Greg Mechler is this month’s guest columnist. Greg is an expert in the development of transportation leaders. Greg is the President of Human Advantage, Inc. He has consulted in the trucking industry for over 30 years. He is especially focused on the selection of talent and development of people in the industry.
You can learn more about Greg and his company here.
HAVE YOU SOLVED THE DRIVER RETENTION PROBLEM YET??
A report published in 2015 from market research firm Gallup finds there’s still plenty of truth in that old cliché – “people leave managers not companies”. The survey of 7,200 adults found that about half had left a job at some point “to get away from their manager”.
Perhaps you have already tried many approaches to reducing driver turnover, from incentives, benefits and perks, to the many solutions from OEM’s, technology vendors, seat makers, and more, all claiming if you only install or use their product, drivers will be attracted to your company and stay longer.
Yet companies in the truckload industry struggle to retain drivers year after year and turnover rates continue to hover around 100% or more.
You may have tried a lot of highly touted solutions but have you tried significantly upgrading the driver management position?
The Gallup study suggests that the person who manages the driver is a major variable in the retention/turnover challenge. There are many other studies that reflect the same result – people leave managers, not companies. Is this true for your company??
THE DRIVER MANAGER
For the purpose of this article we will use the title “Driver Manager” (DM) to refer to any position directly responsible for day-to-day operational performance.
You may have different titles depending on your size, your service segment (van, flat, tank, local, dedicated, and more) and your operations department structure. Some titles we have seen are fleet manager, driver manager, driver coordinator, driver supervisor, dispatcher – the list is endless.
The DM is the person responsible for the day-to-day dispatch, coordination, and performance of the driver workforce?”
This is the person drivers perceive as their boss. This is the person that can positively influence drivers to stay or conversely, cause them to go elsewhere.
In this article and future articles we will explore ways to strengthen this important position in your company.
ROLE CLARITY, ACCOUNTABILITY, LEADERSHIP
The title does not really matter but role clarity, accountability, and leadership does. Whether it is formalized or not this front line leadership role is influencing driver performance for better or worse.
If the DM does not have role clarity, accountability, and leadership capability, he or she cannot do their job properly.
Usually the DM has an assigned fleet of drivers with responsibility for optimizing the performance of the fleet. In our view they are really running a profit center.
Each truck and driver enhances profitability or detracts from it. Even though the DM is able to have substantial impact on performance, in our experience many carriers choose to treat this role as a low level, almost clerical role, rather than the leadership position that it is.
These companies fail to hire top caliber leaders, keep the compensation low, do not hold people accountable for results, and they do not train and develop people for greater responsibility. As a result the DM is not able build strong productive relationships with drivers and they are not able to influence performance outcomes.
Our contention is that a strong DM must have both accountability and authority for managing a fleet of drivers.
The DM should be accountable for the overall performance of the fleet (usually 30 to 40 trucks and drivers), especially in terms of fleet profitability (operating margin), productivity (miles/truck/week), and driver turnover rate and retention %.
To be an effective performer, the DM must manage key result factors such as preventable turnover rate, miles/truck/week; revenue/truck/week; DOT compliance; on-time %; and more.
In order to do this and have real accountability, DMs must have sufficient authority to make decisions related to driver performance such as load selection, discipline, and goal setting. Then they are able to build real working relationships with their drivers and have a positive influence on retention.
When there is real accountability for fleet performance including driver retention, results improve and make a direct positive impact on profitability and growth.
Effective DMs directly impact the financial performance of the company. Therefore it is necessary to fully understand and appreciate the role and what it takes to develop a successful DM. In our research on the DM role we have found 5 groups of competencies and 6 leadership dimensions that must be utilized to achieve success.
- Basic skills and knowledge – business acumen, industry knowledge, computer skills, etc.
- Daily work flow – load tracking, load assignment, problem response, etc.
- Administrative and organizational – keeping records and information current
- Relationship development – communication, empathy, advocacy, etc.
- Leadership and management – setting goals, coaching, recognition, performance management, etc.
- Perspective – the way of viewing the business, relationships, and results
- Preparation – doing the work necessary to make good decisions and get results
- Way with People – being the kind of person who others can respect and relate with
- Courage to be decisive – uses sound judgment to make effective decisions
- Teamwork and team play – working with others to accomplish extraordinary results
- Results with excellence – achieving lasting results not just short term solutions
There are specific steps carriers can take to create and staff this essential leadership role. When done well this process creates a pool of leadership talent that is ready to go when needed as the organization grows. The steps include:
- Making a commitment to an upgraded DM role
- Clearly defining the role, responsibilities and accountability
- Hiring the right people who can perform well in this role
- Developing and training the right people with a development process that starts at the time of hire and continues throughout the career life cycle
The payoff – increasingly excellent business results, lower driver turnover and better driver performance, and the creation of a deep pool of leadership talent that can handle new opportunities in the future.
In future articles we will outline the essential competencies and leadership disciplines in more detail along with recommendations for implementing this strategy.