It depends on who you ask, but most folks throughout the industry say it costs $5,000 to hire one professional driver. Other clients say it’s north of $10,000 to replace a driver. What’s with the spread?
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When you’re talking about the cost of hiring a driver, most of the time you’re talking about the cost of driver turnover.
There’s only been one legitimate study conducted on this topic. It dates all the way back to 2001. Upper Great Plains Transportation Institute published a paper called “The Costs of Truckload Driver Turnover.” The study obtained data from 15 companies they interviewed in an effort to understand how much it costs to replace a driver and where the costs lie. They looked at everything: cost of advertising, staff wages, recruitment and orientation costs, training, depreciation of assets, and much more. Their study showed that the average cost of turnover for those 15 companies was $8,234.
In almost any other field, a study from 2001 wouldn’t hold up as a credible source. How can something that’s nearly two decades old still have relevant data? If you look at what people are saying though - between $5,000 and $10,000 for driver turnover - eight grand splits the difference.
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Some of the variance comes down to what the company is hauling. For instance, it takes a lot more time and resources to hire and train someone transporting fuel or hazardous materials than it does to train someone that hauls dry goods. Many companies leave out the cost of a lazy asset sitting against the fence that’s not producing revenue while incurring costs and depreciation.
The more efficient your hiring process, the less it costs you per new hire. A great way to improve your process is with a driver-centric Applicant Tracking System (ATS) like A-Suite. An ATS will help you hire more drivers in less time. You’ll reach more candidates, reduce your time to hire, automate lead source tracking and outreach, and much more.
If you’d like to schedule a free A-Suite demo, contact us today.
Regardless of the specific number, driver turnover is expensive for every trucking company. And it’s a pervasive problem. Industry turnover is about 90% nationwide. It’s clear that your success hinges on your ability to solve turnover. Big picture, there are two approaches you can take.
Focusing on driver retention is an essential step toward solving your turnover problem. Your hiring efforts are futile if every driver you snag walks out the door in a matter of weeks. Long-term strategies are the most effective for improving retention, but you also need to take immediate action. For ideas on how to retain more drivers now and later, check out our ebook “75 Strategies to Help Increase Driver Retention.”
While you tackle your reading assignment, consider investing in leadership training. Our Leadership Development Course is made for frontline leaders in the transportation industry. It consists of more than a dozen online self-directed lessons that will teach your managers and supervisors how to improve driver retention. If you’d like to learn more, contact us today.
Employee referral programs are often the most effective recruiting channels in terms of candidate quality, hire rates, and longevity. If you’re not doing this today, you need to start.
An Employee Referral Program (or ERP) is simple. Here’s how it works:
It’s a straightforward process that improves employee engagement, saves you time, and gets you high-quality hires.
You need to evaluate and measure your current recruiting channels.
It’s highly unlikely that all of your driver recruitment channels are giving you the same results. You need to be tracking a few key metrics to see what’s working:
When you track this key information, you can make informed decisions about where to put your ad spend. You might be surprised that some popular driver recruiting channels aren’t worth the money.
You might be thinking, it’s a lot of work to track all of this. Don’t sweat it. A-Suite can help.
When you implement A-Suite, you can use tracking links and jobs board integrations to automatically track where drivers come from and what’s the spend. You won’t have to waste time crunching numbers. You can skip straight to making impactful decisions.
Maybe your cost of turnover is $5,000 per driver. Maybe it’s $10,000 or more. Regardless, it’s a cost you want to minimize. In the midst of the driver problem, it’s essential to reduce driver turnover. A small investment towards reducing retention and improving your time-to-hire could mean countless dollars saved in the future.
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