Driver Retention The Nature of the Problem Factors Contributing to the Driver Shortage Potential Solutions to the Problem The Driver Shortage/Turnover Literature Perspectives of Drivers and Dispatchers Feedback Models

Driver Retention The Nature of the Problem Turnover has Been Approximately 100% for the TL Segment of the Trucking Industry Since the Mid-1980s Lost Freight Revenue from Vehicles Sitting Idle The Cost of Driver Replacement is Estimate to be between $5,000 and $12,000 (Probably close to $10,000) Cost to the Industry is in the Billions

Driver Retention Factors Contributing to the Driver Shortage Changing demographics Failure to recruit women and minorities Inadequate pay and poor working conditions (long times away from home) The Motor Vehicle Safety Act of 1986

Driver Retention Potential Solutions to the Problem Actively recruiting Women, Blacks, and Hispanics. Developing closer relations with high schools and vocational schools. Creating internal career ladders for future drivers. Placing more emphasis on scheduling techniques that permit drivers to return to their home towns as frequently as possible. Placing more emphasis on keeping equipment in good condition since this has been found to be an important incentive to drivers. Cooperative driver training programs that provide free training with commitments to drive for specified times after completion of training. Developing proactive driver recruiting policies; i.e., on-going programs with active files on interested and qualified drivers. Increasing Driver Pay

Driver Retention Pre-employment Screening Applications Interviews Written Tests Road Tests Driving Record Background Investigation DOT Physical

Driver Retention Outside Services (i.e., DAC Services, Tulsa, OK) Computerized Access to State MVR Databases 24 to 48 Hour Turnaround Driver Work History More than 2,500 Trucking Companies Driving and Background Checks

Driver Retention Look for People Who See the Job as More than Just Driving Drivers Should Reflect the Image of the Firm Drivers are and Extension of the Sales Force Don't Take Shortcuts to Hiring Never Lower Your Expectations Attempt to Hire People for Life Verify the Information on the Application Document Everything Recommendations

Driver Retention Shortage and Recruitment Target Non-Traditional (LeMay and Taylor 1988) Recruiting Techniques (Southern Rakowski, and Godwin 1989) (Dobie, Rakowski, and Southern, 1998) Driver Characteristics (Beilock and Capelle, 1990) Retaining Drivers Incentives for Performance (Taylor, 1991) Firm Attributes Leading to Retention (LeMay, Taylor, and Turner, 1994) Driver Satisfaction (Richard, LeMay, Taylor, and Turner, 1994); Attitudes Toward Management (Richard, LeMay, Taylor, 1995) Focus on Dispatchers (Keller and Ozment, 1999) The Turnover Literature

Driver Retention Results of Exit Interviews Reasons Drivers Leave Poor Pay Too Much Time Away from Home Other (Approximately 35 %; 20 % related to Dispatcher) Other Reasons Drivers Leave Dispatchers don’t answer messages No praise for doing a good job Lack of communication Dishonest dispatcher No answer from dispatcher in two months Didn’t want to change dispatchers Dissatisfied with performance review

Driver Retention Results of Exit Interviews (Continued) Reasons Drivers Leave (besides pay & time away from home) Wanted a transfer Poor treatment by the company Unfair operations policies Settlement Problems Trouble with night dispatcher Dispatcher incompetent decision maker Unhappy with dispatcher Problems with dispatcher switchboard Unhappy with changes in runs Poor treatment by customers

Driver Retention Results of Focus Groups: Perspectives of Drivers and Dispatchers Group Question: What are the Most Important Things that a Dispatcher Can Do to Help Retain Drivers? Top Five Answers: 1. Routing Home 2. Better Communication 3. Positive and Personable Attitudes 4. Provide Miles 5. Maintain Trustworthiness

Driver Retention Results of Focus Groups: Perspectives of Drivers and Dispatchers Other Issues Drivers Report Little Interest in Using: 1-(800) Hot Lines Comment Cards Suggestion Boxes Open Door Policies Driver Preferences: Quick and Easy Feedback Methods Easily Accessible Communication Tools No Required Writing

Driver Retention Research Question How can a dispatcher increase the productivity of the drivers and keep them satisfied enough to remain with the company? Why is one dispatcher better at this than another?

