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The supply chain issues affecting commercial transportation are shining a spotlight on the industry’s labor shortage. There are plenty of businesses using hiring incentives to entice new workers and pending law changes on a federal level would lower the age of big rig drivers. While these solutions may help mend the current labor shortage, in the long term, businesses need to prioritize employee retention and re-examine poor business practices that lead to turnover.
Rejecting the Replaceable Employee Mindset
There is a common conception that commercial transportation drivers in the last-mile space are only in it for a quick buck; an amorphous labor force simply seeking short-term financial gain. The extremely high last-mile delivery turnover rate gives weight to that argument but fails to recognize the poor business practices that often cause this turnover to happen.
Companies with a rotating-employee-door mindset are often trapped in a short-term investments mindset. A hiring process that allows drivers with bad records, a willingness to engage with unsustainable delivery rate agreements that strain drivers, and low employee pay with no substantial benefits all add up to a business model that will never attract a career-minded workforce. In the end, this near-sighted approach threatens the revenue and longevity of transportation businesses.
Build a Viable Career Path, and Business
While most businesses focus on recruitment tactics, reducing turnover by investing in employees and best-practice employee retention methods is a great way to locally address your labor shortage. Good drivers are hard to come by and it is ultimately less expensive to retain good employees than churning a revolving door of new hires. Giving existing drivers real reasons to stay is essential to your business success.
At base, attracting and retaining good drivers comes down to being thoughtful about your business and the needs of those who make it run.
Affordable health care benefits for themselves and their families, paid time off, and additional and voluntary benefits like dental or pet insurance are examples of things that can both appeal to prospective employees and help ensure existing employees stick around. And there’s a great knock-on effect. The more attractive a business is to its employees, the more they will recommend it as a great place to work. This network-effect can make recruiting easier, ensuring a strong reputation and loyalty among future employees, and a stand-out example of excellent company practices. Your business model might also be a problem for recruiting and retaining employees. Rather than a business model solely focused on delivering as many packages as possible, burning out overworked employees in the process, being a leader in a profitable niche could benefit both your workforce and bottom line.
It is less expensive to retain good employees than continue spinning a revolving door of labor. Instead of finding ways to cut corners to save money on “expendable” labor, look for ways to build something with sustainable long-term prospects for both employees and the company itself.
Industry mainstay companies like UPS and FedEx are models to emulate. Their success rests in no small part on a company culture and business approach that seeks to balance financial gain and employee benefit. Creating a workplace and business model that allows careers to flourish, even if it means steering clear of short-term financial benefit, is a proven formula for sustainable success that can limit your exposure to near term risks and failure.
Want to learn more?
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Connect with the Risk Strategies Transportation team at transportation@risk‐strategies.com.
Email me directly at bice@risk‐strategies.com.