Cost of hiring a new driver

[Suds43]

I've read over and over in this forum O/O's talking about the cost of putting a new driver thru orientation, etc.
Can someone put some numbers here, explaining the expenses of hiring a new driver for their T/T, S/T or van????

Just curious.

When I went thru orientation, I paid for my own drug test, d.o.t. physical, etc.....

I've been with 3 different companies and 2 of the 3 mentioned it cost the company over $3000/person to put them thru orientation...How in the world is that possible??????

 

[cheri1122]

I think that's an excellent question Suds, and I'm interested in hearing the answer(s), too.

 

[terryandrene]

Several years ago, I read an article in one of the trade mags that said it cost the average carrier $3000 to hire a team in a truck. They were talking T/T. I asked my recruiter neighbor who said, at the time, that was about right for his expedite carrier because the cost included the cost of operating a recruiting department, salaries, advertising, permits for the trucks, orientation, etc. I would think that the cost of putting a team in a truck today would be closer to $5000. A good owner/opeator retention program ought to bring that price down considerably.

 

[greg334]

I am confused here.

A company does not adsorb the cost, it is passed on as operating expenses, most of the time the work of the contractors makes up any losses that are incurred.

I would be truly surprised if the real figure for a contractor to be contracted with a carrier, truck and all would be any higher than $1000 and that includes set up of payroll and communications. Signage and QC installs and IFTA stickers are paid for by the contractor in one form or another.

I say $1000 because much of the work is or should be through the computer, even the IFTA stuff can be done through the computer and depending on the company it could be one person or five people who do the work as part of or their primary responsibility. So if a company puts on 10 trucks in one week, five full time employees (FTEs) who do the work who may be able to completely process twice or three times as many trucks don't cost $50K to get the work done during that week. So if say five people are making $60K a year ($28.85 an hour), their gross wage for the week is $1154, five would be roughly $5800. I can go into foot prints of space and all that but......

The cost of recruiters, advertising and other incidentals are not considered part of the process cost for the contractors to be part of the carrier, that cost is part of the operating expenses by the company as a whole.

The info many people seem to be talking about is employee enrollment, which is a lot more costly than contractors.

 

[terryandrene]

Thanks Greg. That clears things up for me. From now on I'm not going to adsorb the cost of running my business, I'll just pass things on as operating expenses

 

[Pappy]

Lets forget about the cost of advertising, recruiters and all the crap!
If you own a tractor-trailer, you can qualify a driver(physical-drug screen-etc) and put him on the road for around $300.00 and thats the bottom line!
Pappy

 

[ATeam]

In trucking magazine articles that mention a cost for adding a new driver, the number is $5,000 and up.

When we went through orientation, I was surprised to see just how much was involved. Every item they give you has effort and expense behind it. Every form you complete has to be processed. The number of compliance hoops a carrier has to jump through is a significant burden indeed. The recruiting department is a necessary carrier expense too. New drivers do not appear on their own. To replace the ones that leave, a recruiting effort must be funded and made.

It is one of the first things that come to mind that a good driver retention program would reduce driver turnover and thus justify the costs of the retention program.

A component of a good retention program, I believe, would be a day or two of additional training at orientation. The training would include company history and mission info, and training on why it is both vital and desirable to take pride in getting the job done. It would also include breakout sessions for people to sort into according to their abilities; such as beginning log book skills for newbies, and for those in need, calculating your costs per mile and calculating your profit and loss. Sessions on health insurance for self-employed people would also be helpful, I believe. Additional training could also include videos showing dispatchers at work and following a load start to finish, showing how it originates, is set up, is dispatched, etc.

But, from people at FedEx that I have already talked to about this, I know that such retention efforts are not likely to happen. Drivers will squeal like stuck pigs about the time they are being forced to waste to learn something they already know everything about, or learning something "real truckers" who know what it is like to be on the road don't need or want to know in the first place.

 

[x06col]

From what i've seen, it will remain way less expensive to recruit than to practice a successful (read welfare) retention program. With all the agendas I observe from the driving pool ( barn sour, knows it all, knows nothing, lazy, unable, etc.) there would be no bottom to the hole in which you would pour funds in the name of retention.

 

[greg334]

Retention can be done if some companies tighten up their employees and be more proactive in sales but that is for another post.

