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Delving Into the True Cost of Driver Turnover
Delving Into the True Cost of Driver Turnover
Apr 30, 2024
2 min
In our dialogue with carriers of all sizes, one theme that stands out is the total cost of driver turnover and its influence on the ROI of retention efforts. Carriers with lower turnover rates stand out for their comprehensive approach to evaluating the fully loaded cost per hire, allowing them to properly assess the ROI of investing in retention strategies 🔄✨
A common pitfall? Equating cost per hire solely with media cost per hire (💵 spent on leads / # hires), a perspective that often leads to underestimating the full scope of the issue and, consequently, underinvesting in retention 📉🔍
🔑 A few findings worth highlighting on this topic from our research across carriers:
Advertising: Merely the Beginning 🌊: In 2023, advertising expenses were less than 20% of the total hiring cost for medium-sized carriers. Even in 2021, at the height of the freight market, this figure was around 50%. In other words, media or advertising cost represents just a fraction of the entire expenditure! 🥧
People cost: The Overlooked Behemoth 💰: Though "fixed" in the short term, payroll costs (i.e. recruiters salary) represent a significant part of hiring expenses and should be built into the cost when considering long term initiatives that could automate the process and increase productivity. 🔄
Software: The Underestimated Ally 🖥️: Making up about 5% of the total hiring cost, software spending unveils a substantial ROI opportunity for technologies aimed at reducing turnover or hiring expenses. 🚀
🎯 The Core Insight? Carriers are often underestimating the cost per hire by not including key cost items, impacting their ability to plan effective long-term retention initiatives. This narrow focus risks underinvestment and overlooks the broader financial impact. By adopting a more holistic view, we not only clarify the financial stakes but also pave the way for more impactful, sustainable strategies. 🌟
📣 To carriers out there, how are you thinking about cost per hire and how does that influence your decision on retention strategies? We hear you!
