Driver Satisfaction and Retention: A Neverending Problem

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Driver Satisfaction and Retention A
Never-ending Problem?

• John E. Delery, Ph.D.
• Sam M. Walton College of Business
• University of Arkansas

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News from the ATA

• Driver turnover fell from its record high for
  large truckload carriers during the first quarter
  as pay increases improved driver retention,
  American Trucking Associations reported today.
  (Apr. 2004)
• As more and more large carriers try to get out
  of the long-haul market, more small carriers are
  filling the gap, said ATA Chief Economist Bob
  Costello. This is resulting in higher turnover
  rates for the segment of the industry that
  traditionally had a much lower turnover rate.
  (Dec. 2006)

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Turnover Rates

• Large Truckload
• 110-150
• Small Truckload
• 45-100
• Less-than-truckload
• 10-40
• Most of this is voluntary turnover, meaning
  drivers quit

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Why Do Drivers Leave Your Company?(Push)Why Do
Drivers Go To Work For Another Company?(Pull)
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Motor Carrier Effectiveness Projects

• John E. Delery
• Nina Gupta
• Funded by the Mack-Blackwell Transportation
  Study Center
• (Department of Transportation)
• http//www.mackblackwell.org

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Reasons Drivers Mention For Quitting Study 1

• Better driving jobs elsewhere
• Better pay elsewhere
• Problems with supervisors/dispatchers
• Long hours
• Too much time away from home
• Change in careers
• Scheduling Problems

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Reasons Drivers Mention For Quitting Study 2

• Better driving jobs elsewhere
• Better pay elsewhere
• Problems with supervisors/dispatchers
• Long hours
• Change in careers
• Too much time away from home
• Better benefits elsewhere

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Pushes

• Things pushing drivers out
• Job dissatisfaction
• Supervisor/dispatcher interaction
• Undesirable hauls
• Poor equipment
• Justice perceptions
• How drivers are paid
• How decisions are made
• How much voice they have
• These lead to lower commitment to the
  organization

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Job Satisfaction

• The degree to which an employee feels positive or
  negative about his/her job
• It is an attitude
• There are many facets of satisfaction
• The work itself
• Quality of supervision
• Relationships with coworkers
• Promotion opportunities
• Pay

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Satisfaction Indicators

• In general, I like working here
• All in all, I am satisfied with my job
• In general, I dont like my job
• I am very content with the way management handles
  pay
• I am very dissatisfied with my pay

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Related Attitudes

• Organizational Commitment and Identity
• The most important things that happen to me
  involve my job
• I am proud to tell others I am part of this
  organization
• I find that my values and the organizations
  values are very similar
• What happens to this organization is really
  important to me

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Satisfaction is Associated With

• Productivity and Performance
• Organizational Commitment
• Strong feelings for the company and an intention
  to stay
• Organizational Citizen Behaviors
• Behavior above and beyond that expected
• Retention

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Pulls

• Things pulling drivers out
• Higher pay elsewhere
• Better benefits elsewhere
• Promises of getting home more often
• Promises of being treated with respect

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Forces in the Labor Market

• Drivers dont leave for the money
• Drivers leave because we dont treat them well
• Given the opportunities for drivers it does not
  take much of a push for drivers to leave
  Unfolding model of turnover
• Companies have two choices
• Treat drivers very well
• Minimize the impact of high turnover

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Research on Driver Turnover

• Greater dissatisfaction increases the likelihood
  of turnover - quitting
• Voluntary turnover among drivers is influenced
  most by
• Pay and benefits
• How often the driver is home
• Communication with dispatcher
• Use of on-board technology

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Turnover and Driver Productivity

• Turnover has costs
• Recruiting replacements
• Training replacements it takes time to get up
  the learning curve
• Paperwork!
• Higher turnover rates are also associated with
  lower levels of driver productivity
• This effect is reduced at higher levels of
  turnover

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Relationship between Voluntary Turnover and Work
Force Performance
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Pay and Driver Productivity

• Pay can influence driver productivity directly
• The basis for pay decisions appears to be
  extremely important
• Pay rate is a function of many factors (e.g.,
  performance, political behavior, tenure, etc.)
• Performance-based pay can improve productivity
• Politically-based pay can harm productivity

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Pay Systems and Productivity
Performance-based pay dispersion
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Pay Systems and Productivity
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Driver Management Strategies

• Two internal driver management strategies have
  emerged in the industry
• Commitment maximization
• Hire good drivers and get them involved in their
  jobs (pay must be relatively good to get them)
• Driver minimization
• Hire the qualified driver (market commodity) and
  control their every move (focus on logistics and
  dispatcher)

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Conclusion

• Given the shortage of drivers, it will be even
  more important to track satisfaction and
  commitment levels in the future
• Drivers are like everyone else
• They want
• good pay
• good working conditions
• and to be treated with respect
• The management of drivers has important
  implications for carrier performance

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A Note on the Driver Shortage

• The supply of labor is largely a function of pay
  and working conditions
• Supply is also influenced by the population
• Typically only a portion of the population has
  been attracted to driver jobs
• Is the shortage a
• Shortage of good pay and working conditions
• Or a shortage of people in the population?

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Factors Influencing Driver Voluntary Turnover
Rates

• Average pay (-)
• Times on the road (-)
• Percentage of drivers home nightly (-)
• Benefits (-)
• On-board computers ()
• Number of employees ()
• Age of company (-)