Compensation Venture Group, Inc.
An article in today's CFO.com email blast - "Will a Driver Shortage Cost Companies?" - highlights the need for ROI-based analysis of compensation practices. A spokesperson for GE Capital is quoted: "Truck driver turnover ranges between 130 percent and 140 percent, which equates to replacing employees every eight months, Tse says. "It takes a toll on the organization both from a resource standpoint and from a cost standpoint," she adds. As a result, trucking businesses are looking at ways to attract and retain employees by giving bonuses, increasing paid leave, and reducing paperwork."
This person goes on to point out that "When trucking companies can't stay staffed up, they're limited to how much they can haul." Hard to aruge with that logic. Take away my keyboard and it's almost impossible to post to a blog (given the sorry state of voice recognition software).
So, hire me! No, not as a truck driver, I wouldn't be very good at that even though I've never been at fault in an accident and haven't had a moving violation in over 15 years (that last one in 1991 on a three-point turn technicality was SO petty.) Hire me to help you understand the screaming opportunity to use ROI-based compensation analysis to fix the problem. OK, end of shameless self-promotion.
I have seen many executives agonize over a couple of percentage points in pay increases, then leave that meeting to go to the next one discussing capacity shortages, revenue shortfalls, and earnings impact. Hmmm. Just like this trucking article.
An ROI analysis would likely show that a turnover rate of 135% per year and an average turnover cost of, say, a conservative 30% of base wages (that by the way is extremely conservative) would easily fund a significant pay and/or benefits increase that would solve the attraction and retention problem and save not only the trucking industry but the downstream supply chain customers (like you and me), from this projected crisis.
It's pretty easy, but it requires someone in HR with financial savvy to talk to someone in Finance, and the combined viewpoint to get to the CEO and the Board of Directors. And in some organizations that is much more of a challenge than attracting, retaining, and motivating truck drivers. Isn't that sad?
Attend my webcast, The Real Meaning of ROI for Compensation Professionals, sponsored by WorldatWork on 01 November at 9:30am PST. (Sorry, there's another shameless self-promotion.) Remember to change your clocks on 29 October or you’ll get to the webcast an hour before I do.
The nice thing about web-based meetings is that we are insulated from trucking-based supply chain issues. But let’s hope the truck-transported coffee gets to our offices on time because if it doesn’t that could indeed be a crisis resulting from this trucking problem, especially in Seattle where that would be reasonable cause for calling in sleepy.