Motorcoach

Motorcoach Roundtable: Focused on Driver Shortage, Long-Term Business Growth

Posted on October 3, 2017 by Alex Roman - Also by this author

METRO talked to motorcoach operators from around the nation to discuss some of their biggest challenges, as well as what they plan on doing to grow their businesses in the long run. For the most part, we found that identifying qualified drivers is still an issue, and so we asked our operators what they are doing to combat the issue.

John Busskohl
CEO, Silverado Stages Inc.
Phoenix

What is your operation’s biggest challenge?
The biggest challenge we face is having enough qualified motorcoach operators. In today’s world, you have to have folks that are really excellent, not only from a safety perspective, which is number one, but also from a customer service perspective. Those people are really hard to find, especially when you need as many people as we need. It’s just a constant challenge. If you don’t focus on it and put up with some unsafe behaviors, or people who are delivering sub-par customer service, because you need bodies, that effects everything.

How are you handling this challenge?
The way people look for jobs now and make decisions on where they are going to work has changed with the advent of the internet and social media. We have had to change how we go about getting applicants. It’s a funnel. If you need 25 drivers, you probably need 300 or more applicants to find those 25 that are going to become the real stars. You have to generate a lot of applicants, and then, how you screen them and bring them in into your organization has to be well thought-out and structured, so that you do end up with the best people in the end. There are some pretty interesting things you can do now with tech and social media to generate applicants, and we were generating a lot for a while, but we weren’t seeing the flow we had hoped for.

Recently, we streamlined our application process to limit the amount of information we ask for to pretty much a phone number. We then have dedicated staff that calls every applicant back as quickly as we can, which has really worked well for us. People don’t want to have to put in too much effort, they would rather you did all the effort, and really, we have to make that effort. By making those phone calls, we were able to capture people on a greater scale and were able to feed that funnel better than we were before. It was a real ‘a-ha’ moment.

The other thing we have done is increase pay. The industry has to do a better job of recognizing the need for a career wage for motorcoach operators. If you look at it, wages have been on the decline since the 80s when the industry was deregulated. It is a tough business. It is hard to make a profit and driver wage is a huge expense for us, so we are always careful about how we manage that. On the flip side, if we want to have the best people and retain them than you have to pay them something they can live off. We have pushed very hard to be on the top end of the pay scale in the markets we serve, if we possibly can. Drivers are the most important people in your company. They are the only people the customers see when they are on the coach from our company, so that person has to be the best.

Since joining the company a couple of years ago, what have you brought to the table?
The culture of putting the driver first — that is really the culture I’m pushing. Also, it’s a 24/7 business and it can really be a grind sometimes, but we also like to have fun. We are respectful to each other and professional, but we also have a good time. Work doesn’t have to be drudgery. We have nine different locations, but we are pretty tight knit. We talk often, and during meetings we will recognize birthdays, anniversaries, and employees who provide excellent service. We really try to create a family atmosphere as much as possible. That has always worked for me. It’s a people business all the way through. You have to like people, enjoy being around them, and socialize and build relationships. It’s a very important part of a culture that I have always tried to foster wherever I have worked.

Where do you see your operation in five years?
We have grown fairly quickly in the last few years, mainly through acquisitions. We are still digesting and finishing our strategy for bringing those companies together under one brand, which is Silverado Stages, and everything that goes with that. We are pretty close to being finished doing that, then we will have to see where we go next. There’s some consolidation going on, regionally, and we keep our eyes out for anything that is going on, but we are not aggressively looking to continue to grow.
We are an ESOP company, with the employees currently owning about 14% of the business right now. We need to continue to push that and move more of the ownership of the business to the employees to help our owners Jim and Sharon Galusha execute their strategy, which is to leave the business to employees since they don’t have any heirs. We are not on any self-imposed deadline and remain on a steady pace. So in the next five years, I anticipate that we will be able to continue to grow. We might do some smaller acquisitions here or there, if that makes sense, and just continue to try to focus on trying to shift the ownership over to the employees over the next five years as best we can, which is based on profits that we can generate through the business. In five years, hopefully, we will have more than half the company owned by the employees.

Dennis Streif
VP, Vandalia Bus Lines Inc.
Caseyville, Ill.

How bad is the driver shortage right now?
The employee/driver force is decaying every year. Having a varying schedule in lieu of a fixed schedule, makes our ability to retain employees more challenging. The motorcoach industry workforce that used to be available to us as a second income, in which they would possibly receive a pension from an earlier career, is swiftly dwindling. The driver shortage is certainly impacting our operation, as well as many other operators across the country. I’d be surprised if any company could say that they have a line of people at the door waiting to get hired.

