Now more than ever, you need an efficient way to recruit more drivers. If your turnover rate is near the national average, still well over 70% for carriers in the first part of 2019, something clearly isn’t working. Most carriers need to rethink recruiting processes but all of that begins with maximizing returns on your recruiting budget.
Practically everyone in the professional driving industry has a recruiting budget allocated for the year. This money needs to be spent efficiently and carefully. Replacing drivers is an expensive and time consuming process, and if you have to replace three quarters of your fleet year to year, that’s a ton of wasted money, especially if your vehicles sit idle. So what does that have to do with how to spend your recruiting budget?
Lifetime Value of a Driver
Our friends at DriveMyWay break it down as simple as you can get with analyzing recruiting information. Start by making sure your Applicant Tracking System has the reports to calculate cost per hire by source. After that, step 1 is very simple: spend your money that has the most effective cost per hire. Step 2 requires your Applicant Tracking System to track or integrate with another system to measure tenure with the organization. The metric your calculating is Lifetime Value of a Driver.
Lifetime Value of Driver = Revenue earned by Driver – Cost of Driver Acquisition
The Lifetime Value of Driver is evaluating what sources produce drivers that will stick around with you longer. It’s worth noting that turnover has significantly more to do with how you run your operation than the lead source. However, lead sources that produce inbound candidates (people seeking you out because your job looks great to them) will have a higher retention rate than outbound sources (any source where you’re reaching out to be one of many contacting that driver that day). Cost per hire is still an important metric to evaluate when deciding where to spend money but Lifetime value of a driver needs to be a part of your decision making.
Sounds simple enough, but it takes some leg work and the right tools. You need a simple way to track leads, candidates and hires that doesn’t involve an overworked recruiter creating pivot tables in excel. Companies are switching to transportation Applicant Tracking Systems like A-Suite because they:
- Make it easier for candidates to apply so you get more leads.
- Uses tracking links so you know automatically which lead sources produce hires.
- Provide tenure data to recruiters looking to find sources that produce drivers who will stay.
Think how you create your recruiting budget differently. Retention and Recruiting are the same effort. Start to measure your metrics accordingly.