Ep. 1 - Labor & Freight Economics with Ron Hetrick

1/29/2024

48:37

Aaron Craddock

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Welcome to the launch of the Hire Truckers Podcast! Ron Hetrick gives his breakdown of the current state of the labor market in trucking and freight economics for 2024

Transcript

Welcome to the HireTruckers Podcast, where we interview experts in driver recruiting. We provide industry insights, marketing trends, and motivation to help you level up your recruiting game.

Hello, this is Aaron Craddock with the Hire Truckers podcast. And today we have Ron Hetrick on.

Aaron Craddock

So Ron is the vice president of staffing strategy and senior labor economist. He has a master's degree in economics over three decades of experience. His quotes are regularly seen on Forbes, Wall Street Journal, US News and World Report, as well as other major media outlets. And he is also author of articles on the labor economy, including the demographic drought.

which we'll talk some about today, and then also who is going to do the work. And when we chatted last week, he was talking about how he's done six keynotes in six weeks. So the labor economy is a hot topic right now. And I'm hearing weekly from different fleet executives or almost daily just about, hey, what's happening in Q4, what's happening in Q1. And so we're really excited to add value to you guys today.

with Ron on our show. And so thank you for coming on today, Ron.

Ron Hetrick

Sure, it's great to be here. Thanks for having me.

Aaron Craddock

And so we'll start with.

Aaron Craddock

You've been working on a study in the transportation industry and warehousing that you're going to put out or put out recently with light cast. Can you can you kind of just walk us through some of what we talked about last week, but just what you're seeing right now in Q4 and Q1.

Ron Hetrick

Yeah. So actually that did come out and it wasn't just on transportation and warehousing, but we're really kind of looking at this entire retail sector. And it's just been nonstop. We've gone through 14 months, or no, it's actually 20 months of rate increases by the Fed and probably 14, 18 months of economists going recession, recession. I've never been one of those. I've never believed we were going to have one. I still don't believe we're going to have one. And so as we've been going through this, trying to figure out what's happening.

You know, what floor is going to fall out? So we kind of looked at this article. It's really just kind of like a blogger, an informative blog that we were trying to do, uh, topical for this kind of holiday season. And what we wanted to do was look at, you know, the retail space because, you know, we all kind of remember how insane everything got right. Originally, uh, we all ordered everything. We couldn't get anything cause no one was really making anything. Well, then we got it and it stacked up in the warehouses. And that's really what. Hurt a lot of things is we had a lot of.

inventory sitting in warehouses. Truckers were still being used at the time because they were moving these things over to the stores. Well, they got to the stores and then demand started going way down in that industry. And what's been interesting though, is the signals are starting to change a little bit. Amazon came out with like a 200, 250,000 expectation that they wanted to hire. UPS had a really large number as well that they wanted to hire for the holiday season. And this is pretty...

This is pretty different than last year. And what's interesting is I've seen some in the media say, well, their hiring expectations are, are not as bright. And I'm like, look, I actually know what they tried to do last year, which Amazon was like a hundred thousand. So there's like doubling that number this year. To me, that sent a signal that if they need these people, then they're, they're moving product. So a couple of things you can look at. Now we didn't talk about this in the report because we didn't want it to goof, get a little too economic geeky here.

But this is kind of my jam. So what I would say is, if we look at advanced retail sales, they're in the stratosphere. Any news you hear about retail sales not doing well, it's not based on any data. It may be based on some anecdotes and things like that, but advanced retail sales are still doing incredibly strong. You know, inflation has been coming into line. People are now, you know, able to more afford these goods probably than they could, you know, over the past year.

Ron Hetrick

So that's one thing. And then we look at new orders. So when we look at new orders, we have to strip out things like aircraft or tanks, you know, large things. And when we look at that, that just hit an all time historical high last month. So we are still buying things and then we're still doing orders. Unfilled orders of manufacturing are up just enormously. So the orders are coming in and they're still struggling to fill these orders. Well, once they fill those orders, they're gonna need to ship those orders and replenish the inventory. I feel like all of this

is happening. All of this is kind of taking shape right now. So you've had some people say, well, next year, next year is when this recession is going to come. Now we're moving into next year. And I can't strongly say this enough. No, it's still, we have almost 10 million job openings in this country, which we were never really able to fill. Had we filled them? Yes. But you have all these jobs, pretty much, we still have a sub 4% unemployment rate. Those are consumers. They're buying things.

Products are moving. It's not that they're not moving. The inventory to sales ratio is historically speaking, incredibly low, which means even though inventories look high, they're moving those inventories. So this is kind of the backdrop. That's a long answer, but it's a backdrop of which, all this negativity is being painted out there with no data to support it. So I'm here to kind of myth bust a little bit and maybe give some people some hope. Yeah.

Aaron Craddock

Yeah, I love that. Can you dive a little bit and that lines up with what I'm hearing from fleets and what they're seeing as well. And so specifically, I saw you put out a couple posts around you know, furniture purchases and clothing. What showed up there that was a little bit surprising or not surprising going into this retail season?

