population of 500,000 is a bigger deal.”
Dan Murray, vice president of the American Transportation Research Institute (ATRI), added in separate commentary that truck driver age levels are a “sobering issue” as the industry has one of the smallest percentages of younger workers. “And trucking is 5% of the nation’s GDP [gross domestic product],” he added.
Per the ATA’s latest Driver Compensation Study, the median salary for a TL driver working in 2017 a national, irregular route topped $53,000; a $7,000 or 15% increase from ATA’s last survey, which highlighted 2013 pay levels. Meanwhile, median private fleet driver pay jumped to $86,000 from $73,000 over the same four-year span, the trade group noted – a gain of nearly 18% – with median pay for all types of truck drivers combined up 11% compared to ATA’s last study.
HireRight’s survey also touched on some of the broader strategies industry executives are implementing to help alleviate the driver shortage.
Respondents said they plan to invest in developing retention programs (40%) as well as training and development programs (40%) in 2018. Specifically, among companies with more than 2,500 employees, 61% of respondents plan to invest in retention programs, and 58% plan to invest in training and development. That includes efforts to “improve the candidate experience” from application through onboarding (43%). And in a further effort to retain new talent, 38% of respondents said they are introducing new hires to company executives, 32% are implementing longer orientation and training periods, and 28% are appointing driver liaisons or mentors.
Other strategies cited in HireRight’s poll that are aimed at attracting and retaining drivers include:
- Increasing follow-up communication (54%)
- Employing non-monetary tactics such as driver appreciation events (53%)
- Increasing pay (42%)
- Using performance-based bonuses (40%)
It’s worthy to note that sign-on bonuses are back as a recruiting/retention tool and in a huge way at that. According to findings recently released by the National Transportation Institute (NTI), sign-on bonuses are “bigger than ever” even though “no one likes them.”
Per NTI’s analysis, median sign‐on bonuses for dry van drivers are up 280% over Feb. 2017, while refrigerated carriers – who are the “least likely” carriers to deploy sign‐on bonuses, the firm noted – raised their median bonus 300%.
Flatbeds carriers, who were enjoying improved freight rates in 2017 to start with, “walked away with the trophy” in terms of sign-on bonus activity, said Gordon Klemp, NTI’s principal – posting a year‐over‐year median sign‐on bonus increase of 400%.
“Do carriers who use them hire drivers who are most likely to be high turnover candidates in their new fleets? The answer is yes; they do have turnover at a higher rate than fleet averages,” Klemp added. “However, the saying, ‘any port in a storm’ is a truism and storm clouds are apparent in driver recruiting.”
And with freight demand still growing, it’s storm likely to go on for a while.