While trends have been improving, large trucking fleets continue to struggle to keep their qualified drivers from leaving. The U.S. annual driver turnover rate has been roughly 90 percent or higher since 2012, according to the Journal of Commerce, which tracks global trade topics.
That’s extremely costly for trucking companies, with estimates in the thousands of dollars to recruit and hire each driver, resulting in an overall toll in the billions of dollars to industry. But switching jobs also is costly to truck drivers. Many of those who pilot semis, tractor-trailers and other big rigs are unable to accumulate retirement savings, often live paycheck-to-paycheck and then take a huge step backward once they are unable to work and have only Social Security to rely upon.
We have discussed in previous blog posts the many elements that could help retain good drivers – better pay, safe driving financial incentives, improved work/life balance and quality of life.
Well, here’s an additional idea: Major carriers could take a page from the playbooks of other industries, including grocery, construction, manufacturing and distribution, and create employee stock ownership plans (ESOPs).
A recent Forbes examines the ESOP set up at Paladin Capital Inc., a 1,000-truck operation based in Nashville, Tennessee, formerly called Quickway Distribution Services Inc. The company’s voluntary driver turnover rate is 20 percent (plus 15 percent initiated by the company in enforcing quality standards). Drivers have helped Paladin reach a near-perfect on-time performance record for retail chain clients and have cut fuel-wasting idle time for a savings of $500,000 to $1 million. The safety record also is admirable.
“We have a company where everybody has the same last name: shareholder,” Bill Prevost, Paladin CEO, was quoted as saying. In just 10 years, some Paladin drivers have amassed ESOP retirement accounts of nearly $200,000, the Forbes column explains.
Giving workers a piece of the business that employs them is surely a powerful incentive toward good work, cost savings and employment longevity. As the U.S. economy continues to improve, big trucking companies may find it even more challenging to retain good drivers. An employee stock ownership plan seems like one smart idea some companies should consider.