Will Driver Pay Incentives Bring Needed Changes to the Trucking Industry?

Posted July 9, 2018 by Administrator in Transportation | 0 comments

Some motor carrier fleets claim they have implemented dramatic changes to their compensation packages. But adding monetary incentives is not a unique idea. Granted, pay increases attract new, younger drivers and help to retain seasoned workers at a time when the need for drivers is skyrocketing throughout the trucking industry.

Many fleet professionals believe that a higher rate of pay is critical in order to solve the driver crisis. Furthermore, performance bonuses help to ensure quality of service and provide drivers with a reward for exemplary service.

A stronger economy, coupled with regulatory changes, is helping to drive the increased demand for higher wages. Drivers are leaving the profession at a rate faster than they can be replaced. Baby boomers are reaching retirement age and younger people in the workforce tend to have far more career options than the baby-boomer generation had.

The flow of drivers out of the industry and lack of enough drivers entering the profession has created a situation where drivers are in a position to demand better pay and better working conditions. Drivers want more than a pay-per-mile increase; they want total compensation and benefit packages that include sign-on bonuses.

These days, bonuses for the following are becoming increasingly popular as recruitment tools:

  • Safety
  • Miles driven
  • Tenure
  • Minimum weekly rates
  • Layover and vacation pay.

Drivers must deal with a great deal of stress while on the road, often due to increased regulations, shipper and receiver delays as well as tighter schedule demands.

However, while fleet owners understand the pressure placed on drivers, and appreciate that drivers deserve higher rates of pay, other factors, such as stagnant freight rates, has forced the industry as a whole to keep driver compensation static.

Rising freight rates are helping fleets make up the difference between escalating wage increases and budgetary constraints. As demand for motor carrier drivers continues to expand, some companies have become so frustrated they are reducing their workforce and lowering their productivity levels.

Drivers cite a myriad of issues that are placing barriers to recruiting new workers, including:

  • Paying drivers on a per mile or per-hour basis instead of salary
  • Failing lines of communication with fleet management and owners
  • Lack of sleep
  • Time away from home
  • Unpredictable miles
  • Ineffective administration
  • Spending time looking for trailers
  • Being detained for long load and unload periods of time
  • Poorly-set appointments
  • Lack of respect for their work.

Individual fleets need to look at their own workforce and find out why their drivers are not being retained. Generally, the highest turnover rate is in the first few months following a hire. Fleets suffer because the onboarding process is expensive. In order to help reduce a high rate of turnover in the first few months, make sure you target and attract the right potential employees. Increasing wages may help to attract new drivers, but they won’t stay if they can’t handle the lifestyle and frustrations of the job.

Fleets need to think about what it takes to attract millennials. Many will demand longer vacation times as well as earning a fair living wage despite clocking in fewer hours. There is still much work to be done to improve the market for attracting and retaining qualified, high-performing younger drivers.

Cline Wood is more than just an insurance agency. We tailor insurance and risk products and services that improve your bottom line. As a Cline Wood client, we care about your business; you can depend on the knowledge and experience of Cline Wood to help analyze and solve your needs. To learn more about how Cline Wood can help your trucking business, click here.

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