Ron Hetrick

You know, what's interesting is in 2020, everybody's kind of locked in their homes and we give them an enormous amount of money that we had never ever seen, a government outlay of $2 trillion. And people couldn't go anywhere, so they bought a lot of goods. And so, you know, you're buying new appliances, you're doing all of these things, furniture, all of this, and that happens. Well, you're not gonna go out and buy those things all again. You know, once you have an appliance, hopefully it lasts a-

a little while, mine haven't, which is why I guess I'm part of these things as well. But you're looking at this now and you go, there was this initial burst and then there was a backlog because we couldn't fill those orders. So it kind of went into 21. And you really saw this kind of demand peeking out at that time. Well, it's funny as you have a lull that started to occur last year and of course in the first part of this year, but what we're seeing now is after these lines were trending down, so things that you would buy for yourself. In the third quarter.

when GDP took a huge spike upward, that was being driven by consumer spending. Another thing that you would say, well, if you're going to recession, you're not gonna see burst in consumer spending, you're gonna see the opposite. But what I thought was curious and what I posted about was what people were buying. So you're starting to buy those self-indulgent products again, new furniture, clothing, these are things that you probably had or bought.

And now you're doing it again. And so what was really interesting about the furniture number is we know we're not selling a lot of houses right now. Housing inventory is insanely low. Homes are very expensive. Interest rates are high. So we're not moving a lot of houses. So to see people buying furniture means that they're just refurnishing their own places. Well, that's a bit of an indulgence spend. And that's the kind of stuff you actually wanna see going into the holidays. Cause that tells you that the signals are out or that people are comfortable.

spending on indulgences for themselves. And that usually allows for the goods to keep going through the cycle and be replenished again.

Aaron Craddock

Yeah, it's so funny. We talked about that last week and then we got our new couches yesterday that we ordered. It's just one of those things we had put it off. And then I also just finally bought some new clothes and I think it's just getting comfortable with, and again, it's consumer sentiment, like where are things going? Like I honestly don't think they're going majorly lower or that we're going to have a major crash. Again, just what I'm seeing in transportation and

Aaron Craddock

also don't think they're gonna go sky high, like you're saying. And so that makes my wife and I comfortable buying the couches we've been putting off for forever. So it's just so funny.

Ron Hetrick

When people are making money, this is another one of these things. We have a really low unemployment rate. We'll be talking about the demographic drought and kind of those situations that are going on. But one of the things that a lot of people miss, a lot of economists miss, especially financial economists who love to call for recessions and be wrong all the time, is that you cannot remove, if I'm making money, if I'm employed, very few, we don't save very well.

So people, when they're making money, tend to spend money. And we have a lot more people making money now with this low unemployment rate and payroll jobs going up, another million and five over the past year. That's a million five more consumers. You only have 1.6 million people on unemployment. So that's historically an extremely low number of people collecting unemployment, which means people have money. Yes, their credit card debt is starting to increase. Yes, their savings are starting to go down.

but we're spending money. And that spend of money is what's driving, drives your entire industry. We need to see product moving. What you look for is if the product's moving, it does send a signal that people are comfortable, like I was saying before.

Aaron Craddock

Yeah. So that was another question I was going to ask is what are you seeing with. Credit card rates. And is that, should that be alarming? And then also with, with savings, with personal savings, like you can even walk from 2020 to now.

Ron Hetrick

Yeah, so what happened, you know, a second, a little while ago, in this time after the pandemic, we started cutting people checks, which we'd never done before. And it wasn't that we were just cutting checks, like we cut checks to everyone, people who had jobs, people who were doing completely fine, were starting to get checks, like on a regular basis. And I was one of those people and I was like, why are you giving me money? I don't even need this right now. And you could, and what it was doing is they were trying to keep everything kind of moving along. But

It was a horrible combination because what it was is you were creating a lot of demand, but there was no one generating supply. You look at the labor force at the time, labor force participation had absolutely plummeted. So what it did is that kind of caused this massive inflation spike that we had because you have a lot of people trying to buy and very few people making things. So during this time, because there was a lot of money and you couldn't travel, you weren't going out to eat, maybe you were doing, DoorDash was still kind of exploding during this time.

But you have people who were really kind of, I have money and now I'm getting more. And so I started saving that and it really ballooned up accounts. I mean, this was as of June, Bank of America's chief financial analyst said that on average, people still had 30% more in their accounts than they had prior to the pandemic. Yes, the number was coming down, but they still had way more than they had prior. So we started watching this excess savings number, which really did get crazy.

But it has been nose diving as this year goes on, and it's almost back to equilibrium right now. And as that's happening, as that savings number's going down, you are seeing credit card debt kind of going, working its way back to its trend line. But this is something I posted about recently, it's not back to its trend line. Like a lot of people wanna sit there and go, hey, this is record high credit card debt. Well, because you have 7 million more people in this country than you had in 2020, you're going to have more debt. It's debt per person that we're watching.

