Pay them and they will come
June 26, 2019
Some industry stakeholders claim there is a “driver shortage.” Many, including the Owner-Operator Independent Drivers Association, see the reality as a driver retention problem. Either way, there is certainly a driver employment problem. It likely comes down to pay.
This employment issue is glaring in a recent report released by Fusion Recruiting Labs. Titled “Truck Recruitment Report: The Modern State of Hiring in Trucking,” the report surveyed fleet owners and transportation leaders to identify challenges in recruiting drivers, including an exodus of veteran drivers and the proliferation of mobile devices, social media and globalization.
Although more than two-thirds of participants reported an increased need to hire in the past year, more than half said they had met their hiring target in the last year. Only a quarter of respondents were below their hiring targets.
If this “driver shortage” is as dire as many want us to believe, than why are only 25% (according to this survey) of carriers not hitting their hiring target? Also, two-thirds said “their need to hire has increased in the past year.” This can mean a number of things, including a high turnover rate, thereby feeding that need to hire.
Recruiters claim there are three major challenges when looking for new drivers:
- Unqualified candidates.
- Lack of applications.
- Passive candidates, i.e., they received information of candidates who did not directly apply for the role.
The problem with this first “major challenge” is that it is extremely vague. What made so many candidates unqualified to the point it has become a major problem for recruiting?
Drug test results? Failure to pass medical exams? Unwillingness to work certain times? Felon?
As you can see, what exactly disqualifies a driver is the disease. Simply disqualifying a candidate is the symptom. If it’s a failure to pass a medical exam, do we consider the possibility the exams are too restrictive? If millennials tend not to work certain hours or days, do carriers consider reevaluating that model?
In many of these scenarios, there is no shortage of drivers. Rather, there’s an unwillingness for carriers to budge on policies. Which brings me to…
Lack of applicants
There is one obvious reason why so many carriers are not getting enough applications turned in: wages. That’s not just my opinion, but also the conclusion derived from a U.S. Bureau of Labor Statistics study.
“As a whole, the market for truck drivers appears to work as well as any other blue-collar labor market, and, while it tends to be ‘tight,’ it imposes no constraints on entry into (or exit from) the occupation,” the report states. “There is thus no reason to think that, given sufficient time, driver supply should fail to respond to price signals in the standard way.”
Worth noting: results of the survey seem to be more accurate for medium-sized fleets of 50-249 trucks, according to the report. A recent U.S. Census Bureau report found that owner-operators and small fleets (fewer than 50 employees), dominate the industry, accounting for more than half.
That’s noteworthy because of another report that came out recently. Seek Business Capital’s Best and Worst States for Truck Drivers list mentions OOIDA’s claim that large carriers do not pay competitive salaries, stating that smaller trucking companies tend to pay more. The TruckDriversSalary.com list of companies with highest average salaries is dominated by smaller carriers, the report points out.
One possible interpretation here is that the reason why these medium-fleet recruiters are not seeing a lot of applicants is because candidates are flocking to the smaller fleets where the paychecks are bigger.
Smaller fleets are soaking up all the qualified candidates because of the pay. Therefore, the only applicants left for the bigger guys are the unqualified candidates or no candidates at all. Hence, the recruiting problem highlighted in Fusion’s report.
Pay them and they will come.