Retaining Drivers Leads to Decreased Insurance Costs
According to the American Trucking Association, in 2017, the driver turnover rate at large truckload carriers surged to one of the highest levels in years. In the fourth quarter, driver turnover hit 95%. Smaller fleets fared slightly better, with an estimated 84% turnover rate. In 2018, with the economy growing and the demand for truck drivers surging, the ATA and other organizations anticipate retention rates to further deteriorate.
You already know that recruiting, hiring, and training new drivers is incredibly expensive. However, did you know that many insurance companies are now using driver retention to calculate your premium? According to underwriters at multiple trucking-focused insurance companies, a driver is 70% more likely to be involved in a claim during their first year of employment—even if they have years behind the wheel. Recently, actuaries have factored retention into their rating system, and some insurance companies will not even consider a fleet with a large percentage of drivers with less than one year with the company. The rate increases associated with high driver turnover can be substantial—we’ve seen it as high as 15-20% in some cases.
So what can you do to improve retention and stay in underwriters’ good graces? The first step to fixing your driver turnover issue is to understand why drivers are leaving—don’t assume it’s due to low pay! An exit interview is a critical tool to learning why your drivers are leaving. After sufficient information is collected from resigning drivers, take a critical look at your pay, benefits, commitment to home time, supervisor and dispatcher attitudes, and most of all, your company’s culture. Discuss issues with your long-term drivers and get their input on how to improve retention. Make it a whole-company effort. And be sure to let your insurance advisor know you’re working to keep drivers!
Not sure how to conduct an exit interview? Click Here for a FREE exit interview template.