Are you using the same tactics to keep up with driver turnover and expecting different results? Costly recruiting methods and increasing pay just don’t compare to having a sustainable, holistic strategy to keep drivers contracted.
Today’s need for drivers is at an unprecedented level with the turnover rate reaching its highest point in five years. According to the latest data from the American Trucking Associations’ (ATA) Trucking Activity Report, the annualized turnover rate increased 4 percentage points to 98 percent in the second quarter.
Just when you think things can’t get worse, the ATA estimates the industry is now short 51,000 drivers on a base of about 500,000 drivers. If nothing changes, the industry will be short 160,000 drivers by 2026.
Better ways to remedy driver shortage
As every driver is unique, when it comes to finding and keeping qualified drivers in this competitive landscape—there is no one quick fix. However, new tactics and retention strategies made possible by a 1099 management platform can simplify processes, improve communication and provide additional value to drivers, while keeping an arm’s length distance to support the independent contractor (IC) model.
Here are some proven driver management strategies that help Openforce clients get out of the driver administration business and retain high-performing independent contractors.
1. Reduce contractor drop offs with automated enrollments
According to a CareerBuilder survey, companies that automate their onboarding process experience significant benefits.
Traditional onboarding methods require owner operators to print out applications, sign, scan or fax documents, which creates friction and increases the risk of drop off. A streamlined and automated enrollment eliminates human error and the arduous task of ensuring that all contractual information has been properly captured. Openforce’s platform additionally verifies the owner operator’s information in near real-time by accessing public records from the IRS, USPS, DMV and LexisNexis. And it’s easier for drivers who are out on the road and doing everything on their phone or mobile device. Openforce’s mobile-first process dramatically simplifies enrollments with friendly screens, uploads, e-signature and fast response times, all designed to speed enrollments.
2. Leverage compliance tools that improve communication, set expectations and empower drivers
Compliance is, and will continue to be, the primary focus for any company that chooses to work with independent contractors. The risks associated with noncompliance are rising, and organizations must ensure that all owner operators remain compliant with state and federally mandated regulations.
To minimize risk, companies are leveraging automated compliance tools that help initiate and establish proper business agreements. A clear communication path through a back-and-forth negotiation process and transparent agreement signed off by both parties, work to protect both companies and independent contractors against any potential issues that may arise.
What’s more, drivers feel greater respect through this processes—are ultimately more satisfied being treated as an empowered independent business owner—which results in lower turnover.
3. Accurate, reliable pay that also provides early access to settlements
The accurate and on-time delivery of settlements are extremely important to the livelihood of contractors and their subcontractors. That’s where a secure payment platform designed specifically for independent contractors makes all the difference.
Not only does this help create a seamless and expedited settlement process, it also removes administrative burdens that often result in unintended errors. Companies can put settlement processing and 1099 filings on autopilot, while independent contractors are supported by live customer service agents.
Additionally, as part of Openforce’s settlement platform, contractors have the ability to receive early settlement transfers for a low, flat fee. Designed to help contractors improve access to cash, when they need it, Openforce helps independent contractors stay contracted by managing their cash flow challenges.
4. Draw on qualified drivers while helping owner operators maximize capacity
Even with a full staff of talented HR professionals, aggressive recruiters and social media ads—it’s tough to find qualified drivers to fill your immediate needs. Before spending additional time and money to find new drivers, with Openforce’s 1099 management platform, clients can complement traditional recruiting methods by first reaching out to existing drivers.
Target contractors by specifying your need and location, and the system does the rest. When drivers log into their contractor portal, they’ll immediately receive an alert with these details. It’s a true win-win for both the contracting company and owner operator.
Splash alerts are a convenient and effective way to notify your carriers of travel team opportunities. We are exploring ways to use them for other business needs.
5. Keep contractors happy and reduce their financial stress through specialized benefits
Some of the perks that help attract and retain independent contractors are surprisingly simple. Contractors are looking for more than good pay. They’re looking for much needed benefits, discounts and resources to build their business.
But without an employer to provide these benefits, it can be difficult and stressful to find, particularly ones that are geared for independent contractors. To help fill this gap for both contracting companies and independent contractors, Openforce offers an array of resources such as discounted insurance programs, truck leasing programs, cash advance services, and more.
Whether it’s establishing a business entity, filing taxes, specialized training or taking advantage of deep retail discounts, Openforce’s built-in member benefits can provide the valuable support that companies are unable to offer.
Openforce clients experience a 30% decrease in contractor turnover when compared with the industry average in transportation.
Considering the thousands of dollars it costs to find and recruit just a single driver, it pays to have an established independent contractor management (ICM) platform to keep your driver turnover rates to a minimum.
Openforce is well-versed on the challenges and leading 1099 technologies and services for reducing independent contractor turnover. Screening and onboarding the right drivers for your fleet, offering valuable business tools and benefits, and setting clear expectations right from the start are just a few ways to improve the turnover rate and retain highly qualified contractors.
Contact us to learn more