And if we can tell that number is not to the level, it is because that credit card debt is not back to its trend line. And I know a lot of people would say, well, that's true, we don't want it going to its trend line. You don't want people in credit debt. True, you don't. We would love it if that wasn't the case. But the reality is that is kind of the way we do look at things and say, is money moving? Are people spending money? So they're draining savings, so clearly they're spending. They are running up credit card debt. Some people will say, well, that's because, you know, their rents have gone up.

Ron Hetrick

Absolutely, that is something that happens as well. But I think all of these things kind of feed into money's moving. And we wanna see money moving to show us that consumers aren't necessarily, you know, afraid of doing certain things, which is why I started this whole thing with advanced retail sales are still in record territory. New orders are still in record territory. Yes, you can say that rents are higher. Yes, you can say that mortgages may be higher.

But that doesn't take away from the fact that we can clearly see people are spending these, the money that they have on goods, as well as other necessities of life.

Aaron Craddock

Yeah. So if I'm a transportation executive, a CEO of a company that moves, let's say, for hire freight, and I've kind of put a pause on recruiting efforts and maybe had to cut some of my recruiting team, had to cut some of my recruiting marketing spend, should I be making budgeting decisions to get ahead of that?

Aaron Craddock

potential increased in OTR truck driver demand or local truck driver demand? Like, should I be making those bets now? Like, those are the type of questions I'm getting from these executives.

Ron Hetrick

Yeah. I feel like, despite everything I've been saying, I feel like we are still in kind of a, I wouldn't move too quickly just yet. Yes, we're seeing this domain kind of increase. We are seeing advanced retail sales say hi. Well, they've been high over the past six months and so, and yet while that's been happening, we haven't had enormous demand. In fact, we've been watching our postings for...

for heavy truck drivers going down. In fact, in October took a huge hit. Now that may be because people are nervous, but I don't hear anybody saying, well, I feel overstaffed. We know that there's been some financial issues in the industry. I think that there's still reason to take a pause right now. What I think is gonna be very interesting, and this was something I just was looking at this morning, I have been following for the past years, so really been focusing on the private equity and venture capital market. So these...

Pretty cool, don't spend a lot of time with that. These are the large funds, these are the large companies that invest in businesses to basically start something new or to merge things together. And what they're doing is they look for sectors that they go, hey, we could probably do something here. There's money to be had, we feel good about this sector. And I just read this morning, the sectors that they're looking at right now aren't IT or bio, they're actually looking at manufacturing. There's a feeling that...

there's something about to happen that this is an industry that's kind of ripe for some innovation. They think if we can merge some things together. So the money is starting to go into these places. So there is definitely optimism about that sector. Industrial production has held really solid. I told you unfilled orders are still sitting at insane highs. And so with that in mind, you know that industry is really not feeling pain. They've navigated this whole past year through all of these interest rate increases.

Manufacturers have done incredibly well. And I think that this is, going into next year, I don't see, I made a post recently, it's like if the recession happens, or if something goes down, a floor has to fall out. And something I've been pointing out is, if we look at real GDP, so if we take into account inflation, real GDP has not been at its growth line for three, four years now, which means we're still under producing.

Ron Hetrick

So you can't really recess from where you're, you've already recessed, you're already not producing to your full capacity. Now, some people would, you know, kind of look at this and go, well, a recession is like you're going down into negative. And I'm like, but in a sense, what we've been getting is not as positive as we should be getting. This all is, this all relates. You know, so if I'm sitting there going, do I hire? You know, how do I feel about the future? You know, how do I feel about this purchasing season?

the holidays because I'm hearing a lot of negative news out there. Yeah, we all hear this negative news. It's almost always not based on any data, but we hear the negative news. I always tell people, when you hear of negative news about the economy, if you hear predictions of recessions or we're going to destroy this economy, always look to see who's saying it because there's a motivation there. Financial economists, those in banks, anybody involved in

doing loans and everything, cannot stand interest rate increases because it really hurts their returns. The bank economists are the ones who have been saying recession for 14 to 18 months now because they're trying to create a sentiment that goes against what we're doing, what Chairman Powell's doing in raising interest rates. They're trying to make it feel like society's coming apart, but it absolutely is not coming apart. It's actually doing really, really well. Historically speaking, and this I might have to point out,

literally almost every time I put a post up on LinkedIn, historically speaking, we're killing it. This is uncharted waters for us. We are absolutely soaring as an economy. Is it like it was in 21, 22? No, thank goodness. That was insane. You don't want that. It causes so much inflation when demand gets that out of whack to supply. We don't want that. We want things to cool off, but we want it to cool off kind of slowly. That's called a soft landing.

and we're kind of hitting that soft landing. And so there's a point where people start to call the bluff and say, you know what, I feel good now. And you look, we're getting orders and I gotta get people in here. We gotta make these things. And that's why I feel like these people who are calling now for recession next year, they're saying it's because the housing market's gonna come apart. But the housing prices are still 27% overvalued. So even if they came down, all that would do would create an entirely new

