Driving Plus is one of the fastest growing driver recruitment agencies in the UK, having acquired the Milestone business in September last year and being part of the Staffline Group that is on course for a £1bn turnover in the next two years.
MD Mark Underwood gives MT a brief lesson on the short but fast-paced history of Driving Plus.
“We started in driving recruitment only four years ago,” he explains. “The parent Staffline Group is 30 years old, and it worked for clients in the blue collar sector up until 2002 when it was floated on the AIM stock exchange.
“At that time, it was still a relatively small, regional recruitment business and had grown to £120m sales. It had a fairly aggressive growth strategy to treble in size which it did over four years. Now the target is to grow from £350m to £1bn and, in our last financial year, we were on track at £700m.”
The launch of Driving Plus in 2012 was part of that aggressive growth plan, and it now recruits, trains and manages flexible HGV driver workforces at 40 locations including the major supermarkets, 3PLs and the automotive sector. During peak periods it places over 3,500 drivers from a pool of more than 15,000.
Staffline also launched People Plus which helps the long term unemployed get back into work under a series of government-funded training and work skills programmes,
“To bridge the gap across the group between the unemployed and our end customer base, we have formed and grown and developed a skills business that provides various types of skills training to equip people with employability skills to support them back into employment,” says Underwood. “The challenge for us is to connect everything together as a group.”
Public funding
It is ironic that despite the driver shortage and government funding for reskilling of the unemployed, public money is not available to train HGV drivers.
“You can't achieve funding directly for the license acquisition because that's the lion's share of the cost attributed to it,” confirms Underwood. “That being said, we have an apprenticeship which we're delivering in driving goods vehicles, where we have some funding, but it's not directly apportioned to the license acquisition part of it.”
The government’s recent proposed Apprenticeship Levy is certainly concentrating minds among employers at the moment.
Under current plans, all employers with a payroll of over £2m would pay an additional tax to create a training fund. They can however reclaim all or part of the levy to spend on approved apprenticeships. “Our skills businesses are flat out now seeing customers consulting and helping them on how they spend that to their advantage to produce skills and apprenticeships right throughout their organisation,” explains Underwood. “So part of that for us will obviously be looking at training HGV drivers for some of our key clients.”
Although Driving Plus is a relative newcomer to HGV driver recruitment, it’s started out with a big advantage.
“Staffline was the number one provider of blue collar temporary labour, such as warehouse staff and, the clients that they were on-site with were the major supermarkets, the big retailers, the largest third party logistics providers and the automotive sector,” says Underwood. “My view is the best way to negate the impact of driver shortages is to work with the most prestigious transport companies and Staffline were already on-site with people who are deemed to be potentially the most valuable partners.”
“We replicated the blue collar success by adopting an on-site model. One of the ways we directly addressed driver shortages is that my team who were on-site with, let's say Tesco, would be dedicated to delivering a solution to that one distribution centre.”
“It's been very successful and we've turned down several sales opportunities. Although we retain an appetite for growth, we have been careful to ensure we grow at a rate that provides our clients with a service that is reliable and delivers, so that means being quite selective about the opportunities we take and who we work with.”
Opportunity
As part of the Staffline Group with a background in providing warehouse staff should give Driving Plus a significant opportunity to recruit HGV drivers, but this isn’t as easy as it sounds.
“All of our apprenticeships are coming through the route of people having completed one or two years service within the warehouse environment,” says Underwood. “But where the change is coming now is that if you're two or three years into a warehouse contract, you're normally a top picker or certainly at the threshold where you're receiving bonuses, because most of the distributors now incentivise based on productivity.”
“So they're at the top end of the warehouse pay-banding, while driving rates have stagnated and if they have crept forward it's only been in the last 12 months or so. During the recession, they probably went backwards in some places. So the gap now between top level order picker in the warehouse and a job as a driver is less attractive.”
“We go out to sites, some of which have got 600 warehouse operatives on them, offering people the chance to become a driver. It's a 12 month warehouse-to-wheels programme and we'll get 15 or 20 applicants of interest out of 500 or 600. Initially when we did it, we thought it would be really attractive, but the feedback we get is the gap between the pay isn't huge and in the warehouse environment they get more used to doing a Monday to Friday fixed shift pattern, whereas a lot of the driving jobs aren't fixed start times or involve weekend working and that's not overly attractive.”
