logging in or signing up Driver Retention, Recession & CSA 2010 costdown Download Post to : URL : Related Presentations : Share Add to Flag Embed Email Send to Blogs and Networks Add to Channel Uploaded from authorPOINT lite Insert YouTube videos in PowerPont slides with aS Desktop Copy embed code: (To copy code, click on the text box) Embed: URL: Thumbnail: WordPress Embed Customize Embed The presentation is successfully added In Your Favorites. Views: 540 Category: Business & Fin.. License: All Rights Reserved Like it (0) Dislike it (0) Added: May 05, 2010 This Presentation is Public Favorites: 0 Presentation Description As a result of the Recession and CSA 2010, fleet operating companies will need to make changes to their Driver Retention Program if they hope to survive during the upcoming Driver Shortage. Comments Posting comment... Premium member Presentation Transcript CostDown Consulting is the Industry Expert in Driver Retention : Copyright CostDown Consulting May 2010 CostDown Consulting is the Industry Expert in Driver Retention CostDown Consulting “ The Effort Ratio between your Retention Program and your Recruiting Program should be 2:1 – put twice the effort into keeping your experienced drivers as you do recruiting new ones “ Free Trucking Industry Training Presentation Discussion Overview : Copyright CostDown Consulting May 2010 Discussion Overview Discussion Points Impact Recession will have on Driver Employment Expectations Impact CSA 2010 will have on Driver Employment Expectations The Upcoming Driver Shortage Driver Retention Solutions: Job, Wage & Benefit Recovery Imperatives Premium Pay for Safety Performance Seniority Based Job & Wage Guarantees The Recession & CSA 2010 will change Driver Employment Expectations Impact the Recession will have on Driver Retention : Copyright CostDown Consulting May 2010 Impact the Recession will have on Driver Retention Drivers were laid off for the first time in years Wage & Benefit reductions were widespread Many Drivers not laid off received less miles 2007, 2008, 2009, 2010 Almost 2 full years of Recession: The Recession was Very Painful for Many Drivers Lower Freight Volumes Lower Rates Truckers in Survival Mode Impact of the Recession on Driver Employment Expectations : Copyright CostDown Consulting May 2010 Impact of the Recession on Driver Employment Expectations Companies that laid off drivers or reduced wages and benefits will be at a big disadvantage when it comes to retaining drivers. Drivers realize there will be another recession. Therefore, they will want to hire on at a company that will keep them working and not reduce their pay. 1 2 Impact of CSA 2010 on Driver Employment Expectations : Copyright CostDown Consulting May 2010 Impact of CSA 2010 on Driver Employment Expectations More effort, integrity & personal responsibility will be required for safety activities: HOS, equipment inspections, cargo securement, etc.. Their livelihood could be in jeopardy if they have or earn a poor violation history They’ll need to audit their PSP record Earning Power and Home Time could change Equipment Shopping, HOS Through carrier and FMCSA supplied training, Drivers will quickly understand that: 4. A clean violation record will be a ticket to be hired anywhere at ever increasing wages Impact of CSA 2010 on the Driver Shortage : Copyright CostDown Consulting May 2010 Impact of CSA 2010 on the Driver Shortage Carriers will discharge drivers with poor safety performance Carriers will avoid hiring drivers with poor safety performance Owner-Operator counts will drop: HOS compliance may not allow enough driving time for required revenue Company drivers with average to poor safety performance history will be reluctant to become O/Os Driver Productivity will drop: Less company drivers & O/Os will be violating HOS regulations THE UNKNOWN How many Drivers will our Industry lose as a result of CSA 2010 ? THE UNKNOWN How many Drivers will our Industry lose as a result of CSA 2010 ? THE UNKNOWN How many Drivers will our Industry lose as a result of CSA 2010 ? CSA 2010 will reduce the amount of Available and Compliant Truck Drivers The Original Driver Shortage: Pre-CSA 2010 : Copyright CostDown Consulting May 2010 The Original Driver Shortage: Pre-CSA 2010 When Global Insight’s Study was released in May of 2005, they calculated that we were