Ron Hetrick

boost in housing sales, which would cause a lot of new products to be sold. And it caused a lot of people would be moving in and all of the economy starts to move on that front. So this is, you know, I think the long and short of it is, I would say hold for just hold for a bit until we can kind of get a feel for how the holiday season's playing out. But if these inventories continue to clear out, if we get another good quarter in consumer spending, there's no reason that we should expect a drop off.

going into next year. And those people who've been sitting on the sidelines, the private equity firms, the venture capital firms who've not been buying anything for a year and a half may start to come back in the market and be like, look, I think we can ride this out. I don't think these interest rates are gonna do anything. And at that point, I think you'll start to see things, start to get hot again, but I would just hold a little bit on that.

Aaron Craddock

Mm-hmm. Yeah, what we're seeing on the, like as far as like marketing ROI, which I think, I think you might find fascinating. So it's the lowest like lead cost. So if you're putting dollars into Google, putting dollars into Facebook that we've seen in a long time, and the lowest marketing cost per hire. You know, we saw a huge run up after COVID because again, demand for these same pool.

increased and there's a heavy marketing spend in this space. And so what we're seeing right now with most of the fleets we work with is they're holding steady, which a lot of times they'll cut in Q4, but they're not cutting as much. So lead costs are still low. So I don't think you can say that people have all jumped back in and are ramping things up yet, but that's kind of what we're seeing is a holding pattern with marketing dollars and maybe even an uptick.

but not a major uptick that's driven cost up on cost per hire yet. But that's kind of what fleets are debating is like, do we lower, like do we keep spend as is, or do we take advantage of these cheap hires now or when do we, and that's kind of the big question. And I see some fleets taking advantage of it because they have the dollars and they would rather do it now than when things ramp up and then.

Aaron Craddock

you see others not doing that. And so, yeah, that's just kind of the dynamic that we're seeing on the marketing side. So that jives with everything you're saying.

Ron Hetrick

Actually, I wanted.

So the paper that we just put out, we were talking about holiday hiring. And the point being, for a company that's like, hey, we're gonna ramp up for the holidays, there's still no supply. And this is something that's blowing people's minds. So if I go into some of these markets and I look at things like warehousing postings, they're straight down, straight down. As they're going straight down, the pay rates are going straight up. So you go, wait a minute, wait, that doesn't make any sense. You just said...

There's a lot less companies that want to hire this right now. Why are the pay rates going up? Because there's still no supply. The way with the U S has been boosting supply in about the past year or so is immigration. So we've added about a two and a half million immigrants. It's 60% of our growth in our labor force in about the past two years. Well, this, those immigrants were really going into certain industries, food processing, construction, things like that. So.

What you have is a situation where a lot of the people that you would typically hire, they're still not here. We don't have them. And so, if you read who's gonna do the work, which is a short article that I co-wrote at the end of last year, it is an insanely sobering piece that will probably scare you to death about the fact that two thirds of our high school graduates are getting college degrees, and the number actually goes up after a couple of years after that. But yet our economy is run by people

have a four-year degree. That's actually how you eat. That's actually how you get things moved around in this country. And we don't have those people. And so what's happening are people sitting there saying, well, we haven't been hiring, so I should be able to pay less. I should be able to do better than I was. And the reality is that's not true. The supply is still incredibly low. I said earlier, unemployment claims are insanely low. We're talking the same kind of numbers that we saw in 1970.

Ron Hetrick

Like you're talking about the population was 100, 200 million smaller than it is now, but we have the same number of people who are claiming unemployment. These are, this is a very different time that we live in. At the end of this article that we just did, the one we were talking about earlier, there are four things that we said at the end of like, why is supply hurting? And you just mentioned one of these things. So first one is hoarding. So employers fought really hard to get people in the past two years.

especially people that were worth the darn. People that you were like, hey, I'd like to employ this person. They actually maybe could pass the drug screen. So what happened is after they got this, people didn't wanna let them go. So they're like, hey, look, we're getting fluctuations in orders, but I'll be darn if I'm gonna let these people go because then I'm gonna have to try to get them back and they're probably gonna be gone. And we can tell that they are gone. Like when they lose those jobs, they're finding other work. As restaurants keep paying more, I mean, fast food's $16, $20 an hour,

There is a lot of competitors looking for the same person that we really don't have anymore. So there's this hoarding problem. The other thing is if we go back for all of these years prior to the pandemic, in like retail trade, they every month would let go about 200,000 people. They were just, it's basically you ramp up and then you let people go. Excuse me, and that was an average around 200. That number is way lower than that right now. And last month it was 137,000. They were letting way few people.

go now than they have been in the past. Once again, they haven't been able to hire everybody what they want, and they don't want to let everybody go because then you're like, well, now the holiday's here. I need them back. And they're like, where'd everybody go? They're not here. And this is, speaking to your earlier point about, well, when do you hire? Well, you don't wait for everything to be hot before you hire, but you need enough of a signal to go, this is a smart move or else you could be like ramping up in a, as things are heading another direction.