The $5000 seem to be the cost of bringing on an employee of a company, not a contractor. even though there is paper work to be done, the cost does not approach $5000.

Phil, when you talk about health care programs, and things outside of the company's requirements, you are really crossing over that line between contractors and employees.

There is a real solid rule that is used when people hire contractors to do a job, a company really can not train a contractor on things that are not specific to that company - MEANING that you can't train a contractor how to log, on health care issues, or how to use your laptop to surf the web (outside of using the company's own website) - unless there is a charge made for the training.

The other stuff you mention is not bad ideas by the way - I have only heard a mission statement mentioned once that that was a couple weeks ago.

 

[tallcal101]

It's a lot cheaper if the driver is honest up front about their back ground and police record.It spares the expence of getting all the wheels in motion and the possible loss of getting a legitimate canidate started.
"What do you mean I don't qualify,I only hit my ex wife a couple of times,and it was not even very hard?"%#$ idiot.
I wish I had a $ for baffoon who lied to me.

 

[greg334]

I like the one who applied to drive for me and I got this call saying don't even consider him. I told him that the company thought he wasn't a good risk because of his past and his response he did the time for the two bank robberies, being caught with contraband while going into Canada and the assault on the old lady which was done while he was strung out on drugs, and he has hasn't done any drugs in a couple weeks.

 

[JohnMueller]

Suds;

This is a great question. It could have been posted in the "Ask the Recruiter" forum also.

Reality of recruiting a driver or owner-operator:

The trucking industry places an average cost of $5,500 per recruit

Why so much?

*Trucking company places half-page ad, one issue, in a trucking magazine - cost around $1250

*Trucking company hires recuiter or safety person to recruit trucks, average salary - good recruiter - $40,000. Recruiter hires @ 100 per year - cost per driver - $400

*Trucking company pays portion of recruiter's taxes due on wages, benefits package, retirement plan - an additional $20,000. Recruiter hires @ 100 per year - cost per driver - $200

*Trucking company builds building or pays rent for operations/safety/recruiting - portion attributed to recruiting varies, estimated cost per driver - varies, but not cheap.

*Trucking company installs phone system and places toll-free 800 number. Recruiter probably spends 2 - 3 hours with potential driver before driver commits - cost - @ $40

*Trucking company prepares for driver for orientation - paperwork preparation time alone - 3 - 4 hours per driver, clerical person prepares at $27,500 salary - about $53, not including taxes and benefits.

*Trucking company materials for orientation - permits, driver's manual, actual paperwork, compliance pocketbooks, file folders, accident camera kit, logbooks, etc .... - estimated cost per driver $500

*Trucking company purchases signs for vehicle, small size - $35 per truck (imagine the cost of large signs) Trucking company pays to have those signs applied. Total cost per driver - $50

*Trucking company conducts an orientation - let's do a short, 1 day deal, conducted by one person or employee, $160 for wages, (not including portion of taxes or benefits package) 4 drivers in orientation, cost per driver $40

*Trucking company buys lunch for each driver in orientation, cost per driver - $10

*Orientation materials, such as VCR for videos, Safety Videos, ID Card machines, ID Card supplies and the similar, cost varies, but let's just say $10 per driver.

*Orientation completed, now clerical person spends another 3 to 4 hours on each driver to build computer profiles in dispatch, build profiles for satellite software, keys drug testing info and the similar - another $53 per driver, not including costs for portion of taxes and benefits.

Mechanic installs Satellite system in truck........

I could continue with all of the details if you would like, but should not be necessary. You get the idea.

Why driver retention and lowering turnover is so important. Drivers doing their homework to discover if what they (the driver) wants to do is closely matched to what the company actually does, and why it is so important for the company to set good standards on the hiring requirements of Owner-operator/Drivers.

FYI - the Trucking Industry as a whole has driver turnover of 129% per year. Some of the quality carriers, such as Crete, have turnover at around 34%. PTL LLC is at 23.44% and I am very proud of that.

Great question. Hope this helped.

Thanks,
HotFr8Recruiter

 

[Suds43]

Thanks Hotfr8.........
that clears up alot of questions I've always had, hope it did for others also....

 

[hello7]

Well Iam just starting out in the business am a driver looking for a truck but besides that it is going to cost me $25 for CDL B and $45 for dot phys and $275 for skill test and rental from training company so no one has to absorb the cost.