currently 20,000 drivers short and that by 2014, the trucking industry would be short 110,000 Drivers. Recession Timeline 2007 2008 2009 The 10-11 Driver Shortage : Copyright CostDown Consulting May 2010 The 10-11 Driver Shortage "As the marketplace expands, even slowly as we are forecasting, there will be a driver shortage," Noel Perry, an analyst with logistics consultancy firm FTR Associates, said at an industry forum this month. Perry sees a driver shortage of about 180,000 in 2010 and 500,000 in 2011 as the recovering economy increases demand and the new regulations crimp the supply. Source: Edmonton Journal April 22, 2010 Driver Shortage will reach 180,000 to 500,000 in the next two years Noel Perry FTR Associates The 10-11 Driver Shortage : Copyright CostDown Consulting May 2010 The 10-11 Driver Shortage On a percentage basis, the Noel Perry forecast suggests a 5.6% – 15.6% Industry loss of truck drivers during the two years following CSA 2010 Implementation The 10-11 Driver Shortage : Copyright CostDown Consulting May 2010 The 10-11 Driver Shortage On a percentage basis, the Noel Perry forecast suggests a 5.6% – 15.6% Industry loss of truck drivers during the two years following CSA 2010 Implementation Driver Retention 101: Why Do Drivers Leave? : Copyright CostDown Consulting May 2010 Driver Retention 101: Why Do Drivers Leave? The Original 10 Influences of Driver Turnover The Original Employment Offering 2006 CostDown Consulting Study of Reasons Drivers Left Their Employers Driver Retention 101: Why Do Drivers Leave? : Copyright CostDown Consulting May 2010 Driver Retention 101: Why Do Drivers Leave? Recession Impact CSA 2010 Impact New Employment Offering Driver Retention 101: Your Program must be constantly Evolving : Copyright CostDown Consulting May 2010 Driver Retention 101: Your Program must be constantly Evolving Driver Retention Meeting Recession CSA 2010 What changes do we need to make to our Driver Retention Program to offset the impact of the Recession and CSA 2010? Current Challenge More Pay for Safety Company at Disadvantage Job & Wage Guarantees The Solutions: Changing our Driver Retention Plan : Copyright CostDown Consulting May 2010 The Solutions: Changing our Driver Retention Plan The Solutions: Changing our Driver Retention Plan : Copyright CostDown Consulting May 2010 The Solutions: Changing our Driver Retention Plan Job, Wage & Benefit Recovery Imperatives : Copyright CostDown Consulting May 2010 Job, Wage & Benefit Recovery Imperatives Fully appreciate that you are at a huge disadvantage in terms of Driver Retention. Restore wages & benefits to pre-recession levels or right-size your driver labor force to the level you can afford. You must immediately begin to rebuild loyalty with all of the affected drivers that you can afford to keep! If you Laid Off Drivers or reduced Wages as a result of the Recession… > The economy is improving > Trucking Companies are hiring again > Driver Demand is on the rise > Turnover could reach record levels > Your unhappy drivers will soon have other employment options > It will be your safest, most experienced drivers that are recruited – What will you have left? Don’t Ignore the: W A R N I N G S I G N S Job, Wage & Benefit Recovery Imperatives : Copyright CostDown Consulting May 2010 Job, Wage & Benefit Recovery Imperatives Job, Wage & Benefit Recovery Imperatives : Copyright CostDown Consulting May 2010 Job, Wage & Benefit Recovery Imperatives If you Laid Off Drivers or reduced Wages as a result of the Recession… Review, Audit & Redesign your Driver Retention Program Look for innovate ways to gain back Driver Loyalty Constantly introduce Driver Beneficial Programs & Communications Make sure your entire organization is aware of the challenge of gaining back the loyalty of your Driver Employees It takes time, effort & a continual flow of work life improvement initiatives to build driver loyalty and improve driver retention The CEO needs to communicate to his/her drivers: That layoffs and wage reductions were necessary to survive Thank them for their patience and sacrifice – remind them that the ‘pain’ was shared Commit to developing a ‘Job and Wage Security Program’ that will provide seniority based Job & Wage protections The Solutions: Changing our Driver Retention Plan : Copyright CostDown Consulting May 2010 The Solutions: Changing our Driver Retention Plan Our Solutions Our Solutions Example: Driver Bonus Program : Copyright CostDown Consulting May 2010 Example: Driver Bonus Program Targeting our Strategy Example: Seniority Based Job & Wage Guarantee Program : Copyright CostDown Consulting May 2010 Example: Seniority Based Job & Wage Guarantee Program Annual Retention Bonus Seniority Based ‘Accelerator’ Annual Safety Bonus Annual Performance Operating Bonus Payout Amount tied to Seniority, Safety & Operating Performance (Productivity) Payments are Vested & Deferred and used to fund Supplemental Layoff Payments Seniority and Safety Performance based ‘No Layoff or Wage Reduction’ Guarantees Example: New Driver Bonus Program Seniority Safety Operating Performance A Driver Bonus Program should encourage the following behavior: Seniority Safety Operating Performance Seniority and Safety Aspects of Plan : Copyright CostDown Consulting May 2010 Seniority and Safety Aspects of Plan Example: Seniority Based Job & Wage Guarantee Program : Copyright CostDown Consulting May 2010 Example: Seniority Based Job & Wage Guarantee Program The Deferred Performance Bonus Plan uses Vesting and Seniority defined Payout Percentages to fund Layoff Payouts Payout Schedule : Copyright CostDown Consulting May 2010 Payout Schedule Box 7 – If a driver leaves our employ, he will be paid only the Vested Balance of his bonus Boxes 10 & 11 – Company pays a Bonus Payout Premium to drivers with 8 or more years seniority Box 14 – Drivers laid off with 0-2 years seniority get a check for 75% of their Ending Balance Box 15 – Drivers laid off with 3-5 years seniority get a check for 100% of their Ending Balance Notes Plan Benefits : Copyright CostDown Consulting May 2010 Plan Benefits Plan Benefits Addresses the Drivers’ Recession & CSA 2010 Issues – Job & Wage Security, More Pay for Safety Performance: Provides Drivers Bonus Incentives for three critical areas: Performance, Safety & Seniority Provides Drivers Seniority & Safety Based Layoff Payouts and Job Protection (Payouts are self-funded by Driver Performance) Benefits by Seniority Presentation Key Points : Copyright CostDown Consulting May 2010 Presentation Key Points Summary As a result of the Recession, Drivers will be looking for No Layoff and No Wage Reduction Guarantees. As a result of CSA 2010, Drivers will expect a safety pay premium to compensate for increased effort, risk & consistent safe performance. Driver Turnover could quickly reach record levels. In 2005, the industry averaged 130% turnover while 20,000 drivers short. Global Insight predicts 110,000 drivers short by 2014. CSA 2010 will significantly accelerate and increase that shortage. Our Plan provided seniority based No Layoff and No Wage Reduction Guarantees plus Supplemental Layoff Payouts to Junior Drivers. Our Plan provided an Annual Safety Bonus plus rewards consecutive years of No Violations with accelerated Performance Payouts and accelerated No Layoff and No Wage Reduction Guarantees. Driver Retention is a process, not a project. You can’t reduce turnover overnight. Trucking companies need to take immediate action to start improving their retention efforts if they hope to have adequate driver resources to remain competitive. Driver Retention – More than One Piece to the Puzzle : Copyright CostDown Consulting May 2010 Driver Retention – More than One Piece to the Puzzle CostDown Consulting is the Industry Expert in Driver Retention : Copyright CostDown Consulting May 2010 CostDown Consulting is the Industry Expert in Driver Retention CostDown Consulting Industry Recognition Contact Information Presented Driver Retention Program at three Annual ATA Conferences Wrote & Presented four Big Truck TV Videos on Driver Retention (can be viewed on our website) Relationship between Retention & Recruiting Driver Managers and Retention Work Life Improvement Committee Auditing the 5 Points of the Recruiting Chain Joe White CEO – CostDown Consulting JoeWhite@CostDownConsulting.com Office: 770-995-6071 Mobile: 404-542-3761 Web: www.CostDownConsulting.com Free Trucking Industry Training Presentation “ The Effort Ratio between your Retention Program and your Recruiting Program should be 2:1 – put twice the effort into keeping your experienced drivers as you do recruiting new ones “ You do not have the permission to view this presentation. 