Uncovering Hidden Costs:
A Data Strategy to Improve Driver Retention
Mobility Company
Mobility & Transportation
Data Center
Strategy & Planning
We provided a mobility company with a data solution that enabled them to identify a high margin of hidden costs related to driver occupancy.
CHALLENGE
A bus mobility company faced a critical dilemma related to driver retention, as their fleet operated at 85% occupancy. This occupancy level required drivers to work overtime, leading to fatigue and job dissatisfaction.
The discontent among drivers was not only increasing staff turnover but also negatively impacting the company’s reputation as an employer. As retention became more challenging, the costs associated with driver shortages rose significantly, affecting both the company's operations and finances.
In response to this challenge, the company approached us to conduct market research to help them better understand the motivations and needs of their drivers in recruitment, training, and hiring processes, as well as the factors contributing to dissatisfaction and low retention
APPROACH
At this stage, it was clear that the company faced two critical pillars affecting its operations:
Reputation Cost: High driver turnover and widespread dissatisfaction negatively impacted the company's image, making it harder to attract and retain talent.
Attraction Cost: Efforts to attract new drivers involved significant expenses in recruitment, training, licensing, uniforms, etc. which increased operational costs
To address the driver retention challenge, we began with a comprehensive data analysis using the data center we had developed for the company.
We started by gathering data from various sources, combining market research with operational data related to driver compensation and working hours. We used data analysis to calculate the cost per kilometer driven and the financial impact of overtime, which would yield a key result for the company’s operations.
FINDINGS
Our research identified a critical, previously overlooked factor adding millions of pesos annually to operational costs.
Key finding from the data center analysis:
Additional Cost per Kilometer: A 15% premium was paid to drivers for overtime, resulting from insufficient staffing and increased driver work hours.
Reduced Profit Margins: The extra costs from overtime payments reduced the profit per kilometer, significantly impacting the company’s margins.
This insight highlighted the financial impact of driver fatigue and demonstrated how optimizing driver retention could:
Reduce operational costs
Enhance profitability
Improve long-term sustainability
WHAT THE CLIENT SAID
Robert Frankman, Senior Planning Manager, Sigma
nobrainer provided majorly credible and trusted studies to validate our packaging designs. They understand our business and the analysis we need. Their process is more consultative; it is great that we can work collaboratively together.