But it is going to be a sobering reminder for people to be like, well, our industry's really not doing well. It's kind of like egocentrism or ethnocentrism when you kind of see the world through your own eyes and you can't see it through anybody else's. A lot of people when they look at the economy, look at it through their industry's eyes. And it's like, if their industry is not doing well, well then the economy is not doing well. And that's absolutely not true. There are so many industries that are still doing quite well. There are industries that aren't.

Ron Hetrick

But the important thing is that you look at the total, and that's what you see in the GDP report. You see that people are spending, you see that corporations are still making money. I saw something, Barron said yesterday that there were three consecutive quarters of corporate profit declines. That's absolutely not true. In fact, that number went up last quarter. So I don't know where people get some of this information from, but the data is actually showing that companies are doing really well as of this year, corporate profits still way above trend.

So no eminent signs of collapse or anything like that. But yeah, your mileage may vary.

Aaron Craddock

Yeah. One of the, one of the things I'm seeing fleets do that's interesting, like, as you speak about hoarding talent, it made me think about it. So what they're doing is that some, some of the, what I view is smarter fleets being through a few of these cycles are they're building a wait list of drivers. And so they may be investing a little bit more in marketing right now than they necessarily need to, like they're like, Hey, I don't have empty trucks. But they're building a wait list of.

you know, the best drivers that have more experience so that when it comes back, they're able, able to, to bring those on. And I'm finding that like the fleets that have been able to weather the decrease in spot rates better because they maybe have less debt and, you know, are just more equipped to act more strategically rather than just being driven by the numbers there.

building that wait list so that they, you know, will be able to ramp. And so it's not that they're necessarily bringing them on right now, but they're keeping as many drivers as they can and keeping them as busy as they can. Cause they make more money when they're moving the freight and then they are. Um, as I said, they're, they're building that pipeline. Um, and, and so it'll be interesting just, I've seen in each of these cycles, haven't been through four. And I know you.

been through more being an economist for over 30 years, that like in these swings, different fleets pick up market share. And so that's, it'll be interesting coming out of this, like who goes from 800 trucks to 1600 trucks, like who gets those bigger contracts. Because at some point, it's going to be crazy competitive again, even in that space, like particularly for OTR truck drivers and owner operators.

as freight rates go back up and I mean, when it goes up, you can't find those people. Would you say there's still, it's not at that less than $35 an hour price point, like these OTR drivers make a little bit more, would you say there still is a truck driver shortage? Or isn't?

Ron Hetrick

I would say so right now. I don't feel that way. And I think the reason being is that all of your kind of independent drivers are kind of sitting on the silence right now because the rates, they can't get the rates that they want. I mean, I have some friends who have told me like, look, I'm doing something else until these rates can pick back up again, because it's not worth me to take the truck out at that point. And I think as long as you have a lot of people sitting things out, you can't have a shortage because they're sitting it out.

waiting for something to happen. Could you have a shortage of people who are willing to make a certain price point? Well, yeah, but is that a shortage or is that just the market clearing price isn't correct? And I think I get a little bit, it's kind of like a pet peeve of mine is when people are like, well, there's a skill shortage. And I'm like, so you're saying, is there a people shortage or is it a skill shortage? Well, there's not enough people with the skills that I need. And I'm like, then train them. Like, that's not a shortage. Like that's you being.

picky in particular, like you could always invest in people and train them and give them the skillsets that you need. That's kind of how society worked until like 1975, 1980, when we finally had so many people that, you just could ask for anything you want. We called it a ready-made employee. I want them to have all of these things. Well, in a market with tons of workers, you can get that, but we don't have tons of workers now. And I think the same thing here is sometimes people say like, well, you just can't find anybody. I'm like, well, you can't find anybody?

or you can't find anybody at just price point. Did you try the different price points and see if that attracted different people? And I think that we gotta be really careful. Yes, unemployment is historically still very low. It's not as low as it was. A couple of months ago, we hit an all time low at 3.4. I think we're around 3839 right now. That's still really low and in some markets are very, very tight. But shortages is a complicated kind of terminology to use. I think we get a little

sloppy with it sometimes. I think there are some people out there. I will say that, well, I can't stress this enough. If you are a lousy place to work, if the conditions which people are in aren't that great, you're not being chosen. They have choices. I can't get the data now because the people who produced it don't make it right now, which is driving me nuts.

Ron Hetrick

But back in 2019, we saw a really big outflow of men from manufacturing and construction to things like retail trade and restaurants. And if you go back to that time, Amazon starts being reclassified into retail trade and they're paying $20. And you got people working in manufacturing and assemblers for $11. So even before things ramped up in 2020, Amazon was still paying 15, 16. I mean, when you're making...

you know, $11 an hour, that's a phenomenal increase in pay for a company that has a great brand. So all of these people in this market are like, well, now we have a shortage. And I'm like, well, there's a shortage of people willing to make that level of money. So it's the market changing. If you can match that, you can. If you can't, you can't. But it's, I feel like that's kind of the situation right now. I definitely feel like this is probably as good of a trucking supply as we've had.

in past four or five years, maybe longer.

