2016Mixer Driver Recruitment and Retention SurveyNational Ready Mixed Concrete Association

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2016 Mixer Driver Recruitment and Retention Survey

Executive Summary

October 2016

Tim Kauzlick, CEMEXNRMCA Operations, Environmental & Safety Committee Chairman

David Williams NRMCA Operations, Environmental & Safety Committee Vice Chairman

Chip Wildman, Concrete Supply Company NRMCA Operations, Environmental & Safety Committee Human Resources Task Group, Chairman

Vickie Tyminski, Carroll Concrete NRMCA Operations, Environmental & Safety Committee Human Resources Task Group, Vice Chairman

Gary Mullings, NRMCA Senior Vice President, Operations and Compliance, Liaison to the Operations, Environmental & Safety Committee

Eileen Dickson, NRMCA Vice President, Education, Liaison to the Operations, Environmental & Safety Committee Human Resources Task Group

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2016 Mixer Driver Recruitment and Retention Survey

This is the second year for NRMCA’s Mixer Driver Recruitment and Retention Survey. It examines the state of the mixer driver employment pool from January 1, 2015 to December 31, 2015. Data reflects 28% of NRMCA’s estimated 75,000 drivers. NRMCA also estimates the total ready mixed concrete industry employment population at approximately 135,000 employees; mixer drivers are 56% of that total, the same ratio as in 2015. The survey’s response rate per question averaged 97%.

The survey grew from 21 questions in 2015 to 31 questions in 2016, based on NRMCA member recommendations. One new question found 51% of respondents turned down business due to lack of drivers to deliver product. The additional survey questions focused new drivers. The study continues to report on staffing levels, retention rates, average age, tenure rate, and internal job mobility. It also looks at the total turnover rate, voluntary turnover rate, involuntary turnover rate, layoff turnover rate and reasons for termination as well as reasons mixer drivers quit. Finally, the study analyzed the 2015 hiring rate, vacancy rate, hiring trends and challenges, and the projected 2016 hire.

Anonymous responses were submitted by ready mixed concrete producers from May 1, 2015 to June 15, 2016. The survey’s data set represents 138 companies or company divisions. The response rate for the 31-question survey was 97%.

The 2015 Mixer Driver Employment Pool

Staffing Level and Retention Rate

NRMCA’s 2016 Fleet Benchmarking & Costs Survey’s estimated 75,000 mixer drivers were employed in 2015. The Bureau of Labor Statistics (BLS) reported in its Occupational Employment Statistics Report in May 2014 that there were 1,700,000 heavy and tractor trailer truck drivers. Mixer drivers are counted in that population, at 4%. NRMCA also estimated the total 2015 industry population at approximately 135,000 employees; mixer drivers were estimated to be 56% of that total.

In order to ascertain the success of retaining enough employees to maintain an effective business, one calculates the rate of retention. It is determined by taking the number of “stayers” at the end of the calculation period divided by the number of employees at the beginning of the calculation period. It is reported by percentage. Retention rate does not factor turnover, that is, those who left in the same period, a company’s “churn.” That consideration follows.

With a 100% response rate, this sample collectively employed 19,405 mixer drivers on January 1, 2015. On December 31, 2015, respondents employed 21,062 mixer drivers (100% response rate). To calculate the retention rate, 19,024 was divided by 21,062. The total increase of the survey population between January 1 and December 31 was 8.5%, or a 108.5% retention rate, up 2.3% from the previous year. The average producer employed 141 mixers drivers on January 1, 2015 and 153 mixer drivers on December

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31, 2015. The median was 60 drivers per producer on January 1 and 64 drivers on December 31, 2015. This survey’s December 31, 2019 population represented 28% of the estimated 75,000 mixer drivers.

Average Age

Mixer drivers’ average age in 2015 was 46 years old, with a median of 47 years old. The U.S. Department of Transportation and US Bureau of Labor Statistics also estimate the average age of a commercial driver at 46. Twenty-eight percent of mixer drivers in this survey were younger than the average American worker, 42 years old. The response rate was 94%.

This survey found

- Three percent of mixer drivers’ average age was over 55. The American Trucking Association’s estimates long haulers with 17% over 55. Three percent of companies’ driver fleets were over 55. In last year’s survey, nine percent of producers’ drivers’ average age was over 55.

- Fifty-four percent of mixer drivers were over the average age of a commercial driver. - Thirty-one percent were under the average age of a commercial driver - Eleven percent were under the average of an American worker.

Tenure

The survey asked respondents to report the average tenure of their fleet of mixer drivers. Nationally, it dropped to 9.6 years; last year it was 10 years. The median dropped one year, to 8 years, with a high of 25 years and a low of 1 year. The producer reporting the highest average age (65 years old) also reported the highest average tenure (25 years), but in general, there was no correlation between average age and average tenure.