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Driver Retention, Recession & CSA 2010 costdown Download Post to : URL : Related Presentations : Share Add to Flag Embed Email Send to Blogs and Networks Add to Channel Uploaded from authorPOINT lite Insert YouTube videos in PowerPont slides with aS Desktop Copy embed code: (To copy code, click on the text box) Embed: URL: Thumbnail: WordPress Embed Customize Embed The presentation is successfully added In Your Favorites. Views: 540 Category: Business & Fin.. License: All Rights Reserved Like it (0) Dislike it (0) Added: May 05, 2010 This Presentation is Public Favorites: 0 Presentation Description As a result of the Recession and CSA 2010, fleet operating companies will need to make changes to their Driver Retention Program if they hope to survive during the upcoming Driver Shortage. Comments Posting comment... Premium member Presentation Transcript CostDown Consulting is the Industry Expert in Driver Retention : Copyright CostDown Consulting May 2010 CostDown Consulting is the Industry Expert in Driver Retention CostDown Consulting “ The Effort Ratio between your Retention Program and your Recruiting Program should be 2:1 – put twice the effort into keeping your experienced drivers as you do recruiting new ones “ Free Trucking Industry Training Presentation Discussion Overview : Copyright CostDown Consulting May 2010 Discussion Overview Discussion Points Impact Recession will have on Driver Employment Expectations Impact CSA 2010 will have on Driver Employment Expectations The Upcoming Driver Shortage Driver Retention Solutions: Job, Wage & Benefit Recovery Imperatives Premium Pay for Safety Performance Seniority Based Job & Wage Guarantees The Recession & CSA 2010 will change Driver Employment Expectations Impact the Recession will have on Driver Retention : Copyright CostDown Consulting May 2010 Impact the Recession will have on Driver Retention Drivers were laid off for the first time in years Wage & Benefit reductions were widespread Many Drivers not laid off received less miles 2007, 2008, 2009, 2010 Almost 2 full years of Recession: The Recession was Very Painful for Many Drivers Lower Freight Volumes Lower Rates Truckers in Survival Mode Impact of the Recession on Driver Employment Expectations : Copyright CostDown Consulting May 2010 Impact of the Recession on Driver Employment Expectations Companies that laid off drivers or reduced wages and benefits will be at a big disadvantage when it comes to retaining drivers. Drivers realize there will be another recession. Therefore, they will want to hire on at a company that will keep them working and not reduce their pay. 1 2 Impact of CSA 2010 on Driver Employment Expectations : Copyright CostDown Consulting May 2010 Impact of CSA 2010 on Driver Employment Expectations More effort, integrity & personal responsibility will be required for safety activities: HOS, equipment inspections, cargo securement, etc.. Their livelihood could be in jeopardy if they have or earn a poor violation history They’ll need to audit their PSP record Earning Power and Home Time could change Equipment Shopping, HOS Through carrier and FMCSA supplied training, Drivers will quickly understand that: 4. A clean violation record will be a ticket to be hired anywhere at ever increasing wages Impact of CSA 2010 on the Driver Shortage : Copyright CostDown Consulting May 2010 Impact of CSA 2010 on the Driver Shortage Carriers will discharge drivers with poor safety performance Carriers will avoid hiring drivers with poor safety performance Owner-Operator counts will drop: HOS compliance may not allow enough driving time for required revenue Company drivers with average to poor safety performance history will be reluctant to become O/Os Driver Productivity will drop: Less company drivers & O/Os will be violating HOS regulations THE UNKNOWN How many Drivers will our Industry lose as a result of CSA 2010 ? THE UNKNOWN How many Drivers will our Industry lose as a result of CSA 2010 ? THE UNKNOWN How many Drivers will our Industry lose as a result of CSA 2010 ? CSA 2010 will reduce the amount of Available and Compliant Truck Drivers The Original Driver Shortage: Pre-CSA 2010 : Copyright CostDown Consulting May 2010 The Original Driver Shortage: Pre-CSA 2010 When Global Insight’s Study was released in