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Out in the West Texas town of El Paso... Summary and Conclusion
Let's summarize, shall we? Our friend Jorge has increased factory pay levels from an average of $1.05 an hour to $3.75 per hour, had a short lived success with retention and recruiting, and was now right back to where he started. High turnover and low production due to shortage of factory workers. Now his current roster of factory workers were all at the higher pay level. Sound frustrating and all to familiar?
So, after a several months of trying different retention related incentives, along with the higher pay they scraped the new pay plan together. Through a series of exit interviews with plant workers that were leaving at the higher pay level, they discovered why. 80% of those who left weren't going to work at competing maquiladora's. They left and stayed home. They had made enough money in the 4-5 months they worked at the higher rate to take the rest of the year off, with an occasional odd job here and there that paid cash. When they ran out of cash they would return to the company again.
Is this the case with retention in our Industry? Has pay increased to the point where drivers only need to only work 9 months out of the year? If you review your driver files of newer hires and add up the number of months your drivers have actually driven in the past two years, I can almost guarantee that it's somewhere around 18 out of 24 months.
Jorge and his superiors implemented an almost punitive pay scale for this churning bottom 35% of his workers loosely based on a version of Keynesian Economic Policy (John Maynard Keynes was a brilliant 20th Century economist). The end result is that this reduction of pay on the churning bottom of the truck driver roster most trucking companies are burdened with, can be resolved with a complex formula to reduce wage for new drivers, not all new drivers, mind you, but drivers that meet the criteria in the "90 Days to 75% Retention" guidebook and DVD. This is part of one of the "Big 5" solutions and has proven to be successful time and time again.
The Keynesian(KAYN-zee-en) solution to wage and retention(employment) is ideal for our industry. Higher wages equal higher unemployment. It's easy for us to understand because our list of drivers, past, present and future are full of them and will be filled with perfect examples. Take a look, what is your average tenure of a driver who was hired in January 2012? Look at his work history, 2-3 different driving positions in the last year before he started with your company? Although trucking companies are not geographically isolated as the case in the Maquiladora's in Juarez, drivers themselves are limited however, by the very nature of the CDL. The CDL is not obtained easily, and the generally accepted norm for a "stand-alone" driver is two years experience. As a whole, outside of their CDL and an OTR driving position, 90% of drivers are limited to employment similar to minimum wage. In the sense that their employment is limited to in most cases as an OTR driver. Due to Federal regulations with verificiation of prior employment directly from previous employers, MVR's etc., they too are in a restrictive occupation, where their past is very relevant. So the Maquilladora-factory employee example and the Trucking Company - OTR Driver find themselves in a similar restrictive environment. Applying similiar techniques and seeing similar results applies to this discussion. In other words where Maquilladora's competed for employees in a relatively small geographical arena, carriers compete in a restricted environment due to the fact that the number of experienced CDL holders is limited so a similar vacuum exists...
The solution for this section of your drivers is explained in more detail, along with the pay method to apply to your company, in "90 Days to 75% Retention" All drivers are different but they all fit into one of four categories presented in the book. The "Fleeter", The "Driver Pro Tem", "The Yearling" and the "Advocate". Thank you for reading and have a good week-end.
Jorge's tale of struggle and redemption, along with a thorough plan for your company can be found in our new publication and DVD.
Welcome to a Powerful and Productive Method for Driver Retention.
Presenting a step by step plan of attack on the core of every retention issue or potential retention issues within your organization. "90 Days to 75% Retention" effectively shows how to identify the weak areas and how to fix them in a measurable process.
There is a science and formula to successful retention
Presenting a step by step plan of attack on the core of every retention issue or potential retention issues within your organization. "90 Days to 75% Retention" effectively shows how to identify the weak areas and how to fix them in a measurable process.
There is a science and formula to successful retention
There is a solution...
"90 Days to 75% Retention" A Real Plan for Driver and Owner Operator Retention
"90 Days to 75% Retention" A Real Plan for Driver and Owner Operator Retention
$75 BOOK ~ $149 DVD & BOOK SET ~ $195 DVD & 5 BOOK SET
and don't forget... Popular reading for both Brokers and Trucking Companies -
Negotiating with Freight Brokers - Purchase below!
This is also posted on our new Discussion Group on LinkedIN - "90 Days to 75% Retention" Please Join us for further discussion..
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EMAIL - Negotiator@18wheelsofjustice.com
