As other retailers struggle to find truck drivers, Walmart is on a hiring spree

Dive Brief:

Amid a nationwide shortage of truck drivers that is reaching crisis levels, Walmart announced that it hired 1,400 new drivers in 2018, up from 922 in 2017, and is still looking to hire more, according to Yahoo Finance. Walmart made aggressive moves to attract drivers in the last year, including $1,500 referral bonuses, shortened application and onboarding periods and new format hiring events.
A first-year Walmart driver can expect to make $86,000 annually, with possible quarterly bonuses, benefits and up to 21 days of paid vacation. A large pool of drivers is vital to Walmart’s business, which has to move products and freight around the country to service its 4,700 U.S. stores.
“We have a commensurate amount of demand and freight to move," Tracy Rosser, senior vice president of transportation and supply chain at Walmart, told Yahoo Finance. "And so, we've seen a need to grow our private fleet — that, we view as a competitive advantage, from a value perspective. We've been hiring a lot of drivers."

Dive Insight:

America is facing a shortage of truck drivers across industries, and it's causing serious issues for companies. Last year the American Trucking Association announced that there was a need for at least 50,000 truck drivers to fill open jobs, and the shortage is still in full swing as the new year begins. In fact, the ATA anticipates that because of e-commerce, the U.S. will need 175,000 truck drivers by 2026.

A lack of truck drivers is hitting grocers and retailers particularly hard, and that could lead to greater issues like increased food prices. A recent survey found that the grocery industry has a particularly difficult time attracting truck drivers because the job requires long, lonely hours and a lot of time away from home — which, even with increasing salaries, is a tough sell in today’s competitive job market. In addition, most companies require prior experience on the road, which is lacking among potential employees. Finding reliable transportation for goods is essential in catering to evolving consumer demands, but doing so in a way that doesn't cut into profits is becoming increasingly difficult.

With its ongoing growth in grocery and retail sales, Walmart really has no choice but to do whatever it takes to find drivers. The retail giant first disclosed last fall how desperately it needed drivers and shared its plans to entice and retain more truckers. Walmart has one of the lowest turnover rates in the country, ranging from 7 to 12%, according to Yahoo Finance. In hiring new workers and retaining new and existing employees, Walmart is better equipped to meet the increasing demands for product and grocery delivery. And, if other grocers don’t start hiring truck drivers soon, Walmart will be able to offer better order fulfillment and faster service and ultimately beat out other grocers both online and in stores or for pickup.

Another company that is investing heavily in efforts to hire drivers is McLane Food Service, a company that supplies and delivers to grocery stores in Illinois. It has partnered with local community colleges and is offering special training programs to attract new drivers. Few big-name grocers have announced plans to step up their efforts to recruit drivers. Rather, companies such as Kroger, grocery startup Farmstead and even Walmart are turning to tech and investing in driverless delivery pilots. But that only fulfills last-mile issues, while long-distance freight transport will require large trucks for the foreseeable future.

Grocers are going to have to make major efforts to recruit and train more truck drivers in 2019 if they want to maintain solid footing in the grocery wars. In the coming year, companies can be far more creative in how they staff their fleets — such as offering flexible or shared shifts, and part-time as well as full-time roles. They can also consider providing monthly and seasonal bonuses, special training or apprentice programs for new drivers, and perks like educational reimbursement and wellness benefits to support drivers’ well-being when they’re off the clock and recovering from long hours on the road.

Regardless of what moves other retailers make, Walmart has big plans to continue its hiring spree and is becoming one of the most appealing employers for truck drivers — and that should have other grocers on alert.