In a new report which serves an extension to the Driver Require Think Tank’s first document on the critical HGV driver shortage, Driver Require and its ‘Think Tank’ contributors focus on the longer-term issues of the ageing HGV driver workforce and the depletion of the younger HGV driver pool, which could pose a threat to the UK haulage industry.
Driver Require has been tracking the UK’s HGV driver shortage for several years prior to the Covid-19 outbreak, in anticipation of the impact of Brexit and IR35, and then even more closely as the pandemic has progressed. The firm has refined its thinking and conclusions in a series of reports covering the issue and the impact of Covid on the UK haulage industry.
This culminated in the report, titled ‘A Perfect Storm of Elevated Demand and Reduced Supply in the UK Haulage Sector 2021: Investigating HGV Driver Demand and Supply’. To put the report together, Driver Require gathered a panel of sector experts to validate its workings and conclusions through a series of workshops known as the ‘Think Tank’.
This report concluded that the UK haulage sector is currently facing a critical HGV driver shortage. It added that this issue not only needs to be urgently resolved, but also that the long-term trends that would continue to lower the UK HGV driver workforce must be addressed in addition to help alleviate the problem.
The report established a handful of solutions to address the short-term shortage and longer-term retention issues, including increasing the UK’s HGV driver training capacity and throughput; attracting back UK HGV licence-holders who are not currently driving for a career; and possibly looking to government to permit EU HGV drivers to enter the UK for work, acknowledging HGV drivers as a shortage occupation.
Although the report conceded that most of the mitigating actions it recommended would have limited effect in the short-term, it reinforced that these initiatives should be progressed as quickly as possible if they are to have any chance of mitigating the medium to longer-term impact of the shortage crisis. It also determined that, in the interim period, competition over a depleted available HGV driver workforce will force up driver pay rates, initially in the agency market and eventually across the permanent driver pool. This would then lead to an inevitable increase in haulage costs and subsequently rates.
In their latest report, entitled ‘The Answer to the UK’s HGV Driver Shortage’, Driver Require and the Think Tank analysed the composition and dynamics of the UK HGV licence-holder and driver pools, uncovering major concerns around the ageing sector workforce and attrition rates among younger drivers.
The new report reveals that although a steady stream of up to approximately 30,000 new drivers are passing their HGV tests every year, there are 10,000 drivers a year going into retirement and a further 20,000 that are quitting HGV driving as a career choice.
More specifically over the past decade, Driver Require and other sector educators have trained around one fifth of a million HGV drivers under the age of 40, yet the pool of HGV drivers within this age demographic has remained steadfastly at 67,000. In real terms, this equates to roughly 150,000 new HGV drivers under the age of 40 who have passed their test and then gone onto leave the UK HGV driving industry in pursuit of an alternative career.
Driver Require CEO, Kieran Smith, outlines that this equates to a significant level of financial wastage for drivers.
He explains: “Assuming an average price of £3,000 per HGV test pass, this equates to over half a billion pounds invested by drivers over the past decade to pass their HGV test, only to then leave the industry.
“It is shocking that all the good work attracting candidates is squandered by a lack of action to retain these drivers in the HGV workforce after they have passed their HGV test.”
Referring to the annual level of retiring HGV drivers, Smith adds that the sector is facing a net depletion of its workforce by 6,000 drivers per year.
“We have a plug of ageing drivers passing into retirement, resulting in a net depletion of the HGV driver workforce of around 6,000 drivers per annum. Our estimate of the severity of the issue could worsen as we better understand the rate of departure of the EU HGV driver contingent.”
The report emphasises that the HGV driver shortage is a longstanding issue, rather than one that has come about because of the pandemic situation. Indeed, back in July 2016 the House of Commons Transport Select Committee produced a report of its own entitled ‘Skills and Workforce Planning in the Road Haulage Sector’.
In its report, the Committee concluded that:
“The [UK haulage] industry must take a long-term view if it is to meet the challenges posed by likely growth in demand and the effects of the demographic time-bomb, both of which will be felt increasingly over the next 10–15 years. A lack of investment by employers in training, poor terms and conditions, an increasingly pressured and unpleasant work environment, complicated rules and requirements and a growth in alternative careers have all contributed, to varying extents, to the current driver shortage.
“It appears based on current statistics, the industry is not faced with a shortage of licensed and qualified drivers; rather a shortage of those willing to work as drivers. Industry and government have focused principally on recruitment. But the industry is reluctant to take on young, inexperienced drivers because of the costs of training and insurance.