What have you done to attract/retain drivers?
We have all the things like pension plans, medical insurance, bonus plans, uniforms, flexible schedules — these are the things that most all companies are providing these days. We are either a leader or equal to in this industry as far as pay goes. Over the last several years, we have had to elevate our beginning pay to try to attract more people, which also required us to increase our pay across the board to all current drivers. I don’t know if pay is the actual issue for all people as much as it is scheduling times, though.

How important is it to be involved in both local and national associations?
It is very important to network with fellow operators in your areas, as well as across the country. You never know when you may need to reach out to for assistance and/or provide assistance to a good operator. Also, while each operator has some similarities, each of them also has something unique to share with one another, whether it’s how to deal with a maintenance-related issue, safety/insurance, purchasing, marketing, technology, or sales, the knowledge shared is invaluable.

VP Dennis Streif says Vandalia successfully sells based solely on its reputation.
VP Dennis Streif says Vandalia successfully sells based solely on its reputation.

What is key to maintaining customers while continuing growth?
Our growth has primarily been through increase in rate and volume at low utilization times. Our rate increase, I believe, is a direct correlation to doing the best job you can, which results in your customers not minding paying a little more to get a better quality of service. We have customers that are a good distance away from us that could use other operators, but they continue to want to use us. We are OK with that because we get our full rates.

How are you able to sell to customers that are primarily worried about price?
Honestly, we don’t get a lot of pushback from people on rates. We do a little bit, but it is so insignificant that it’s not where we feel like we have to sell ourselves on our service or our safety rating compared to company X, Y, or Z.

Michelle Petelicki
President, Panorama Tours
Clifton, N.J.

What challenges are you facing at your operation, which might be unique to your region?
One of the big things is that the traffic conditions in the areas we serve, including New York City and Washington, D.C., have gotten really tough, which is wreaking havoc on our driver’s Hours of Service. It’s something that, obviously, the customer or our operation can’t control, and it makes it really difficult to plan out our days. You want to take out a group for a nice day, everything seems to be perfect, and you are doing it in less than 400 miles, yet you are three-quarters of the way through the trip and the driver can’t complete the trip because of traffic. That is both difficult and very frustrating. Where before it was a once in a while issue, it is now becoming a daily issue. So, I think that’s one of the biggest things we are contending with, because it’s out of our hands and impacts everything.

Do you think it has gotten worse because of Amtrak work being performed over the summer?
I would love to say it is just temporary, but this escalation has been going on and on, since before the Amtrak thing happened, so it leads me to believe that there is more to this than just an anomaly.

How has the driver shortage impacted your operation?
For us, not so much. The only reason I can say that is because we have a pretty consistent flow of drivers coming in, and I am never in a position where I feel like I am hijacked to keep an underperforming driver on staff. I don’t know if it’s a pay and benefits thing, which is certainly very possible. We do pay very well and provide benefits that a lot of companies around us can’t provide, such as medical benefits and 401Ks, and we are able to do that for our drivers. So, perhaps that may have something to do with it.

Was it a recent decision to raise pay and provide more benefits?
We did raise our pay scale, and we are also working right now on some additional benefits that are not necessarily monetary, such as life insurance for our drivers. Also, one of the big things with charter drivers, more so than line-run drivers, is the ability to manage their money. When it’s really busy, their paychecks are very large, but in the winter, or when business dips, their paychecks are so low that they have a problem supporting themselves. Beginning this spring, we are going to start working with a financial manager, so that drivers can learn how to better manage their money and save throughout the year for when business is a little slower.

How did the idea come about?
We get very creative with our drivers during the downtimes. We will bring them into the shop and teach them some maintenance stuff, have them clean, and we do a lot of training in the winter time when it’s slow, so we get creative with ways for them to earn money. That being said, business still dips in the winter. I recently had a driver in my office, and this was probably the seventh time this has happened over a period of months, and they were talking to me about how great business was, but how worried they were for November when business dipped. So, I thought to myself that we need to find a way to fix this for them. When you look at what they make annually, they do well, it’s just a matter of that management piece that they just can’t seem to grasp, so that’s where the idea was generated. Like I said, we are going to launch the program this spring, so that our drivers can really take advantage of the program.

Where do you see your operation in five years?
That is a good question, and it is something we have analyzed and re-analyzed like 18 times in the last six months, because we have had so much change and experienced a lot of growth over the last year. I would say that I need to stabilize a bit before my next round of growth, so that is my plan moving into next year. As we know, plans don’t always play out, but I would like to pick up a little bit more in the contract line work area. Amtrak is not able to do it all. New Jersey Transit is not able to do it all. And, I think that, perhaps, if we can get a little more resourceful and come up with some out-of-the-box ideas, maybe we can find a way to get some of these cars off the road and be able to move these people a little more efficiently though and to their destinations. So, maybe a line-run business, but not the typical kind. I would really like to come up with something that is a little more beneficial and not as overplayed.

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