Aaron Craddock

Mm-hmm. Yeah. The other, the other pain point that fleets have are on the diesel mechanic, is on the diesel mechanic side. Yeah. But I, but it made me think about, as you were talking through that, that's. A training thing and equipping thing and a rate thing. So it's not, I mean, it, again, the semantics of shortage, there are fewer that are trained than can fill the roles now.

Ron Hetrick

Oh yeah, now that's a problem.

Ron Hetrick

Yep, 100%.

Aaron Craddock

but do you train them? Do you invest in that? Do you continue to increase pay? And then can that change?

Ron Hetrick

That's a great, great question. So who's going to do the work was about this topic. So we interviewed 1500 high school students and we asked them about their intentions once they got out. And obviously the large majority like, I wanna go get a four year degree. And we said, well, why wouldn't you pursue skilled trades? You know, why wouldn't you do things that you can do like in a community college or a skilled trade school? And, you know, about half of them are like, well, physically it's hard. Like, I always have a joke when I speak of, you know, these are people are like, well, that's hard as they're on their way to the CrossFit gym.

You know, like, you know, you could get paid to work out. It's called a job, but yeah, that's what, we'll put that to the side for now. It's like, that was that part. And then there's like, people are like, well, I just want to be in a desk or whatever. Like you see these reasons that young people have, but they've really migrated away. Right now in the U.S. economy, the unemployment rate for people who are installed maintenance repairs. So maintenance technicians, mechanics and things like that.

Aaron Craddock

Yeah.

Ron Hetrick

They have a lower unemployment rate than IT. So you've been hearing for decades, STEM shortage, STEM shortage, science, technical and math. We don't have it, engineering and math. We don't have these people. Everybody should go to college. Go learn computer programming, go become an engineer. No, we're actually quite fine. Remote changed the game. It's now a global game. These people are falling out of trees all over the place. Like we can get those people. What you can't get is an in-person person to come and fix your air conditioning or to fix your truck.

or to fix your plane, aircraft mechanics, shortages. These positions are the ones that people aren't going to. And so it does become a factor of, well, what do you do at that point? Because like a friend of mine, his son got out of high school and he was like, college isn't for me. And he went and became a diesel mechanic. And believe me, the day he graduated, he was long gone. I mean, he said he got a job in blazing fast speed. And I'm like, of course he did.

because there aren't very many of these people out there right now. His son wanted to do that. How do we make people want to do it? Well, I think one thing we have to do is tell them, it's not as awful as you think it is. You can get paid really, really well quickly. In fact, once you get past that entry level stage, you can certify your way up to a really great pay level. And I think at that point you go, well, what is their responsibility? What should companies be subsidizing? And that's for companies to decide.

You know, a lot of people will be like, well, I don't want to invest in because if I do, then they're gonna, they're gonna quit. They're gonna go somewhere else. And I'm like, well, then you have another problem. And that is your work environment. Because if the second you get somebody trained, they leave. That tells me something more about you. Because I worked in a company, the last were people that I hired didn't have, you know, backgrounds in labor economics. I trained them in that part. I just wanted people that were motivated. And I'm like, I can give them that they all stayed. I mean, I didn't lose people. They stayed because they love the work.

Ron Hetrick

I invested in them and they felt like they were a part of something, you know, important after I left, they did leave. But I would say that that's a part that we, you know, there's, when you invest in people, especially Gen Z. When you mentor them, when you like, look, I'm going to, I'm going to invest in you. I see you doing this. Like, I think you could be really great at this. They'll stay, you know, way more than you think. When you saw this job switching that was just going on in the past two years, it wasn't Z's.

Those were millennials, these were mid-career people who were unsatisfied in their job jumping around, but we weren't seeing in the younger people. So there's still a lot to be said. I know some people probably listen to this and go, I just don't believe that, but you should, because it is definitely something that we see overwhelmingly in the data. People saying like, I wanna know that what I do makes a difference. Well, mechanics make a difference. Things were broken and they fix them. It's a satisfying job when you make things better for other people.

There's so many jobs out there in the white collar space that don't have that kind of gratification. If you're an accountant or somebody just doing certain jobs that you just sit there and like, what did I do today? Like some of these IT jobs, I'm sure they go home and they're like, I just sat and broke code for forever. And I don't even know if the company's gonna use the application. It's like, I say in who's gonna do the work that the biggest problem that I see in skilled trades is it's a marketing problem. They...

These are not people who went to school and took marketing, got marketing degrees. They don't know how to sell what they do to young people. So obviously it's unsexy because we spent three decades telling young people college is the only route. And so you're fighting an uphill battle against a society that's kind of been telling people not to do that, which means you gotta step up your game and be like, people have been telling you to make this kind of money, you've gotta go into phenomenal college debt to get these degrees.