In the October 2016 BLS JOLTS report, employee tenure dropped to 4.6 years on 12/31/15. Only 8% of this survey’s respondents fell below the BLS’s national tenure average. BLS further reports that 29% of men had been with their employer over 10 years; this survey’s population was slightly higher at 32%.

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Separation from the Company

Turnover Rates

While the retention rate measures the staffing level at the end of a period, the turnover rate measures departures within the same period. Coupled together, they paint a fuller picture of the fluidity of a company’s staff.

The total turnover rate was calculated by dividing the total number of mixer drivers on December 31, 2016 by average of drivers reported on January 1, 2015 and December 31, 2015The industry’s national turnover rate was 32.2%, up 12% from the previous year. In 2015, the average turnover was 47 mixer drivers; the median turnover was 12 mixer drivers. Respondents’ departure pool was 23,075 of the 75,000 mixer drivers.

According to the BLS, turnover is an industry calculation. Only with future years’ data will the ready mixed concrete industry ascertain its turnover rate norms. The BLS, June 2015, Jobs Openings and Labor Turnover Survey (JOLTS) calculated the US 2015 turnover rate at 16.4%. ; the American Trucking Association (ATA) ATA reported on July 6, 2016, the long haul turnover rate dropped to 80% from 93% in 2014, yet salaried drivers who are home frequently had a turnover rate of just 12%. Private fleet turnover rates averaged 8%, about half of the US turnover rate.

This survey reported approximately two-thirds of mixer drivers quit to one-third who released by the company in last year’s and this year’s survey results. ATA and BLS reported approximately the same ratio for CDL drivers.

The voluntary (quit) turnover rate was calculated by taking the total number of quits as of December 31, 2015 by the average number of drivers on staff on January 1, 2015 and December 31, 2015. The national voluntary turnover rate for mixer drivers was 20%, up from 11% in 2014. The average voluntary turnover was 15 mixer drivers. The median turnover was 5 mixer drivers.

In light of the tight job market, NRMCA then asked respondents what percent of their mixer drivers who quit in 2015 were their top performers. With a 94% response rate, producers stated they retained their best. Only one producer’s quitting drivers were between 76%-100% of those who left the company. On the opposite end, 77.7% of respondent said less than 25% of those who quit were their best mixer drivers. 93% of respondents reported less than 50% of the drivers who quit were their top performers

NRMCA also asked, of the full time drivers hired in 2015, how many of them quit in 2015? Of the 75,000 mixer drivers total employment pool, 10,836 quit, for a new-hire voluntary turnover rate of 49%. They represented 14% of the total driver pool. Two-thirds quit within their first three months on staff.

The involuntary turnover rate represents separations initiated by the company. It was calculated by taking the annual total number of involuntary separations as of December 31, 2105 divided by the average number of mixer drivers on staff on January 1, 2015 and December 31, 2105. The involuntary turnover rate included layoffs, discharges, retirements and any other circumstances initiated by the

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producer. The involuntary turnover rate was 12%, up from 7 % in 2015. The average involuntary turnover was 18 mixer drivers. The median turnover was 4 mixer drivers.

Within the involuntary turnover category, NRMCA calculated the involuntary temporary turnover rate. It was calculated by taking the total layoffs divided by the average number of driver employed on January 1, 2015 and December 31, 2015. Twenty-three percent of respondents reported they temporarily laid off mixer drivers, representing three percent of the this survey’s total 2015 population of 75,000 mixer drivers. The national involuntary temporary turnover rate was also three percent. The average involuntary voluntary turnover was five mixer drivers. The median turnover was zero mixer drivers.

The following chart details turnover results.

RMC Industry Turnover Rate Summary

Survey Response

Rate

Turnover Rate

Average number of mixer drivers

per company

Median number of mixer drivers per

company National Turnover Rate 97% 32% 47 12 Hired/Quit in 2015 93% 49% 5 3 Voluntary Turnover Rate 100% 20% 30 9 Involuntary Turnover Rate 11.3% 12% 18 4 Involuntary Temporary Turnover Rate 93% 3% 5 0

Why Producers Terminated Mixer Drivers’ Employment

The survey asked respondents to rank the top three reasons why mixer drivers were released from employment. There were 10 choices. Those choices were modified from the Society of Human Resource Management (SHRM) list. The response rate was 88%.

Why Producers Released Mixer Drivers Rank Percent of Respondents Poor performance-work ethic / attitude 1 76% Poor performance-driving 2 64% Poor job attitude-technical 3 35% CDL issues 4 28% Change in company policy or operation 5 17% Illness or injury 6 15% Not listed 7 15% Business slow down 8 12% Only wanted to drive a delivery truck/no other related duties 9 10% Died 10 3%

Why Drivers Quit

NRMCA asked respondents to rank their top three reasons why mixer drivers quit. There were 16 choices with a 92% response rate. All 16 possible answers received a rank of 1, 2 or 3 at least once.

