Management Changes in the Purchase Process
When you purchase new routes, you may purchase routes with a manager already in place. You are probably excited about the experience this manager will bring to the table!
On occasion, however, existing managers choose to leave their position when a sale is in process. They may have stayed only to help out the previous owner or they may be looking for new work with someone they already know. Whatever the reason for their departure, it can add stress to the transition.
When purchasing a FedEx operation, you should always be prepared to have your manager give notice. Your manager will not be contractually obligated to you, so it is important to secure a window of support from the seller in case you lose your manager.
If this happens, you —or someone you trust—needs to be willing to step into that role for a few weeks, learn about what you need in a manager, and then take the time to hire a new one.
Though you may never face this challenge, it is important to have a contingency plan for your first weeks of operating.
Absentee Structures
To be a truly absentee owner, you have to have several layers of contingency plans in place. You would need a good manager, perhaps an assistant manager depending on the size, and part time drivers in place. If multiple drivers call out, you would have to make sure you have enough people in place to fill those spots.
Recruiting Great Managers
If you are looking to hire a new manager for your FedEx business, we suggest looking within your current operation first. Promoting an assistant manager, mechanic, or driver is a great way to ensure your new manager will be familiar with the operation from Day 1.
Moreover, a selection from among the team shows other team members that yours is a culture with opportunity and advancement potential. This feeling creates more loyalty in your employees.
You can also recruit with traditional online sources such as Indeed, Monster Jobs, Craigslist, and ZipRecruiter. You want to get a job posting in front of as many candidates as possible! Be sure to look for mechanical knowledge, logistics experience, and/or truck dispatch in their work history. We always tell owners that one of your first questions to a potential manager should be, “are you a halfway decent mechanic?” Managers who can help with the basics—oil changes, tire rotations, and wiper replacements—save you a lot of money overall.
With the scope of our operations, we’ve spent our fair share of time on job boards. And we have some pro tips to offer our consulting clients. If you’re interested in our insider tips to recruit more effectively, reach out for our consulting services.
You will want to use caution when you’re interviewing managers who work with existing FedEx businesses. You do not want to poach a manager from another contractor, specifically another contractor from within your terminal (because that's just not a good way to make friends!).
It happens from time to time that you do want to hire someone who is currently with another FedEx operation. In these cases we recommend working out a gentlemen's agreement with the other owner, giving them plenty of notice or waiting until they can fill the exiting manager’s position.
Retaining Great Managers
As with drivers, you should work hard to retain your manager. Keeping your team in tact is one way you can increase your business efficiency and, in turn, your profit.
It's also important to be honest and clear with your manager about your expectations for their role from the beginning.
In specific, you want to be clear about when they may be expected to drive for the operations and how often you expect this to occur. Your pay structure for the role should reflect these expectations. You manager needs a clear idea of how much they are expected to drive at their current salary. Additionally, they need to know how they will be compensated if they have to drive more than expected.
We also recommend offering an array of manager incentives as one method of retention.
Payroll Goal Incentive
Offer the manager a bonus for staying within his weekly payroll allocation consistently.
For example, if your business has 10 daily routes and the drivers make $600/week on average, your weekly payroll is $6,000. Allow an additional 5% for the manager to use during training and turnovers. This makes for a weekly payroll allocation of $6,300.
Let your manager know that If he/she maintains payroll at that level every week of the month, he/she will receive a $500 monthly bonus. Be sure to limit the amount your manager can drive in the operation if you implement a bonus like this! You want them managing, not driving to save on payroll.
Repair/Maintenance Incentive
If you’re willing to share books and records with your manager you can offer him/her a bonus for maintaining a total repair and maintenance number that is 15% (or less) of your total revenue.
Make the timeframe longer on this incentive to encourage preventative maintenance as well. You don’t want your manager cutting corners to save on the budget.
Linehaul Manager Incentives
The best bonuses for linehaul managers are ones that reward him/her for not declining runs or freight within a certain period of time. You want him/her to maximize your operations.
Need More Help?
We know recruiting and retaining drivers is hard work. We have experience across the United States managing a fleet of over 250 trucks and a staff of over 200 drivers. This challenge is real for us, too.
If you need help talking through your staffing issues, we’re here to help. Connect with us and we can work one-on-one with you as you navigate these challenges.