By the way, if you start with me at 18, 19 years old, you're gonna be making the same money as an accountant makes by the time you're 22, 23. You're not gonna have any college debt. And by the time you're 30, you can probably be naming your hours. Like, I wanna do this. You may have your own shop by then. It's like, you're gonna be in control of your life. We are not telling people the truth about these kinds of jobs, and it's really hurting us. But we have to step that part of the game up. And I tell people, it's not about going to high schools. Cause a lot of people are like, well, let's get into high schools and tell them about these jobs.

Ron Hetrick

You got to get these kids to your site. Get them on the job. Show them what you're doing. Like, people will go to things that they understand more than something that's kind of nebulous, something that they really can't, you know, draw a good picture of in their mind. You know, that's why internships are so phenomenal because you know, if you're an apprentice or an intern, you're working alongside somebody who's really good and they're investing in you and you're like, look, I don't know about the other jobs I've been offered, but I know about this job.

I know the environment, I like that person who's been mentoring me, yeah, I'll go there. And I think that's one of the things we've got to have to keep improving on.

Aaron Craddock

Yeah. So it sounds like fleets can invest in mentorship programs and just in people. I think there's all this buzz around, you know, AI and technology and things like that. It only helps to the extent that you're really investing in people as humans. Like you can leverage the technology, but you're going to, you're going to get burned if you don't actually focus on the person doing the job and investing in them. So I think.

Ron Hetrick

Definitely.

Ron Hetrick

Yeah. Correct.

Aaron Craddock

I think investing in internship programs, that's a good takeaway of some of what you just said. And then, yeah, I just love the people and culture component because that's one thing we're big on with my companies is investing in people. Even if it's a vision outside of our organization, let's help them get there. They may come back, they may not, but they're going to refer people. We don't...

Like we don't need to be scared of investing in talent that they might leave because if you invest in talent in the right way You're gonna have higher retention than anyone else and that's one of the like the biggest cost knowing that Like turnover rate on average has been you know around the hundred percent range and in freight over the past few years and Yeah, like invest in your people invest in your drivers. Like if you're investing in technology do it in a way

Ron Hetrick

Great. That's all right.

Aaron Craddock

that really helps them. And then mentorship, it has to be that human touch. It can't be purely automation. Like they need to be talking in person to a dispatcher when they have a pain point. And then, yeah, on the mechanic side, I think internship, sharing the vision. And I'd never heard it put that way of just, it's a marketing problem. Like that.

Ron Hetrick

Mm-hmm.

Aaron Craddock

that filling some of these skilled trade positions is the college narrative of everybody needs to go and get a degree. But that's not necessarily the case. You have people with four-year degrees and master's degrees working in some of these service sectors that they could have just gone straight into, like in restaurants and retail, rather than hocking up all this debt. Or they could go into

Aaron Craddock

and get with a company with a great culture that'll invest in them and has a good internship program. And that's just an incredible opportunity. I don't even know, I'll help my kids with whatever direction they want to go. I have young boys. But we will have that talk. Is it worth $100,000 in college debt at the time? When you can go get in a skilled trade and make $100,000 a year or

go drive a truck, make $100,000 a year in a short period of time. And so, and there's an increase in, you don't just have to be on the road two years because logistics has improved. You have a lot more home daily routes, home every two or three days. You've just seen a big industry change there where it's not as much OTR. It's a little short dedicated routes and getting you home more often. And so,

So everybody's kind of adapted to those preferences. And so it's not the same thing it was where everybody's out four weeks at a time and doesn't see their family. So it's just very much a changing industry and dynamic. Well, I really appreciate those questions around industry insights. And one of the things I wanna make sure we do before we get off is talk a little bit about Lightcast and the data that you guys can provide for fleet executives.

to know some of what you just rattled off the top of your head. I know one thing they can do is follow you on LinkedIn and read your posts that I get so much value from. But what else can they do in partnering with Whitecast, fleet executives specifically?

Ron Hetrick

Yeah, Lightcast is a labor data company. And what we do is we're basically, we talk about all kinds of things like where people live that have the skillsets that I want, you know, where should I be hiring, but we're monitoring things like posting trends. So you can kind of see, as I was talking about earlier, I'm looking at almost real time posting trends in, you know, heavy truck drivers, you can break it down by the different, you know, CDLs. You can do all kinds of things around that.

You can see who's hiring, you can see what your competition's hiring, you can see where they're hiring. Um, we have career pathways. So you can actually see like, well, if somebody is a, you know, currently a heavy truck driver, what, what was the jobs that they had prior to that? So if I want to kind of go and mine from that, where do I lose people too? So a career pathway may, they did this in the middle, then they went to this afterwards. You know, where do companies we, uh, called a game drain report where you can actually see. Well, for this company, where did they usually get people from? You may not even know that for yourself, but we know.

