View from the Edge

What driver meetings really cost: Adding up all the hidden expenses

In this issue, CarriersEdge co-founder Mark Murrell looks at all the different things that need to happen to pull off a driver meeting and adds up the associated costs.

Not too long ago, while putting together the content for a webinar calculating the ROI for different types of training, I went through the exercise of figuring out what it costs to schedule and run a typical driver meeting.

What I discovered surprised me enough that I didn't believe it at first.

However, after delivering that webinar a couple of times, and talking to other people about it, I haven't found anyone who disputes my numbers, and in fact, several people have told me I'm too conservative. That just underscored the fact that there are lots of indirect and hidden costs that come up when running a driver meeting, so it's important to be aware of them and plan accordingly.

The exercise started with the recognition that things aren't “free” just because they're done by internal staff. Many times people think that if they're not paying an outside entity for something, then it's not costing them anything. That, of course, is flawed logic, since those internal resources are costing the company money as well, and if you're not making the best use of their time then you're not getting the value you're paying for.

Recognizing all that, let's look at how I calculated the driver meeting costs and see what it came out to.

For the purposes of this exercise, I'm using a Saturday morning driver meeting, like those commonly held by fleets all across North America when they want to convey information to their drivers.

Assumptions

I used a few assumptions as a starting point:

  • Internal safety staff organize, prepare, and deliver the meeting content
  • Ops does their best to schedule drivers in for the meeting, to maximize attendance
  • The meeting is delivered in-house, so there are no venue costs
  • Drivers are not paid to attend the meeting, but catering is provided
  • Safety and Ops staff have an average annual salary of $60,000 (looking at various job postings across the industry, in different regions, this seemed to be pretty much in the middle)
  • Other overhead costs (things like benefits, office, resources, support staff) add an extra 100% to the salary. HR sites say that overhead can be anywhere from 50-125% of salary, and since trucking is pretty low margin, with lots of outside costs, I used a number towards the higher end.

The Calculations

To turn all those assumptions into some actual numbers, I applied them to a fleet with 50 drivers, and included costs for 1 safety manager and 2 dispatchers.

Cost of Staff Time
Using the numbers above, a $60,000 annually salary plus another 100% for overhead gives us a total annual cost of $120,000 for each full time employee. Divided by the number of days that someone typically works in a year, it came out to just under $500/day. That's the number I used to calculate the cost of staff time.

Safety Staff
Safety and compliance managers told me they would easily spend 1 - 1.5 days organizing the event and preparing the content. Add in another half day to actually deliver the meeting and time spent chasing down the people who don't show (there are always a few, and that can easily add up to 7 or 8 hours). 1.5 days to prep, 0.5 days to deliver, 1 day to follow up with no shows.
Total cost: 3 days x $500 = $1500

Operations
Trying to reschedule loads so that 50 drivers (or as close to that as possible) are back for the meeting can easily mean an hour or two for each dispatcher for a couple of weeks before the event. After the event, there are inevitable hiccups as well, so that can be another couple of hours each. (Some fleets said they spend a lot more than that because of what they haul, but I'm using a low end consensus number here.) That's about 4 hours before the event, and another 2 hours after, or 6 hours total x 2 dispatchers. With an 8 hr. day, that 12 hrs. means 1.5 days.
Total cost: 1.5 days x $500 = $750

Drivers
The last thing is the cost for the drivers. They're not getting paid, but they invariably get fed - breakfast, coffee break, lunch usually. Even at a low end of cost of $15/head, it still adds up.
Total cost: $15 x 50 people (expected attendance) = $750

$1500 (safety) + $750 (Ops) + $750 (catering) = $3000.

So, for a fleet of 50 drivers, the total cost to the business for one meeting is $3000.

Of course, if you pay drivers to attend, get lower attendance, or have a large enough fleet that you need to rent an outside venue, the costs will be even higher. But even at $3000 for one meeting it struck me as pretty pricey - online training for a whole year costs about the same as that one driver meeting.

The difference is that many people consider those staff costs as sunk costs - they're spending the money anyway, so if you have internal people do it then there's no added cost.

Yes, that's true, but if people are spending their time organizing and delivering a meeting, what aren't they doing instead? Is that really the best use of time for dispatch - tearing their hair out trying to schedule people in for a meeting? Wouldn't their time be better spent improving the overall efficiency of the fleet's operational processes? Wouldn't safety staff be better utilized doing one-on-one training with just the people who need it?

Looking at it that way, the real cost isn't the money allocated to the meeting but the opportunity costs for the company. If staff didn't have to spend time on the driver meeting, what else could they be doing to make the business more efficient, and more profitable in the long run?

View from the Edge is a bi-monthly review of best practices in risk management, driver development, and technology for the trucking industry, produced by CarriersEdge.

CarriersEdge provides interactive online driver training for the North American trucking industry. A comprehensive library of safety and compliance courses is supplemented with extensive content creation and customization options, full featured survey tools, detailed management reports, and the industry's first dedicated mobile app for driver training.

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