At the end of 2016, the shortage was 36,600 drivers, and by the end of 2017, it had grown to 51,000. By 2024, according to the American Trucking Associations (ATA), the number could rise as high as 174,000.
What these numbers mean for fleet managers is clear -- to stay competitive, retaining and recruiting the most qualified drivers is more important than ever before.
Mastering the Basics = Bottom Line Benefits
Drivers are a fleet’s greatest asset and when they leave, replacing them is not cheap, with the average cost around $12,000 per driver.
Add on other possible costs related to a driver “moving on,” including lost business from too few drivers to tackle business demands and a drop in productivity from low morale among current drivers, and you’re looking at an impact on the bottom line that’s headed in the wrong direction.
While there’s no magic solution to ensure your most qualified drivers will stay on board for a long-term career, there is a weapon you can implement that can be very effective in combating the driver shortage — a driver incentive program.
When thoughtfully planned and executed, a driver incentive program can enhance driver retention and recruitment and the bottom line. It can help create a positive company culture where drivers feel engaged, respected and valued, and highly likely to stay on board longer to work toward fleet goals.
Every fleet is unique, but there are basic steps for building a successful driver incentive program that are applicable to every fleet. Let’s take a look at those.
Lay a Strong Foundation
Just as a strong foundation does more for a house than hold it above ground, a driver incentive program built on a strong foundation can do more than enhance driver retention and recruitment. It can improve driver safety, reduce accidents and improve fuel economy, all of which positively impact the bottom line.
So, when building your program, keep in mind the following factors to get your incentive program off on solid footing:
Choose Metrics and Targets Wisely
Measuring is essential for your program’s success, and the key performance indicators (KPIs) you choose let your drivers know what’s important in order to meet or exceed fleet goals. KPIs can measure a driver’s performance, comparing how it stacks up to their previous performance. KPIs can also provide a performance comparison between different drivers.
Safety and efficiency are typically the top two areas that most fleets track. Driver behavior is the biggest category within safety, and top KPIs include speeding, harsh accelerating/braking, corner handling and crashes. For efficiency, the top KPIs are typically fuel economy per vehicle (including idling time), empty miles and fleet asset utilization.
For KPIs and targets to be effective, they should be actionable and measurable and tied to overall fleet goals. KPIs will differ from fleet to fleet, but the following considerations apply to fleets of all types and sizes:
Reward Success
To keep drivers motivated, the frequency of rewards is important, as is the size of the reward and the type. As you’d probably guess, money is the most popular reward, but non-monetary rewards should also be considered. For example:
All of these are equally important in letting your best drivers know their hard work is appreciated — and, it also motivates those drivers who were not recognized to work harder.
As with KPIs, incentives and rewards should be carefully thought through to be effective and deliver the greatest ROI. To that end: