Fact: the past year has seen the lowest unemployment rates in a decade.
Employers in every industry are struggling to attract and retain talent, but the transportation industry may have one of the hardest pitches in the labor market. It wasn’t too long ago that trucking jobs in particular were seen as a great way to make a respectable income, but with the current state of the workforce, candidates have more power than ever – and they aren’t choosing to get into trucking.
To bring the best candidates to your company, you need to give them a reason choose you, not just your industry. One way to do that is pumping up your benefit offerings.
The Retention Problem
Let’s quickly examine the talent attraction and retention problem we’re facing as an industry. Recently, the American Transportation Research Institute reported that “driver shortage” and “driver retention” were the top two issues for trucking – out of 10.
First, driver shortage. American Trucking Association’s Chief Economist Bob Costello estimates that the industry is short at least 50,000 drivers, and, as older members of the industry start to retire, that number will continue to increase.
There is currently a push to lower the age at which an interstate driver may obtain a CDL from 21 to 18 so that talent can be recruited sooner, but it’s too soon to tell if that change is going to take place, or if it would have an effect on the industry as a whole.
The shortage of drivers makes it difficult for leading trucking companies to remain efficient and maintain their place in the market, and it also places a strain on current drivers who are often overworked and undercompensated.
Which bring us to retention. Once you have managed to attract great talent (through company culture, your benefits package, etc.), you want to keep those valued employees around. Turnover in the trucking industry is extremely high, particularly among larger fleets. In the U.S., turnover can hover near 100% within the first year of employment. That’s no small fact. The average cost to replace a truck driver is about $12,000, and that’s if you’re able to find talent and train them quickly.
So, why are employees leaving trucking companies?
First of all, it’s easy. Many drivers find that they can obtain new employment with a new trucking company the same day they quit a prior trucking company. Transportation is unlike almost any other industry in this respect.
Part of the churn can be attributed to the industry’s take on benefits as a whole. With the labor market leaning heavily in favor of job applicants, a hefty benefits package is no longer an option, it’s a necessity.
Here’s the breakdown: 75% of drivers between the ages of 18-35 plan to leave the industry because of a lack of pension, benefits, and low wages. Another 36% plan on leaving because of the environment of the industry. Health and wellness issues, high stress, unsatisfactory work conditions are contributing causes of turnover.
Positioning Your Benefits Package to Attract and Retain Talent
Creating an appropriate benefits package that addresses the specific needs of drivers is the key to talent attraction and retention in this industry. It doesn’t have to be difficult. It doesn’t have to be complicated. I’m here to help you get it right.
A benefits package that will appeal to transportation industry workers:
- Meets or improves upon current industry benchmarks
- Offers attractive compensation packages that include retirement savings plans, bonuses, vacation time, and/or gym memberships
- Includes worksite benefits like Accident and Critical Illness
Meeting or improving upon current industry benchmarks
Insurance agencies have different ways for determining industry benchmarks. At M3, our book of business is large enough that we have the ability to benchmark internally, providing our clients with accurate, relevant information to reference when creating their own employee benefits strategy.
Benchmarks that you should monitor against are:
- Average deductible
- Out-of-pocket costs
Offering attractive compensation packages
The transportation industry hasn’t been as quick to implement novel compensation packages as other industries, so now is the time to get on board if you want to make an appeal for talent retention.
Attractive compensation packages for trucking employees include retirement savings plans, bonuses, more PTO, and even gym memberships.
Health and wellness has become a concern for workers within this industry (see the stat above on turnover in transportation), and it should be a concern for employers as well. The more health issues that your employees experience, the higher premiums that you’ll pay as an employer. It’s in your best interest, and your employees’, to offer a benefit like a gym membership or implement a wellness program in your organization in order to keep your employees healthy and your costs down.
Including worksite benefits like Accident and Critical Illness
Worksite benefits give employees the opportunity to voluntarily opt in for more coverages in the areas that they personally need the most. Benefits like Accident give employees peace of mind that they would be covered if they were in an accident, while Critical Illness provides a proactive safety net for employees who may deal with a health event like a heart attack, cancer, or a stroke.
- Talent attraction and retention is a major issue for nearly every industry, but transportation may be hit the hardest.
- You don’t know what you don’t know – use industry benchmarks to determine if and how you need to adjust your employee benefits package to make it more competitive.
- To attract the best candidates to your company, it’s imperative that you offer a competitive benefits package that includes initiatives like retirement savings plans, wellness programs, and worksite benefits.
Contact a member of M3’s Transportation practice group to learn more about restructuring your employee benefits package to increase talent attraction and retention.