Walmart Transportation, which operates more than 8,000 trucks in one of the country’s largest private fleets, has shown of late it’s not immune to the industry’s pressing need for new drivers.
In recent weeks, the company has announced a fleet-wide pay increase to push its starting pay to $87,500 annually, with more senior drivers able to earn over $100,000 a year. Walmart also announced intentions to hire 900 additional drivers in 2019, and it has overhauled its driver onboarding process to bring on those new hires more quickly.
The company’s moves to be more aggressive about its driver hiring and retention show that, despite a recent slowdown in economic growth, the market for drivers is still drum-tight, and competition among fleets, even those offering the best pay and benefits, is fierce.
“It’s clear from the tactics that Walmart is having to apply [that] it’s pretty tough out there,” says Kent Ferguson, director of transportation solutions for employee background check provider HireRight. “Traditionally, private fleets are able to recruit from for-hire fleets without any issues,” he says, but lately, “private fleets are having difficulties they haven’t had” in the past.
Private fleets like Walmart’s have generally been insulated from the war for drivers that for-hire fleets, especially larger ones, continuously fight. Higher pay, more predictable home time and modern equipment have allowed them to readily pluck from the for-hire ranks.
But the trends of an aging driver workforce and steady pay increases in the for-hire segment are changing that dynamic, says Ferguson. Larger carriers began instituting pay increases in late 2017, and smaller carriers followed last year. For-hire fleets have also made investments in upgrading their fleet equipment, says Ferguson.
Also, the freight boom early last year, combined with the effects of the federal ELD mandate, inflamed the industry’s driver recruiting and retention needs in both the for-hire segment and among private fleets.
Michelle Malashock, a spokesperson for Walmart Transportation, acknowledged that increased competition for drivers triggered the company to make changes, specifically in its driver onboarding process. “When we were looking at the driver shortage and the needs we had, we [had] to improve the system,” she says. The company was losing hires because of the time it took to bring them in for training and testing.
Even though Walmart “offered more money and better benefits,” she said, “it was taking too long.” What was once a two-month process has been pared to roughly three weeks, she says, from the company’s point of initial contact to when drivers are behind the wheel in operation.
Also, instead of its previous one-day event, in which many drivers were turned away for failing portions of its testing protocol, Walmart has created a three-day training and testing event for all of its new driver hires. These drivers, who have already been given conditional employment offers and are on the company payroll, now receive instruction on Walmart’s standards, rather than simply showing up expected to know their procedures, says Malashock. Walmart began piloting the new onboarding process last fall and has now implemented it nationwide.
The overhaul has worked, she says, with roughly 85 percent of its hires now successfully completing the training/testing program.
Though those 900 drivers are only a fraction of the tens of thousands of driver hires that fleets will make in 2019, it’s likely to have an impact on the for-hire driver pool, says HireRight’s Ferguson.
“I think it’s going to hit for-hire carriers pretty hard,” he says. “They’re already struggling to keep the drivers they have. As far as freight volume goes, motor carriers could haul more if they could get more drivers. We’re going to see what the trends are on the for-hire side to try to stem” the effects of Walmart’s new pay package, he says.
Also, once hired, it’s hard to wrestle a private fleet driver back to the for-hire segment. For instance, Walmart’s annual turnover rate is just 7 percent, says Malashock. That’s dramatically lower than the 90-plus percent turnover rate that for-hire fleets operate at.
Walmart requires drivers to have 30 months of driving experience over the prior three-year period, so for-hire carriers will need to continue to work to recruit younger entrants to the industry, says Ferguson, particularly as the existing driver pool continues to age into retirement.