100% Driver Turnover Damages the Trucking Sector
According to the recent report, issued by the American Trucking Association, their last periodic research revealed that the annual driver turnover for the trucking and logistic enterprises have reached nearly 100%. This astonishing number was calculated by using the data from long-haul truck drivers’ work history from major truckload carrier and fleet companies. Most of these corporations complain that it takes at least $3000-$5000 to hire and train one driver, and this figure is somewhat less, as compared to other companies that spend even more to retain the driving force.
As such, the high turnover rate cost the industry $3 billion to $5 billion in losses. For an industry that is already suffering from narrow profit margins, it is a damaging blow, which urges the corporations to seek enormous capital for keeping their operations running smoothly. Driver retention is not only disastrous for the fleet and delivery corporations. They have damaging effects on the lives of the employees too. Most of them are unable to accrue any retirement savings because they never stay with the same company long enough. They are forced to live paycheck to paycheck, and face a huge step-down, after retirement, when they have to live on social security.
Driving jobs are a highlighted topic in the trucking industry, one that has plagued and defined the sector for years. But job hopping by the truck drivers interrupts any improvement. Although the companies dedicate substantial resources for recruitment, the situation is getting worse. The only hope for a complete change in this situation is the employee stock ownership plan or ESOP. ESOP is a decades-old concept and was initiated by Paladin Capital Inc., a trucking enterprise with a fleet of over 1000 trucks and an employee turnover rate of less than 15%.
This is what sets the company apart from the rest of the industry, because the drivers who are invested in the future of the company, help the management maintain high standards in performance and delivery, and in decreasing fuel-wasting idle time while giving on-time performance, which allows the enterprise to save up to $1 million each year. Moreover, the company also has an admirable safety and regulatory record.
Bill Prevost, Paladin CEO, said in a statement, “We have a company where everybody has the same last name: shareholder.” However, the implementation of the initiative was not a smooth ride for the company and it faced several difficulties at first. Prevost explained his struggle by saying, “People said I was nuts that truck drivers would never get it. But I knew as soon as their ESOP account balance got to be worth a bass boat or a new pickup truck, we’d have their attention.”
If you want to know more about the ESOP initiative, click here. – See more at: http://truckernews.com/driver-turnover-damages-the-trucking-sector-p630-90.htm#sthash.MtVy8Y30.dpuf