May of 2005, they calculated that we were currently 20,000 drivers short and that by 2014, the trucking industry would be short 110,000 Drivers. Recession Timeline 2007 2008 2009 The 10-11 Driver Shortage : Copyright CostDown Consulting May 2010 The 10-11 Driver Shortage "As the marketplace expands, even slowly as we are forecasting, there will be a driver shortage," Noel Perry, an analyst with logistics consultancy firm FTR Associates, said at an industry forum this month. Perry sees a driver shortage of about 180,000 in 2010 and 500,000 in 2011 as the recovering economy increases demand and the new regulations crimp the supply. Source: Edmonton Journal April 22, 2010 Driver Shortage will reach 180,000 to 500,000 in the next two years Noel Perry FTR Associates The 10-11 Driver Shortage : Copyright CostDown Consulting May 2010 The 10-11 Driver Shortage On a percentage basis, the Noel Perry forecast suggests a 5.6% – 15.6% Industry loss of truck drivers during the two years following CSA 2010 Implementation The 10-11 Driver Shortage : Copyright CostDown Consulting May 2010 The 10-11 Driver Shortage On a percentage basis, the Noel Perry forecast suggests a 5.6% – 15.6% Industry loss of truck drivers during the two years following CSA 2010 Implementation Driver Retention 101: Why Do Drivers Leave? : Copyright CostDown Consulting May 2010 Driver Retention 101: Why Do Drivers Leave? The Original 10 Influences of Driver Turnover The Original Employment Offering 2006 CostDown Consulting Study of Reasons Drivers Left Their Employers Driver Retention 101: Why Do Drivers Leave? : Copyright CostDown Consulting May 2010 Driver Retention 101: Why Do Drivers Leave? Recession Impact CSA 2010 Impact New Employment Offering Driver Retention 101: Your Program must be constantly Evolving : Copyright CostDown Consulting May 2010 Driver Retention 101: Your Program must be constantly Evolving Driver Retention Meeting Recession CSA 2010 What changes do we need to make to our Driver Retention Program to offset the impact of the Recession and CSA 2010? Current Challenge More Pay for Safety Company at Disadvantage Job & Wage Guarantees The Solutions: Changing our Driver Retention Plan : Copyright CostDown Consulting May 2010 The Solutions: Changing our Driver Retention Plan The Solutions: Changing our Driver Retention Plan : Copyright CostDown Consulting May 2010 The Solutions: Changing our Driver Retention Plan Job, Wage & Benefit Recovery Imperatives : Copyright CostDown Consulting May 2010 Job, Wage & Benefit Recovery Imperatives Fully appreciate that you are at a huge disadvantage in terms of Driver Retention. Restore wages & benefits to pre-recession levels or right-size your driver labor force to the level you can afford. You must immediately begin to rebuild loyalty with all of the affected drivers that you can afford to keep! If you Laid Off Drivers or reduced Wages as a result of the Recession… > The economy is improving > Trucking Companies are hiring again > Driver Demand is on the rise > Turnover could reach record levels > Your unhappy drivers will soon have other employment options > It will be your safest, most experienced drivers that are recruited – What will you have left? Don’t Ignore the: W A R N I N G S I G N S Job, Wage & Benefit Recovery Imperatives : Copyright CostDown Consulting May 2010 Job, Wage & Benefit Recovery Imperatives Job, Wage & Benefit Recovery Imperatives : Copyright CostDown Consulting May 2010 Job, Wage & Benefit Recovery Imperatives If you Laid Off Drivers or reduced Wages as a result of the Recession… Review, Audit & Redesign your Driver Retention Program Look for innovate ways to gain back Driver Loyalty Constantly introduce Driver Beneficial Programs & Communications Make sure your entire organization is aware of the challenge of gaining back the loyalty of your Driver Employees It takes time, effort & a continual flow of work life improvement initiatives to build driver loyalty and improve driver retention The CEO needs to communicate to his/her drivers: That layoffs and wage reductions were necessary to survive Thank them for their patience and sacrifice – remind them that the ‘pain’ was shared Commit to developing a ‘Job and Wage Security Program’ that will provide seniority based Job & Wage protections The Solutions: Changing our Driver Retention Plan : Copyright