“Both the industry and government have taken steps to address the shortage. None of these are on a scale likely to deliver the number of drivers needed. The road haulage sector, supported by the government, needs to take further steps to:
- Meet any shortage and reduce dependence on foreign drivers [about 60,000 drivers]
- Meet any predicted growth in demand
- Deal with the demographic time-bomb [about 75,000 drivers will retire by 2020]
“The principal responsibility for taking action lies with the industry. Industry seems to expect the government to step in and resolve the problems caused by years of underinvestment. There are a number of issues on which it is right for the government to support the sector. But operators across the country and their trade associations will need to do more to secure a sustainable future for the industry. It is vital that the road haulage sector takes a more strategic approach to planning for future recruitment and retention.
“A great deal has been written about the driver shortage. It is now time for the industry, supported by the government, to take action to secure the future of the UK road haulage sector.”
Commenting on this, Smith says: “Five years after the Transport Committee’s report was released, not a lot has been done to further its recommendations, and we are in very much the same position. As in 2016, we still have a government in power that believes in free market economics and will resist directly intervening in matters such as the HGV driver shortage, preferring to allow economic forces to adjust market conditions until a stable equilibrium is achieved.
“If this is indeed the case, we can expect the government to watch on as the shortage forces up pay rates, initially in the agency sector and subsequently in the permanent workforce, until wages rise to the point where enough non-driving HGV licence holders are attracted back into driving to meet demand. This is inevitable unless the government changes its stance. However, the government and the haulage sector can still take action to accelerate resolution of the shortage and thereby prevent excessive inflation of employment costs, avoiding unnecessary damage and pain. We hope that our report and the output from the Think Tank will achieve this goal.”
In terms of solutions to the HGV driver shortage, the new report suggests that haulage sector operators should now be asking themselves why they should invest a great deal of energy and money into increasing HGV training throughput only to see it wasted as the vast majority of candidates soon leave for other careers, adding that industry operators should redouble efforts on how to fundamentally and significantly improve HGV driver retention to reverse the depletion of the industry workforce.
Discussing the solutions mentioned within the report, Smith says: “We could, as an industry, look to provide funding for haulage operators and HGV Training Schools, or other specially created entities, to nurture newly qualified drivers. This could perhaps be integrated into or associated with the HGV Apprenticeship Programme.
“Further to this, it could be beneficial to bring bodies such as the Road Haulage Association and Logistics UK together in an initiative to identify, document and publicise best practice examples of HGV driver engagement and retention initiatives by haulage client members. Together with their members, these organisations could then actively seek an industry solution on how the sector can offer drivers a better work-life balance while still addressing the needs of their employers and their customers.”
To help alleviate the issue of an ageing sector workforce, the report warned that limitations on the age of HGV drivers would need to be reduced, and so negotiating with insurance providers could also prove helpful.
Smith explains: “We could perhaps introduce post-HGV-Test training or assessments that are designed to give insurers heightened confidence in drivers. This could be similar to the ‘Pass Plus’ scheme that is already in place for those who drive cars.”
Furthermore, Smith believes that dialogue could be initiated between the sector and HGV licence holders who either did not take up HGV driving or gave it up as a career choice, to determine their motivations for leaving and what could encourage them to return to the industry.
He says: “We need to be asking those who have left the sector why they pursued an HGV licence in the first place, what jobs they are doing now and why they left the field. This information will allow the industry to develop targeted initiatives to bring back certain groups of HGV licence holders back into the sector.
“What could also help is that when new and returning HGV drivers do enter the industry, they are paid the first few weeks of income so haulage companies engaging these drivers are subsidised for the time they spend getting them up to standard and developing their commercial driving skills. The cost of CPC training, lost wages and a refresher course for returning HGV licence holders could even be paid through a network of approved HGV driver training schools.”
Smith continues: “Another consideration that our Think Tank raised was to offer bus drivers who hold PSV licences the ability to cheaply and quickly convert their Category D licence into a Category C [rigid HGV] licence. This would provide a quick supply of Category C HGV drivers from the pool of bus drivers and coach drivers who are not gainfully employed due to the drop in use of public transport and foreign holiday coach trips.”
In addition, the report does highlight that the industry could still find some success in lobbying government to declare HGV drivers as a ‘shortage occupation’ but warns that doing so may not prove as effective as originally hoped given that the driver shortage on the continent is itself now worsening to crisis levels.
Smith concludes: “Underlying all the report’s findings and solutions is a need to dramatically improve working conditions for our HGV drivers. Significant investment is needed in Truckstop facilities and roadside services, as well as the provision of secure and well serviced overnight parking facilities.
“We therefore appeal to the various representative bodies, specifically the Road Haulage Association, Logistics UK and the Recruitment and Employment Confederation, to combine forces and work cooperatively to drive forward the chosen initiatives with their haulage operator members and government bodies.”
