Five Hidden Costs of Driver Attrition

Five Hidden Costs of Driver Attrition

June 18, 2024

News

Five Hidden Costs of Driver Attrition

The trucking industry often dismisses driver turnover as just part of doing business. With some carriers still facing an annual turnover rate of 80%, it’s easy to see why it’s grudgingly accepted.

Despite the known costs of replacing a driver, many fleets seem content to eat the price and carry on. What few stop to consider, however, are the hidden costs of driver attrition.

These costs aren’t easily traceable. It’s difficult to put a dollar amount on them. But they exist and they can have a definite impact on your bottom line. Worse, these hidden costs have a far-reaching impact across your company. They effect the workloads, budgets and maintenance costs of every department. And when you take a sobering look at them, they make the cost of driver attrition much worse than first thought.

Here are five hidden costs of driver attrition:

Damaged goods and damaged equipment. This is a pretty trucking-specific problem, and it’s often linked to inexperienced drivers. I don’t just mean rookie drivers: these can be drivers who haven’t hauled your types of loads before, or who are new to the weather-related challenges of your routes. All that lack of experience can lead to damaged product, damaged trailers, or worse.

Why is this relevant to driver attrition numbers? Fleets with high turnover rates typically end up with less-experienced drivers. With few veteran drivers around them to share their knowledge (more on that in a moment) the likelihood of rookie mistakes skyrockets. Not only can those mistakes be expensive, they’re harmful to your reputation as well.

Your fleet can end up in a vicious cycle of poor drivers, rookie mistakes…and departing clients.

Lost productivity. Whenever a driver leaves, other drivers have to pick up the slack. This often leads to late loads, longer detention times, and forced dispatches. Which no one wants.

It’s not just your drivers, either. HR staff lose productivity because they’re dealing with employment termination files. Accounting loses productivity because they’re busy closing employee payment files. And so on and so on. Employee burnout is inevitable: a survey of burnt-out employees had 41% blaming staff shortages. All of which is going to hurt your bottom line and your profit margin.

If your profits aren’t where you thought they’d be, it’s time to consider how much productivity is being lost due to driver attrition.

Knowledge loss. In the mad scramble to cover for a lost driver, more than productivity gets lost.

High turnover also causes lost “team knowledge”. That is, information that isn’t found in any official documents but is often essential to productivity. In the case of drivers: things like which shortcuts work best near your terminal, which part of certain routes require extra care, even a client’s favorite sports team. All the knowledge fleets tend to take for granted, and only feel the impact of it once it’s gone.

This is information that goes out the door when drivers leave, and it’s difficult to get back. While it’s almost impossible to quantify tribal knowledge, it’s estimated that a company with 1,000 employees loses $2.4 million annually to departed employee knowledge.

Idle equipment. A truck parked against the fence costs money in more ways than one. Idle rigs still need to be maintained, tuned up, and cleaned. Using Upper Great Plains Transportation Institute’s “Idle Equipment Formula”, an idle truck that costs $35,000 a year in interest, depreciation and insurance, which then sits idle for 20% of the year, will cost your company $7,000. The truck essentially becomes a white elephant until you finally have a driver behind its wheel again.

Rigs that aren’t pulling their weight (quite literally) aren’t the only equipment that goes idle thanks to lost drivers. Trailers, tankers, reefer units and more all need to be checked and maintained regardless if they’re in regular use. This also creates more lost productivity, this time for your mechanics. By now, you’re probably realizing that every lost driver has a domino effect on every aspect of your company. It’s pretty disheartening.

Which brings me to last (and most important) point:

Lowered driver morale. Often overlooked because its metrics can’t be quantified, low morale among your drivers impacts your cost of business.

High turnover never goes unnoticed, and especially not among truck drivers. If you lay off a dozen drivers, or a dozen drivers resign from your fleet, a hundred drivers will know about it before the end of the day. And they’ll all have feelings about it…especially the drivers still in your rigs.

It’s difficult for drivers to stay motivated when their carrier seems to be playing musical chairs with drivers. Every rumor and anecdotal tale about you begins to seem larger than life. And soon, both new and veteran drivers will start wondering if it’s time to jump ship. Low morale creates a vicious downward spiral that impacts more than your roster of drivers.

Driver attrition impacts your entire company, creating costs and losses you never even considered. Its domino effect creates a wide web of problems throughout your entire company as well. Every employee is impacted by driver turnover. These hidden costs make the price of driver attrition much higher than what the spreadsheets say.

Make sure you consider them before you decide a few layoffs won’t hurt your bottom line.