The Driver CPC came into force in 2014, causing “unprecedented driver shortages” in the summer of that year according to Underwood.
“Of the 20 or so years I've been working in the industry, there's never been a summer quite like that, in that the industry had sleepwalked into what we knew was a looming driver shortage,” he says. “The Driver CPC, combined with a really nice summer, meant the most unprecedented driver shortages that the industry has ever seen and the agency marketplace couldn't respond. We haven't seen times like it since.”
Summer drought
Nevertheless, Underwood says summers are now getting even tougher than the pre-Christmas peak to find enough drivers to go around. He estimates that the driver shortage in summer could reach 48,000.
“The summer now is far harder for us to deliver than the retail peak period,” he says. “The majority of retailers and supermarkets are getting much better at handling the traditional Christmas retail peak period.
“They now plan a combination of block-booking agency resource and complimenting it with some tactical haulage, whereas summer is very much about wake up in the morning, look at your smartphone and see what the weather forecast is going to be for that day. You're responding on the day you're on so it's very difficult to make plans.”
One impact of this has been that some fleet operators are having to accept a higher percentage of agency drivers than before.
“We've got some customers where their strategy is clearly documented as 80% full time, 20% agency. Whether they ever get to 80% permanent headcount is questionable. Another customer’s strategy is 60/40 but I would say they too struggle to get to 60% permanent headcount, so we're getting to close to 50/50 in some operations.”
Although Driving Plus has seen the proportion of Eastern European drivers on its roster increase in recent years, Underwood confirmed the company does not recruit abroad.
“We don't actively do that, but being fairly late into the market, our competitors have already completed that migration part. We look to work with drivers who are based here currently and usually that's been successful.”
“We've made a number of key strategic acquisitions to ensure that we've achieved national coverage, and that's helped with driver availability as drivers can work for us anywhere in the country once they're registered. It has also increased the length of service for the average contract to over 11 months.”
“The Milestone acquisition for us was a key one for a number of reasons but mainly because of its geography in that we were very strong in the South West, the Midlands and across the east of the UK. Milestone's head office and main operations were based in the South East and they have a very strong presence with some key customers in the North. Putting it all together has taken nine months however, it feels like one business now.”
Staying put
Unlike some agencies, drivers working for Driving Plus go on the payroll from day one and the company encourages drivers to stay on one site rather than move around.
“The longer they work at a site for us, the better,” says Underwood. “The whole principle of being on-site with the customer is that we build them a workforce that's flexible for them and that involves as fewer face changes as possible. Customers have a flexible team that compliments their permanent team and, at the same time, is consistent and reliable.
“We offer assignments for PAYE workers on day one so they're entitled to holiday pay from the first day they start working with us. We also offer assignments for limited company contractors who probably represent the lion's share of the market. “
“One of the beauties of being on-site with the customers is that we can offer progressively more added value services, so we're also delivering things like training based on their telematics score to make them the safest and most economic drivers.”
This enables clients to identify and attract the best agency as well as full time drivers.
“We've got a customer that's recently implemented an incentive scheme based on their telematics scores,” confirms Underwood. “If the driver scores above a benchmark then they get an extra 50p or £1 per hour.”
Agency and full time rates now on a par
Underwood is adamant that the rise of agency labour has not kept the lid on driver wages, though he concedes pay rates for drivers have not generally increased in recent years despite the talk of driver shortages.
“In actual fact, probably the take home pay for the two is broadly similar and we've have some clients where, depending on the hours worked, the agency driver potentially earns more,” he says. “We've have other clients whose principle is they will be equally rewarded.”
“The shortage only occurs for three months of the year - July and August, weather dependent, and December. There are very few months where there's an equal, comfortable balance between supply and demand, there still tends to be a number of months where more shifts could be filled and we would encourage more shifts to comfortably allocate all of our resource. “
“In a peak week and a quieter week in a month we would have a similar number of drivers working, the difference being is that over a fortnight they would work four shifts one week, five shifts the next and on a week where we're flat out, everybody's doing five and six.”
