Owner operators: Employing a segmentation approach to improve retention

Purpose - Owner operators are an important group of truck drivers, yet have been the subject of very little academic research. Specifically, no research has explored retention issues among owner operators. Thus, this paper aims to employ a segmentation approach to owner operator retention, examining important independent variables that include: pay and compensation, top management support, time at home, and safety. Design/methodology/approach - Data were collected from a large truckload (TL) carrier. The drivers surveyed were irregular route long-haul drivers. A total of 239 responses were obtained, for a response rate of 74.6 per cent. Latent class regression (LCR), a technique new to logistics and supply chain management (SCM) research, was utilized for data analysis. Findings - The results show there are four different need-based driver segments, which means that specific driver retention programs must be developed for each segment. Research limitations/implications - The major limitation of this paper is that an attitudinal measure (intent to stay) was used to assess turnover instead of actual behavior. Additionally, only one demographic variable was collected. Implications of this paper include demonstrating the existence of unique segments within the same sample; the specification of the major attitudinal drivers for each segment; and the need to further study a largely neglected but very important group in the supply chain. Practical implications - From a practitioner viewpoint, knowing that different groups of owner operators exist will help in developing programs to improve driver retention. Specific recommended actions for each segment are presented. These results will help managers with the retention of owner operators. Originality/value - Owner operators are an important group when it comes to making the global supply chain function smoothly and efficiently. Yet, little research in logistics and SCM address this group. Driver turnover continues to plague the TL industry and understanding owner operators, and their segments, is critical to improve driver retention, cost structure, and profitability. Also, to determine if segments of this under-researched group exist, LCR was deployed.