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There was an all over consistency in the top rankings, be it nationally, by region, by cubic yards or by company market type. Compensation packages were clearly the top concerns followed by life/work balance issues. There was also consistency between last year’s and this year’s survey.

Why Mixer Drivers Quit Rank Percent of Total Respondents Better pay 1 53% Seasonality/lack 12 mo work 2 48% Inconsistent daily schedule 3 46% Lack steady 12 mo income 4 43% Don't want weekend work 5 28% Retired 6 26% Quit before issue solved 6 26% Not listed 8 24% Job stress 9 42% Better total package 10 22% CDL issues 11 21% Moved 12 19% Company policies 13 17% Only want to drive a truck 14 16% Don't want night work 15 13% Supervisor issues 16 9% Lack of advancement 17 7% Do not track reasons 18 3% Felt unsafe 19 1% Lack of training 20 0%

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Where Mixer Drivers Go When They Quit

NRMCA asked respondents where their mixers drivers went after they quit. There were nine choices; respondents checked all that applied. Respondents could check more than one answer. Fifty-eight percent track where drivers went after they quit. The response rate was 98%.

42%

34%

31%

24%

22%

21%

7%

3%

3%

Don’t track

Short-haul not RMC

Another producer

Long-haul

Retired

Non-driving job

Quit-no job

School

Other

Where quitting driver go

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Recruitment: Mixer Driver Hiring Analysis

Mixer Driver Vacancy’s Impact on Revenue

When job openings are not filled, the top two impacts on an organization are their reduced ability to serve clients as well as their reduced competitiveness and productivity. Research show that trade skill labor positions are at high risk in part because a lot of people are retiring from the field and fewer young workers want to enter it. This issue is systemic and impacts the financial state of a company. As a result, NRMCA asked survey respondents if they lost business SOLELY because they did not have enough mixer drivers to deliver concrete. 51.4% said yes.

Internal Job Mobility Analysis

Moving a driver to another position creates a job opening. Therefore, the survey asked about such moves. With a 96% response rate, 62% of producers moved mixer drivers internally to another full time job, up 5% from 2014. That is, the driver no longer drove a mixer truck but performed another job, such as batchman, dispatcher, yardman, QC technician, fleet mechanic, materials hauling or sales. The average producer moved 2.7 drivers; the median moved 1 driver. Internal mixer driver job change equated to 2% of the total driver population, approximately 1,500 drivers, moved to another full time job within their company, thereby creating a mixer truck job opening. This is up 0.8% from last year.

2015 Vacancy Rate

SHRM states an organization’s vacancy rate is the result from employee turnover and creation of new positions. It relates the unmet labor demand. It is calculated by the number of vacancies divided by the number of positions on the closing date, in this survey, December 31, 2015.

The survey reported that in the 2015 driver pool of 75,000, there were 5,049 vacancies, a 6.7% vacancy rate. It dropped 2% from the previous year. The average was 11 open mixer driver positions; the median was 5 open mixer driver positions. 28% reported they had no vacancies; last year 15% reported they had no openings. .

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Industry Hiring Challenges

NRMCA asked the survey respondents what were their biggest challenges hiring mixer drivers. The response rate was 100%.

NRMCA then looked to see if there any similarities between recruitment and retention challenges. There are if one sees “lack of experience” (hiring) and “poor performance” (firing) as iterations of one another.

BIGGEST HIRING CHALLENGES WHY DRIVERS ARE RELEASED Lack RMC experience 63% Performance-poor work ethic/attitude 76% Too small hiring pool 48% Performance-driving 64% Do not meet company hiring standards 42% Performance-technical 35% Very competitive local CDL market 33% CDL issues 28% Not meet federal CDL requirements 32% Company policy change 17% Seasonality/not 12 months steady work 32% Illness or injury 15% Too irregular daily work schedule 31% Not listed 15% Do not want to work nights & weekends 25% Business slow down 12% Can't provide consistent mo income 22% Only drive a truck 10% Very competitive local RMC job market 20% Death 3% Issue is retention, not hiring 20%

No interest in RMC 18% Our pay rate not competitive 6% Other 5% Our total hiring pkg is not competitive 4%

63% 48%

42% 33%

32% 32% 31%

25% 22%

20% 20%

18% 6% 5% 4%

Lack RMC experience Too small hiring pool

Do not meet company hiring standards Very competitive local CDL mkt

Not meet federal CDL requirements Seasonality/not 12 months steady work

Too irregular daily work schedule Do not want to work nights & weekends

Can't provide consistent mo income Very competitive local RMC job mkt

Issue is retention, not hiring No interest in RMC

Our pay rate is not competitive Other

Our hiring pkg is not competitive Hiring Challenges

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But the inverse was true when looking at hiring challenges versus how respondents ranked reasons why mixer drivers quit. As with last year, drivers quit for better remuneration and a work life balance. Those factors are not as high on the producers’ list of challenges.

