We often talk about ways to improve your recruiting campaigns or how to get the most out of your campaign spend. One thing that tends to get less attention is the overall spend itself. Your recruiting budget.
There’s a famous saying that goes “numbers don’t lie.” Unfortunately, if you don’t know what you’re looking for or how to interpret those numbers, they absolutely can lie. And that’s where we’ve seen many fleets get frustrated. They’ve crunched the numbers and come up with a plan, but they still seem to fall short of their goals. Why?
Over the years, we’ve come to find that if your budget is falling short and you aren’t meeting your recruiting goals, it generally comes down to a few key issues. With that in mind, let’s talk about three ways to build a more efficient driver recruiting budget.
1. Stop Wasting Time and Money on the Wrong Leads
Wasting time and energy can be just as detrimental as wasting money. No matter how good your team of recruiters is, there are only so many leads they can effectively handle. When pouring money into campaigns designed to produce large quantities of leads, you must consider the quality of these leads. Otherwise, your recruiting staff will be overwhelmed with a list of bad leads i.e. people who will never drive for you.
Our research indicates that the optimum inbound responses per recruiter is around 400 – 600 per month. It’s also worth noting that the number of leads your recruiters work within a given month is the most predictive of a low cost-per-hire. So, do all you can to hit that sweet spot while avoiding under or overloading your recruiting staff.
Not only is this a colossal waste of time and money, it can also begin to wear on the morale of your team. To avoid falling into the trap of wasteful spending and bogging down your recruiters, you need to limit your messaging to only those who meet your criteria and bring value to your fleet.
Refine your targeting and spend the money needed to generate the kinds of leads that result in valuable hires. More leads isn’t always the answer. The less unqualified leads your recruiters have to deal with, the more time they have to focus on the leads that will make a difference for you. This is, of course, in addition to the money—and headache—you’ll save by increasing your efficiency and eliminating unwanted or unqualified drivers from your recruiting pipeline.
2. Remember to Account for Factors Like Driver Turnover
One of the most common stumbling blocks we see is that trucking fleets fail to account for factors like turnover in their budget. This is a huge blindspot and can really skew the numbers. As we all know, turnover can be a major problem in your fleet and its makeup. In 2018 alone, the ATA reported yearly turnover rates of 89% (large carriers) and 73% (smaller carriers).
Your numbers are more than likely a little different than that, but the fact remains: Driver turnover is too big to ignore and must be factored into your budget if you want to reach your goals. As important as turnover is, it isn’t the only variable that needs to be remembered. Let’s consider what we call the budget building blocks.
The Budget Building Blocks
- Current Truck/Driver Count
- Open Positions
- Trucks/Drivers to be Added
- Fleet Turnover Rate
- Fleet Average CPH
- Referral Hire Rate
Working every one of these building blocks into your budget increases your budget’s accuracy. Your fleet is unique and has its own needs. Your budget should reflect those needs.
Need help getting started with the budget building blocks?
Juggling these factors and making sure you’re on the right track is really difficult, which is exactly why so many fleets struggle to build an efficient budget that’s right for them. Even more frustrating is trying to justify spend and ensure you are actually targeting and hiring the drivers you need.
3. Tie Your Budget to Revenue
One way to immediately set your fleet up for defeat is failing to tie your budgetary needs directly to revenue. Every fleet has the same ultimate goal. Make money. And what happens if you don’t have drivers on the road? You don’t make any money. That’s a problem. Fleets large and small alike are trying to figure out the best way to maximize earning revenue and stay profitable.
In order to achieve that goal, you need to have an adequate budget. Even if you’ve done everything else right, if you’re not able to tie your budget to earning revenue, you may not be able to get the spend you need. And when you think about it, it’s not that hard to understand why. CFO’s, company accountants, or whoever may be in charge of your finances focus on two things. Revenue and cost. This means even if you’ve taken all the budget building blocks into account, but you can’t tie it all back to generating revenue, you will fail to justify your spending.
Without a direct link to revenue, all the financial team has to look at is cost. You have to be able to prove that the cost is worth it and accomplish the company’s goal of generating revenue. In other words, you need to be able to illustrate that spending this amount of money will hire this many drivers and allow us to move this amount of freight. But with so many ever-changing variables, it can be extremely difficult to take all pertinent factors into account and prove why you need to spend X amount of dollars to get X amount of drivers. It’s hard to know exactly where to begin.
Randall-Reilly’s Recruiting Budget Calculator
After working with countless fleets of all sizes, Randall-Reilly’s driver recruiting team was able to come up with a tool to help. The recruiting budget calculator was designed to remove as much confusion as possible with you in mind. The calculator is formatted as an Excel file available for download.
Step by step, piece by piece, by simply filling in the spreadsheet with your fleet’s information (the budget building blocks), the calculator can take the guesswork out of building a recruiting budget for you. Best of all, it helps you tie everything back to revenue. So you are able to see exactly how the money you put into your recruiting not only helps you seat drivers, but how your spending translates into revenue.
We’ve tried to keep everything as straight-forward as possible with the calculator, but with so many factors at first glance it can seem daunting. A video walk-through of how to use each aspect of the calculator is available on the calculator landing page. If you’re still not sure and want a little more information or would like to talk to one of our representatives, give us a call, we’d love to hear from you.
With trucking, it often feels like you’ll never get ahead. Rates and demand are always in flux, and drivers are perpetually leaving for greener pastures. Unfortunately, those things are likely never going to change; but one thing you can change is how you build and approach your recruiting budget. You can stop wasting time and money and get the most out of your spend. Whether you choose to use the recruiting budget calculator—on its own or in conjunction with a Randall-Reilly associate—or other services, the tool can be the first step on your journey to building an efficient and effective budget for your fleet.