CostDown Consulting May 2010 The Solutions: Changing our Driver Retention Plan Our Solutions Our Solutions Example: Driver Bonus Program : Copyright CostDown Consulting May 2010 Example: Driver Bonus Program Targeting our Strategy Example: Seniority Based Job & Wage Guarantee Program : Copyright CostDown Consulting May 2010 Example: Seniority Based Job & Wage Guarantee Program Annual Retention Bonus Seniority Based ‘Accelerator’ Annual Safety Bonus Annual Performance Operating Bonus Payout Amount tied to Seniority, Safety & Operating Performance (Productivity) Payments are Vested & Deferred and used to fund Supplemental Layoff Payments Seniority and Safety Performance based ‘No Layoff or Wage Reduction’ Guarantees Example: New Driver Bonus Program Seniority Safety Operating Performance A Driver Bonus Program should encourage the following behavior: Seniority Safety Operating Performance Seniority and Safety Aspects of Plan : Copyright CostDown Consulting May 2010 Seniority and Safety Aspects of Plan Example: Seniority Based Job & Wage Guarantee Program : Copyright CostDown Consulting May 2010 Example: Seniority Based Job & Wage Guarantee Program The Deferred Performance Bonus Plan uses Vesting and Seniority defined Payout Percentages to fund Layoff Payouts Payout Schedule : Copyright CostDown Consulting May 2010 Payout Schedule Box 7 – If a driver leaves our employ, he will be paid only the Vested Balance of his bonus Boxes 10 & 11 – Company pays a Bonus Payout Premium to drivers with 8 or more years seniority Box 14 – Drivers laid off with 0-2 years seniority get a check for 75% of their Ending Balance Box 15 – Drivers laid off with 3-5 years seniority get a check for 100% of their Ending Balance Notes Plan Benefits : Copyright CostDown Consulting May 2010 Plan Benefits Plan Benefits Addresses the Drivers’ Recession & CSA 2010 Issues – Job & Wage Security, More Pay for Safety Performance: Provides Drivers Bonus Incentives for three critical areas: Performance, Safety & Seniority Provides Drivers Seniority & Safety Based Layoff Payouts and Job Protection (Payouts are self-funded by Driver Performance) Benefits by Seniority Presentation Key Points : Copyright CostDown Consulting May 2010 Presentation Key Points Summary As a result of the Recession, Drivers will be looking for No Layoff and No Wage Reduction Guarantees. As a result of CSA 2010, Drivers will expect a safety pay premium to compensate for increased effort, risk & consistent safe performance. Driver Turnover could quickly reach record levels. In 2005, the industry averaged 130% turnover while 20,000 drivers short. Global Insight predicts 110,000 drivers short by 2014. CSA 2010 will significantly accelerate and increase that shortage. Our Plan provided seniority based No Layoff and No Wage Reduction Guarantees plus Supplemental Layoff Payouts to Junior Drivers. Our Plan provided an Annual Safety Bonus plus rewards consecutive years of No Violations with accelerated Performance Payouts and accelerated No Layoff and No Wage Reduction Guarantees. Driver Retention is a process, not a project. You can’t reduce turnover overnight. Trucking companies need to take immediate action to start improving their retention efforts if they hope to have adequate driver resources to remain competitive. Driver Retention – More than One Piece to the Puzzle : Copyright CostDown Consulting May 2010 Driver Retention – More than One Piece to the Puzzle CostDown Consulting is the Industry Expert in Driver Retention : Copyright CostDown Consulting May 2010 CostDown Consulting is the Industry Expert in Driver Retention CostDown Consulting Industry Recognition Contact Information Presented Driver Retention Program at three Annual ATA Conferences Wrote & Presented four Big Truck TV Videos on Driver Retention (can be viewed on our website) Relationship between Retention & Recruiting Driver Managers and Retention Work Life Improvement Committee Auditing the 5 Points of the Recruiting Chain Joe White CEO – CostDown Consulting JoeWhite@CostDownConsulting.com Office: 770-995-6071 Mobile: 404-542-3761 Web: www.CostDownConsulting.com Free Trucking Industry Training Presentation “ The Effort Ratio between your Retention Program and your Recruiting Program should be 2:1 – put twice the effort into keeping your experienced drivers as you do recruiting new ones “