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Trucking Company Finds Success With Innovative Pay Model

Trucking Company Finds Success With Innovative Pay Model

After taking over Denis Gray Trucking from his father, trying to recover from the recession, and dealing with a constant turnover of drivers, Michael Gray was "struggling right out of business."

He was accepted to the SBA Emerging Leaders program – a seven-month executive education course for business on the brink of growth – and started making immediate changes to his business.

"We'd been doing business the 'old school' way when you know in your gut whether something is right or wrong with the business," Gray said. "The Emerging Leaders program helped me see what the numbers were telling us, apply it to our gut feeling, and make our decisions from there."

Gray started working for his father's business during his summers as a teenager. He became a driver for the company at age 19, was brought into the office at age 25, and started running the company shortly thereafter.

One of the biggest problems facing his company and most other companies in the industry was driver turnover and difficulty finding reliable drivers. During the sales and marketing module of the program, the point was made to first find the customer's pain, then deliver the solution. This idea stuck with Gray.

He identified drivers' pain in the inconsistency and high fluctuation in pay, which led to unsatisfied and disloyal drivers. So he created and implemented a new pay model more similar to a salary than hourly wage in which his drivers are paid for a week's work regardless if they work that many hours or not.

Following the first quarter of implementing the new program, his driver turnover rate went from 100 percent from the same quarter the year before (the national average is 90 percent) to 14 percent. He's also been able to hire five highly-qualified drivers, something that was difficult in the past.

"It was time for us to think outside of the box. You can't have good customer service with unhappy employees," Gray said. "Our new approach has grabbed a lot of attention in the industry. I've been told I'm crazy and will go broke. But I think it's crucial to have good drivers in our business."

Gray said the SBA Emerging Leaders program also helped him to "scale or fail" when it comes to his business. Since graduating from the program, he's worked with a SCORE counselor and meets weekly with and Small Business Development Center (SBDC) counselor. Thanks to their guidance, Gray has hired three additional office staff, put new accounting and budget practices into place, and expanded his business into specialized loads, which are beginning to produce high profits for the company.

For more information about Denis Gray Trucking, visit www.dgraytrucking.com.

For more information about the SBA Emerging Leaders Initiative, visit www.sba.gov/EmergingLeaders.

For more information about SBA local resources, including SCORE and SBDC counselors, visit www.sba.gov/wa.