BIGGEST HIRING CHALLENGES WHY DRIVERS QUIT Lack RMC experience 63% Better pay 53% Too small hiring pool 48% Inconsistent schedule 12 mo yr 48% Do not meet company hiring standards 42% Daily schedule differs too much 46% Very competitive local CDL market 33% No steady income 43% Not meet federal CDL requirements 32% Weekend work 28% Seasonality/not 12 months steady work 32% Quit before issue solved 26% Too irregular daily work schedule 31% Retired 26% Do not want to work nights & weekends 25% Not listed 24% Can't provide consistent mo income 22% Job stress 42% Very competitive local RMC job market 20% Better total job package (pay & benefits) 22% Issue is retention, not hiring 20% CDL issues 21% No interest in RMC 18% Moved 19% Our pay rate not competitive 6% Company policies 17% Other 5% Duties beyond driving 16% Our total hiring pkg is not competitive 4% Night work 13%

Supervisor 9%

Lack advancement 7%

Don’t track 3%

Felt unsafe 1%

Lack of training 0%

Industry Recruitment Methods

After understanding the challenges, the survey then sought to see how producers addressed them when recruiting. This survey listed 23 recruitment methods. They were adapted from those commonly used by human resource professionals across all industries, as reported by SHRM. Respondents were asked to check one or more of their most successful methods. There was also a write-in option, “Other”. “Other” responses were: billboards, acquisition, and referrals from customers and from unions.

The average respondent used 3.7 methods. The median was 3. 24% of respondents used more than 5 methods. 14% used just 1 method. No one used two of the recruitment methods, “signs at construction sites” and “signs at bus stops.”

“Employee referral” was the clear front runner with respondents at 71%. Second was social media, at 42%. Last year social media ranked #8 at 19%. SHRM also listed these as #1 and #2. Nationally, 84% of employers use social media.

The question had a 100% response rate.

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Check 1 or more of your most successful recruiting methods for mixer drivers. Percent RANK

Employee referral or word-of-mouth 71% 1 Post on social media (Craig’s List, twitter, FaceBook, online trucking forums, etc.) 42% 2 Post openings on company website 35% 3 Newspaper advertisements 34% 4 Post on internet job banks, job posting boards, and job search engines 29% 5 Post hiring sign at plant gate 28% 6 Company’s own (internal) recruitment/CDL training program 25% 7 Attend or hold job fairs 20% 8 Community college CDL trucking school programs 13% 9 Private CDL trucking school programs 13% 10 Use 3rd party staffing service 12% 11 Radio ads 10% 12 Hiring sign at company home office 9% 13 Recruit at technical schools 9% 14 Other (please specify) 9% 15 State unemployment office referrals 8% 16 Hiring sign on mixer trucks & other company vehicles 4% 17 Military release programs 4% 18 Prison / jail re-training release programs 3% 19 Recruit at high schools 2% 20 Post vacancies at truck stops 1% 21 Hiring sign at construction sites 0% 22 Hiring sign at bus stops and/or on buses 0% 23

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Hiring Analysis

In an effort to understand the industry’s 2015 hiring trend, a series of questions were asked:

• How many mixer drivers were hired? (Response rate 100%) o In 2015, the industry hired 22,000 mixer drivers, 29% of the total driving pool. The year

before, the industry hired 22,000 drivers, then 31% of the mixer driver employment pool.

o The average producer hired 45 drivers; up 12% over 2014. The median hire per producer was 15, up 7.6% from the previous year. The high was 305 drivers; the low was 0 drivers.

• Did you offer a mentoring program beyond the initial onboard training? And if so, how long did it last? (99% response rate)

o 49.6% of producers have a mentoring program. o 60% lasted no more than 3 months.

• Did you hire 18-21 year old drivers? If so, did you without impunity from your insurance

company? (99% response rate) o 33.3% hired 18-21 year old drivers. 43% did with impunity from their insurance

company. 18% did not face impunity; 40% were self-insured.

• What percent of your new hire mixer drivers were new CDLs? (96% response rate) o 81% hired 0%-25% newly licensed CDLs.

• How many mixer drivers do you anticipate hiring in 2016? (Response rate 93%)

o The US projected hire for 2016 is 16,000 drivers. The average producer will hire 35; the median will hire 12.

The 2016 Mixer Driver Recruitment & Retention Survey was conducted under the auspices of NRMCA’s Operations, Environmental and Safety Committee, Human Resource Task Group. It acknowledges and thanks respondents for their time and information.