November 11, 2016

Why is Your Independent Contractor Turnover Rate so High?

As the pressure to become more agile and efficient continues to grow, many of today’s trucking companies will look to Independent settlement and motor carrier services to help generate greater levels of operational effectiveness.

With the ability to accommodate various levels of scheduling flexibility and locations, provide specialized skillsets and services, and reduce the costs of carriage, Independent Contractors allow modern trucking organizations to make the most efficient and productive use of their resources.

Along with the benefits of utilizing Independent Contractors come many of the same challenges that all trucking companies face in trying to retain their employee drivers. For both employee drivers and Independent Contractor drivers alike, a ‘revolving door’ of commitment and work for a carrier creates costs that erode profits, and can impact the quality of work done for shippers. 

2 Key Reasons for High Turnover Rates

As experts in helping carriers contract the right way with their independent owner and drivers, Openforce has observed two major drivers behind turnover that carriers need to address:

  1. Quality of Carrier Relations
    While there are clear rules that distinguish Independent Contractors from employee owned drivers, it can be challenging for carriers to understand the important differences in how they need to treat independent drivers compared to employed ones. The primary differences center on the fact that an Independent Contractor is a business, not simply an employed worker. As businesses, Independent Contractors are heavily reliant on efficient use of their time, prompt payment for their services, and interactions with carrier staff that are helpful, business-focused and solution-oriented. The most successful carriers have built focused carrier relations programs that rely on best of breed technology and support to ensure:

    • Proper contracting of Independent Drivers.
    • Proper clearance and safety ratings for Independent Drivers.
    • The ability for Independent Drivers to negotiate rates, accept work, invoice for their services, and get paid in a timely manner.
    • Problem-solving and logistics support to make sure loads are handled smoothly and on time.
  2. Safety and Efficiency
    By nature, Independent Drivers are required to work with, and respond to industry needs for a flexible schedule. As a result, Independent Drivers rely heavily on the efficiencies of the carriers they work for. Carriers that can quickly manage the contracting process and get the driver on the road are the most highly prized by Independent Drivers. The best practice in the industry is to take advantage of web-based (paperless) onboarding systems that reduce the cycle times and errors in the contracting process. Yet, efficiency is not the only operational challenge to the retention of Independent Drivers. Safe working conditions in terminal, dock, warehouse, and load handling operations are critical to the successful engagement of Independent Drivers. As Independent Drivers must pay for their own insurances and bear the risk of lost wages from injury or damage to their equipment, they have a huge vested interest in working with carriers who formalize safety program management and create environments that minimize physical risk. Think of it this way—If two carriers post similar loads of equivalent duration and rate, the carrier that will get the driver is the one who does the most to protect the driver and his or her equipment to the greatest degree.

While turnover rates within the Independent Contractor community have historically been high, there are a few strategies that can be leveraged to help trucking companies minimize turnover, retain Independent Contractors for longer periods of time, and reduce operating expenses. The most important is that carriers realize and take advantage of technology and service programs that establish proper contracting relationships, ensure timely payment and enable the Independent Driver to operate safely and efficiently to get the job done.

What strategies has your company implemented to reduce your turnover?

Learn More:

  • Openforce clients experience 30% less turnover than the industry as a whole.
  • Click Here to learn more about how leading carriers have been successful in the face of driver turnover.

Openforce

About Openforce

Openforce® is the leader in technology-driven services that reduce operating costs and mitigate risk for companies using independent contractors. Our cloud-based applications help companies and contractors alike achieve more sustainable, profitable growth by removing financial, operational, and compliance barriers to getting business done.