And then you can see where do you lose people too. So there's tons and tons of different ways that people use this data. We actually work with one of the largest trucking companies in the country. I've already been to their headquarters and spoken once. I've been asked to come back again, I think next year. But this is the fascination with what is our long-term plan for hiring? What's our model? Are we in a good position for where we wanna be in the future? The big thing that I, the reason you should say

the six keynotes in six weeks, it's now been seven in about eight weeks, but I shut it down for the year. But the reason why I'm out there all the time talking is that people, I think went through a period where they're like, I'm gonna wait this out. And then they realized that it wasn't changing. And so they start to get scared. And then I come in and tell them, this is as easy as it's going to get. What's heading to by 2027, 2030 is going to be monumentally

more tougher than it is right now. Cause you're gonna have a very bloated dependent boomer population who's out of the labor force on a very skinny population that's taking care of them. And this is unprecedented. We're gonna have more older people than kids in this country by 2034 for the first time in US history. So these are the beginning of your pains. I keep, I use this analogy, the hurricane, I live in Florida, the outer bands, it's raining and it's breezy.

Ron Hetrick

The hurricane's coming. We don't, we're not guessing. You know it. It's right there. It's coming right at us. And so what we're trying to get people to understand is you need to make decisions today about how you're going to do things in the future. And like what you were talking about, how do you make jobs more attractive? Well, more local routes. That's a great thing. You're thinking of how can we make this job? If this becomes a hyper competitive situation, how do we do that?

How do we do a better job maybe getting immigrants in here? What's our training program? How do we invest in talent and keep talent? These things that you're starting to do now are going to get so, so much more critical in the years that are coming. That's what we do. We kind of help you to at least go, well, this is where I need to start. This is kind of what I'm dealing with. This is where people come from, but so many different ways that you can engage. We have tools for all things. So we literally have large data sets.

that you can get through Snowflake or APIs. If you have a lot of data people in your company, where you can just take this stuff and ingest it straight into your environment all the way down to really simple to use reports and tools that just kind of break down. Well, this is the market I'm in. This is what I'm looking for. You know, what should I be expecting to pay right now? Cause we keep that number of advertising salary. We're updating that every day. What are the trends been? You can actually see your hiring trends.

over time for really specific skill sets. A lot of times you can't see that stuff, but we can tell you how many of these are out there. We can tell you who's hiring. So much data there. All different price points for people. So, highly encourage it. It's lightcast, L-I-G-H-T-C-A-S-T dot I-O, not dot com dot I-O, lightcast dot I-O is our website. And hopefully people check it out.

Aaron Craddock

That's great. And then if people are wanting to follow you and, you know, see some of these posts you're putting out frequently on social media, where should, where should they follow you Ron?

Ron Hetrick

Yeah, LinkedIn is where I do everything. I used to do Twitter, but yuck. I like the conversations on LinkedIn a lot better. So I am Ron L. as in Larry Hetrick, Ron L. Hetrick. That is how you find me on LinkedIn. If you are sitting there and you see any more Ron Hetrick's because I think there's another one, I think I'm wearing glasses in my profile pic. But yeah, Ron L. Hetrick, H-E-T-R-I-C-K is the end of that.

name and I do encourage people if you find this kind of data interesting and everything follow me I'm not out to sell anything. I'm just out there Dropping truth as I as I can see it in the market. There's so much misinformation out there I do everything I can to sort through that and tell you as honestly as I can what I see happening and It's been a big deal for a lot of people. I had a guy tell me recently at a conference He goes, I don't listen the news anymore

because I don't trust anything anybody says he goes, but I follow you and I'm like, well, that's a huge responsibility on me and I appreciate it, but I do my very best to be honest about what I'm seeing out there.

Aaron Craddock

Yeah, and that's actually, you know, one of the reasons I reached out to you is one of our core values in my company's is radical honesty. And, you know, when somebody disagrees with you on LinkedIn, like you'll just talk it out right there. And it's okay to have disagreements, but you just, I love how flatly you're just like, well, here's the data. And then it's almost like mic drop. And so everybody, if you're not.

Ron Hetrick

Yep. That's right.

Ron Hetrick

I've had people delete their comments after I do that. Cause I'll be like, well, I mean, I know that it couldn't appear that way, but here's actually the trend. Then I go back and I'm like, dang, that was a really good reply. I didn't know they were gonna, cause when they delete their comment, then I lose my response. I'm like, that was a good response. It was good for other people to see that.

Aaron Craddock

Yeah.

Aaron Craddock

We had that happen last week. Yeah. We had that happen last week when we were looking through your posts and you're like, oh yeah, let's look at this housing post. I think it was in the comment had been deleted. That was such a good thread. So, uh, well, Ron, I really appreciate your time. Thank you for coming on the show today. Again, this is Aaron Craddock with the higher truckers podcast. We hope you have a great week.

Thank you for joining us today. Our goal with the HireTruckers Podcast is to provide industry insights, marketing trends, and motivation to level up your recruiting game. If we added value, take a few seconds to share this with your network. Have a great week!