THE DRIVER HIRING GAMBLE • Are You Addicted?
There is a job-seeking CDL holder in front of you • Can you just say “NO”?
Are You Hiring Your Problems? • Why would you want to change, if you are? • Who cares what I do? • Why do they care?
Every decision a trucking executive makes – from who is sitting behind the wheel to the kind of equipment purchased can have an impact on safety.
While most executives view safety through insurance and related costs, there are more complicated cost factors that can affect a carrier’s financial performance.
An applicant who lacks experience or has a poor safety record may cause thousands of dollars in accident claims and jeopardize the safety reputation of your company
Cutting corners in the hiring process can have serious consequences.
“The best a person is ever going to be is at the time they put in an application.”
The cost of idle trucks—measured in higher equipment costs, lost revenue, etc. is offset by…….
…the risk of having a major accident that could result in higher insurance premiums and legal expenses.
Analysis of safety award winners • Average operating ratio (expenses divided by revenue was 0.63% better. 95.48% vs 96.11% • Insurance costs were 0.12 cent less per mile. 7.5 cents vs. 7.62 cents. • ( this was a 1999 survey by Transport Topics)
Operating Ratio • Expenses vs.Revenue • 97%, for example
$.97 cents of every $1.00 • Goes to run company as it currently operates
$.03 of every $1.00 covers • Improved driver wages • New equipment • Unexpected expenses, such as accidents • Fuel price increases • Costs of new regulations
At our example 97% operating ratio • How much additional revenue must be created to cover a $1000 accident (or any other unexpected $1000 expense)?
Answer…… $33,333.00 in additional revenue
Intangibles Competitive Advantage
Intangibles Company’s reputation and employee moral
Poor hiring decisions • Can further aggravate driver turnover
Poor Hiring Decisions result in • Poor quality attracting more poor quality • Fewer referrals from present drivers • More time to do verifications • More drivers leave in less than 30 days • More time spent to do past employment verifications for their next employer
Employee morale work quality can be affected
Tracking down every reference can be difficult and time-consuming.
When you’re tracking the information for a poor quality driver, it’s hard to be proud of your work—or of your boss who made the decision to hire.
A driver with an unstable work history may soon add your company to a long list of previous employers
Recent news article • Overturned semi shut down I-65 for 3 hrs. • 23 yr old driver • 5 passengers were in the vehicle • 3 passengers thrown from vehicle • 2 two-month old babies and a 2-yr old • No seat belts were worn
Drivers who have a history of customer service complaints or performance related problems may jeopardize valuable customer relationships.
Shippers enjoy safe and dependable delivery of the goods entrusted to us.
Workplace Violence • Are you asking the right questions to uncover possible dangerous situations?
SafeStat If you’re a small company one out of control driver can haunt you for at least 30 months
Indiana company with 4 drivers • 8-19-99, one driver received • Use or possession of alcohol • OOS No or invalid driver’s license • OOS Tire depth less than 2/32
Audits • More time allotted to complete • Higher fines
Unsatisfactory = Unsafe • Late 2000 ruling • 60 days to improve
Insurance Insurability and cost of premium
Insurance and claims costs • 2% to 3% of revenue is considered very good by industry analysts • “normal” is 4% to 6% according to 1999 information from Great West Casualty (including out of pocket expenses and reserves)
Failure to establish written qualification standards for selection of mature and experienced drivers.
Failure to follow driver qualification standards, policies and procedures, including FMCSR Part 391.
The motor carrier as well as the examining physician can be held liable for damages that occur if a driver is erroneously found qualified to drive and has an accident.
True story: • File completed in TX faxed to IN for review • File completed on Friday • Driver assigned truck on Friday • Accident on Saturday, left turn over the top of an occupied Lincoln • Driver left the scene • Driver tested positive for alcohol after accident
True story (continued) • TX MVR didn’t divulge prior drug/alcohol related problems during teenage years. • IN review of long form physical indicated driver should not have even been hired. Vision in one eye was 20/50.