Dec 1, 2007 12:00 PM
In Today's era of truck driver shortages, finding and keeping drivers is a particular challenge for those involved in foodservice because it is not a driver-friendly industry. Most of the time, a foodservice driver doesn't back up to a dock and have someone unload his truck. Rather, the driver has to do the unloading, and that typically involves carting product into customers' businesses.
In addition, foodservice drivers often have to deal with customers who are irate because of product shorts or misunderstandings about product pricing.
Recruiting drivers has become all the more challenging as the driver shortage has continued. Some foodservice companies recently have been hiring drivers who they wouldn't have looked at 10 years ago, and that is resulting in safety issues.
To address this matter, the recent annual Foodservice Distribution Conference & Expo included a workshop on Work Incentives for Drivers presented by Wade McCarter, director of operations for Banta Foods, Springfield, Missouri. He discussed his company's incentive plan and explained how it has helped reduce driver turnover significantly.
“At Banta Foods, we have put together a pay package that has been very successful,” McCarter said, “because we established clear expectations, and we reward accuracy, safety, and performance. The package is comprised of component pay, safety teams and incentives, and improvement teams, all of which have contributed to our getting long-term employees.”
The improvements teams have been instrumental “because they help us communicate to our workforce what is going on and how we are changing things for the better.” The teams meet every two months to air out problems. Managers meet with drivers, warehouse people, office people, sales people, and others and work through any issues.
“In foodservice, drivers are a key to the business and to customer relationships. A good driver can often smooth talk a customer to make things right, or a driver can make things wrong, and that will make the difference between you getting that next order or not getting it. What's more, a high driver turnover rate adversely affects customer-driver relationships. Stability is important to a customer.”
Banta Foods decided to use a component pay package as a way to keep drivers, as well as to increase “our chances of hiring good drivers,” said McCarter. “Whenever you hire someone, you're taking the chance of hiring someone else's problem. Plus, training is very costly.”
The component pay package has been effective. The company's driver turnover went from 83% in 2001-2002, to 77% in 2002-2003, to 66% 2003-2004, to 52% 2004-2005, to 74% 2005-2006, to 38% 2006-2007.
“The first thing we did was assure drivers that they weren't going to lose any money,” he said. “We ran the component pay system parallel with the regular pay system for about two months to show drivers that there was a bigger possibility that they could make more money. We also told them why we were making the change.
“Communication is very important. You must let drivers know why changes are being made, and how these changes will benefit them and the company.”
The component pay program was set up on several components:
|National Account Stop||$5.30|
The safety amount was calculated by determining the time it takes a driver to perform proper pre-trip and post-trip vehicle inspections.
“Our downtime pay was kept purposely low,” said McCarter, “because when a truck is down, we're not making any money, so we don't want to give drivers an incentive to sit.”
Vacation pay is figured by going back 12 weeks, taking the total pay for that period, and then averaging it.
The company reviews its component pay package annually, making any needed adjustments. It is looking at adding fuel savings to the package.
McCarter said a number of positives have originated from the component pay program. Chief among them:
Better delivery window accuracy. “This caught us by surprise,” he said. “For instance, if a customer opens at 8 am and your truck goes out at 6:30 am and gets to the customer at 7 am, and you're paying an hourly rate, the driver is napping while waiting for the business to open.
“Our drivers don't want to sit because they're not making any money. They contact the routing department and say: ‘Either start my route later or add another stop. I need to be delivering cases.’”
Increased load size. “The first week, our load size increased by 28 percent. Load size is being driven by drivers because the more cases they deliver, the more money they make.”
Increased driver accuracy. “This goes against the grain,” he noted, “because if drivers are throwing more cases, you'd expect more mistakes.” This was avoided through a Quality of Work element within the component pay package. If all the required paperwork is not properly completed, the driver is charged a fee of $12.50 for a national account stop or $15.00 for a street stop.
Improved customer relations. “This also goes against the grain, but because drivers want more cases, they care more, and they provide better service. Drivers don't want to lose a customer because if there's a hole in their route, it costs them money. Our drivers will call their salespeople and let them know that a customer is buying certain products from competitors. They want more cases.”
Here again, the Quality of Work element is a factor. If there is a justified customer service complaint, the driver is charged a fee of $12.50 for a national account stop or $15.00 for a street stop.
Increase home time for drivers. “Because drivers were paying more attention to delivery time windows, getting deliveries made quicker, and weren't sleeping or waiting along the road side to burn time to complete their shifts, they had more time off.”
McCarter provided two main warnings for those thinking about trying a component pay package. “Most importantly, you need to have accurate tracking. You can have major problems if a driver's pay is not correct.”
Secondly, he said, there needs to be checks and balances in place to assure safety and customer service.
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