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Employee Retention in Last-Mile Delivery: Building Loyalty and Reducing Turnover

Overall employment of delivery truck drivers and driver/sales workers is projected to grow 11% from 2021 to 2031, much faster than the average for all occupations. Employee retention strategies specific to the last-mile delivery sector are more important than ever. 

Why focus on last-mile delivery? The final step of the delivery process requires extreme attention to detail and support from a logistics service provider. It also requires a centralized order system, dispatching, scheduling, optimizing delivery drivers onto specific routes, accurate parcel tracking, and extensive customer notification systems. Additionally, last-mile delivery costs are about as high as 50% of the overall delivery costs, making it the most costly part of the entire process. However, 61% of delivery businesses believe the last mile is the most inefficient part of their supply chain.

RelatedHow to Hire for Hard-to-Fill Delivery Driver Positions | Talroo

A survey of over 1,200 last-mile delivery drivers in 11 countries by Scandit in November of 2022 revealed that, for U.S. workers, work-life balance is a top priority (44%), followed by salary and pay (41%). When choosing an employer, brand reputation and perception were most important for 29% of U.S. delivery drivers, while 26% of workers switched employers because of better environmental and sustainability policies.

How to Build Loyalty and Reduce Turnover in Last-Mile Delivery

In logistics, attracting and retaining top talent is a continuous challenge. The rapid pace, demanding schedules, and evolving industry landscape often make it difficult for companies to have their best employees. However, with the right strategies, logistics companies can create a work environment that attracts skilled professionals and keeps them motivated and engaged for the long haul. 

Here, we’ll outline 10 of the most effective ways for logistics companies to retain their valuable workforce.

1. Invest in Professional Development. 

Offering opportunities for skill enhancement and career growth is a powerful retention tool. Logistics professionals are more likely to stay when they see a clear path for advancement and access to training that keeps them up-to-date with industry trends. You can also ensure that employees gain exposure to different aspects of the business with cross-training and mentoring. Cross-functional experiences can broaden their skill set and enhance job satisfaction.

2. Foster a Positive Work Environment. 

A positive work culture can significantly impact retention. Prioritize open communication, respect for employees’ opinions, and a sense of belonging. Recognize and reward outstanding performance to show employees that their contributions are valued.

3. Embrace Flexibility. 

Logistics jobs often involve irregular hours and unpredictable schedules. The workload can be staggering. When feasible, flexible work arrangements can enhance work-life balance and reduce burnout, contributing to higher employee satisfaction.

4. Competitive Compensation Packages. 

Offer competitive salary and benefits packages that reflect the demands of the logistics industry. Regularly review compensation to ensure it aligns with industry standards and adequately rewards employees for their hard work.

5. Provide Opportunities for Advancement. 

Implement clear career progression paths within the company. When employees see potential for growth and advancement, they are more likely to commit to the organization for the long term. Communicating those opportunities and potential career moves can help retain drivers.

6. Offer Employee Wellness Programs. 

The demanding nature of logistics work can take a toll on physical and mental well-being. Introduce wellness programs that promote healthy habits and provide resources for managing stress and maintaining overall health.

7. Recognition and Appreciation. 

Regularly recognize and appreciate employees’ efforts. A simple “thank you,” or public acknowledgment of a job well done can go a long way in boosting morale and fostering a sense of loyalty. Celebrate employees’ milestones such as work anniversaries, achievements, and project successes. These celebrations create a sense of belonging and make employees feel appreciated.

8. Listen to Feedback.

Create channels for employees to share their feedback, concerns, and suggestions. Taking action based on their input demonstrates that their voices are heard and valued.

9. Build Strong Leadership. 

Effective leadership plays a critical role in employee retention. Train and empower managers to support their teams, provide guidance, and create an environment of trust and collaboration.

10. Align with Company Values. 

Ensure that your company’s values are not just statements but are reflected in day-to-day operations. Employees identifying with the company’s values are more likely to remain committed.

In the competitive logistics industry, retaining top talent requires a comprehensive approach that addresses employees’ needs and aspirations. By investing in professional development, creating a positive work environment, and offering competitive compensation, logistics companies can build a loyal and dedicated workforce contributing to their long-term success. Remember, the investment in employee retention is an investment in your logistics business’s future growth and stability.

Want more on hiring in logistics? Check out our Logistics & Fulfillment Hiring Playbook for Successful Supply Chain Hiring.