For those in the trucking industry, it is no secret that one of the biggest challenges is the increasing shortage of drivers. The America Trucking Associations recently estimated the shortage is currently between 35,000 and 40,000 drivers – a number that is expected to rise due to economic growth and increasing retirement in the workforce. In addition to the driver shortage, the turnover rate has been as high as 95 percent during the last three years.
The driver shortage is impacting trucking companies across America with reduced capacity and lowered productivity. As it costs more to hire drivers and freight delays become more common, the industry must find ways to cope.
It’s important to recognize that there is a problem, but is it also imperative that trucking companies understand the root cause of the shortage and take steps to find solutions. Here are three factors influencing the driver shortage and three tips to help address it:
Factor #1 – Work-Life Balance
As the average employee age climbs to 49 years old, trucking companies see the need to replace their retiring drivers. The industry as a whole, however, is struggling to attract younger drivers due to problems maintaining a work-life balance. Millennials, for example, often are looking for job opportunities that allow more time to develop their personal lives outside of work, and they don’t necessarily see life on the road as a route to accomplishing their goals.
Factor #2 – Lack of Gender Diversity
A lack of gender diversity is another issue that has limited the trucking industry’s ability to recruit. The industry historically has been geared towards, and dominated by, male employees. The ATA reported that women comprise 46 percent of the American workforce, but only 6 percent of the trucking industry. By ignoring almost half of the labor pool, trucking companies have helped contribute to the shortage.
Factor #3 – Pay Rates and Benefits
After deregulation of the trucking industry in the 1970s and a rise in owner operators, pay rates and benefits for drivers have plummeted, making the Industry increasingly unattractive for new drivers. Drivers often work unpaid as they complete paperwork and wait for cargo to be loaded because compensation is usually based on drive time. They can spend many hours performing necessary tasks for which they are not compensated.
Finding solutions to recruiting problems is essential to the ongoing health of the industry. Companies need to begin to plan and take action on how they will attract and retain quality employees in the coming years of the employee drought.
Tip #1 – Rethink Work Schedules
Providing the younger generation of employees with flexible schedules to allow for time at home will help balance work-life issues. Companies, for example, could provide longer stretches at home for employees, as well as more opportunities for local routes during the periods employees spend home.
Tip #2 – Develop a Female-Friendly Environment
The industry has an opportunity to shift talent recruitment to an untapped sector. Companies should begin to create an environment welcoming to female drivers, while proactively guiding women into the industry. A push is already being made in the industry to design trucks better tailored for female use. As companies begin to upgrade their fleets, female-friendly trucks should be part of the plan.
Tip #3 – Increase Compensation to Stay Competitive
Another step companies will be forced to take involves wage increases. The Industry has already begun to increase wages to compensate for the difficulties of life on the road, and companies will have to adapt to stay competitive. Companies should consider providing sign-on bonuses, health benefits and license fees upfront. Another way companies can maintain an edge is through providing adequate training for employees, which can lead to an overall increase in success.
As the economy continues to prosper, the Trucking and Logistics Industry will experience a rise in business, as well as increased costs, largely due to wages. Competitive companies will begin to address driver shortages now, so they can tackle other issues headed their way. We expect government regulations, such as the required electronic logging devices that will become effective in 2017, to contribute to the labor issues in the future. Stay tuned for the next HORNE blog about the impact of new government regulations, and be sure to contact us with your questions.
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