Driver Retention Exit, Voice and Loyalty (Hirshman, 1970) “When organizations that are largely exit-sensitive encounter voice, it leads to little change in the output of the organization. Voice will either be ignored or institutionalized.” (Matland, 1995)

Driver Retention Exit, Voice and Loyalty Supports the Notion of Employees as Internal Customers Characterizes Alternative Reactions to Dysfunctional Behaviors of Firms Characterizes Alternative Responses of Firms

Driver Retention S-Voice S-Exit Turnover Responsiveness A Model of Dispatcher Sensitivity, Responsiveness, and Driver Turnover

Driver Retention Results Voice is Institutionalized in Many (Most) Trucking Companies Dispatchers Who are Sensitive to Voice and Who Respond to Voice have Significantly Higher Retention Rates than Other Dispatchers Sensitivity to Exit Leads to Few Changes in the Firm

Driver Retention Feedback Models CBF Models - Complaint-Based Feedback Models PBF Models - Period-Based Feedback Models Combined PBF and CBF Models (Periodic Feedback of Complaints)

Driver Retention CBF Models - Complaint-Based Feedback Models Complaining Behavior Immediate Problems Poor Service Hotels Restaurants Police Departments, etc., etc.

Driver Retention PBF Models - Period-Based Feedback Models Quarterly Job Reviews Teacher Evaluations Wal-Mart Shrinkage ATCR – Air Travel Consumer Report Holiday Inn

Driver Retention PBF Models - Period-Based Feedback Models Quarterly Job Reviews Teacher Evaluations Wal-Mart Shrinkage ATCR – Air Travel Consumer Report Holiday Inn

Driver Retention

Table 1: Overall Percentage of Reported Flight Operations Arriving On Time, by Carrier Table 1A: Overall Percentage of Reported Flight Operations Arriving On Time and Carrier Rank, by Month, Quarter, and Data Base to Date Table 2: Number of Reported Flight Arrivals and Percentage Arriving On Time, by Carrier and Airport Table 3: Percentage of All Carriers' Reported Flight Operations Arriving On Time, by Airport and Time of Day Table 4: Percentage of All Carriers' Reported Flight Operations Departing On Time, by Airport and Time of Day Table 5: List of Regularly Scheduled Flights Arriving Late 80% of the Time or More Table 6: Number and Percentage of Regularly Scheduled Flights Arriving Late 70% of the Time or More Table 7: On-Time Arrival and Departure Percentage, by Airport Table 8: Overall Number and Percentage of Flight Cancellations, by Carrier Table 9: Flight Causation Data, By Airline and Category Table 10: Flight Causation Data, Graphic Representation PBF Models - Period-Based Feedback Models ATCR – Air Travel Consumer Report

Driver Retention Mishandled Baggage Explanation Ranking—Month Oversales Explanation Ranking—2ndQtr Ranking—January-June 2008 Consumer Complaints(Feedback to the public periodic) Explanation Complaint Tables 1-5 Summary, Complaint Categories, U.S. Airlines, Incident Date, and Companies Other Than U.S. Airlines Rankings, Table 6 (Month) Complaint Categories PBF Models - Period-Based Feedback Models ATCR – Air Travel Consumer Report

Driver Retention Quarterly Job Reviews Teacher Evaluations Wal-Mart Shrinkage ATCR – Air Travel Consumer Report Holiday Inn PBF Models - Period-Based Feedback Models

Driver Retention ATCR – Air Travel Consumer Report Holiday Inn Drivers Combining PBF and CBF Models (Periodic Feedback of Complaints)

Driver Retention ATCR – Air Travel Consumer Report Holiday Inn Drivers Combining PBF and CBF Models (Periodic Feedback of Complaints)

Driver Retention Driver-Dispatcher Communication Model Area ManagerFleet Manager 1 Fleet Manager 2 Fleet Manager 3 Fleet Manager 4 Fleet Manager 5 Fleet Manager 6 Fleet Manager 7 Etc., Etc., Etc. Driver 1 Driver 2 Driver 3 Driver 4 Driver 5 Driver 6 Driver 7 Etc., Etc., Etc. PBF/CBF Model

Driver Retention Area Manager Driver Fleet Manager Computer Driver-Dispatcher Communication Model PBF/CBF Model

Driver Retention Complaint Area 1 Provides Miles Complaint Area 2Gets Me Home Often Complaint Area 3 Helpful with Problems Complaint Area 4Respectful Complaint Area 5Fair Complaint Area 6Honest Driver-Dispatcher Communication Model PBF/CBF Model

Driver Retention Complaints Fleet Mgr 1Mean Provides Miles 68 Gets Me Home Often 712 Helpful with Problems 615 Respectful 57 Fair 1115 Honest 815 Driver-Dispatcher Communication Model PBF/CBF Model

Driver Retention Complaints Fleet Mgr 2Mean Provides Miles 78 Gets Me Home Often 912 Helpful with Problems 1815 Respectful 45 Fair 1215 Honest 1015 Driver-Dispatcher Communication Model PBF/CBF Model

Driver Retention Complaints Fleet Mgr 3Mean Provides Miles 108 Gets Me Home Often 1712 Helpful with Problems 2015 Respectful 125 Fair 2115 Honest 1715 Driver-Dispatcher Communication Model PBF/CBF Model