Creative Solutions to Driver Compensation Problems

Posted by Scott Rea on April 26, 2019 in the category Retention

If your driver retention numbers are as bad as the industry average, you can change that! It should be no surprise that pay is one of the most common cited issues. In fact, based on driver exit-interviews, it’s one of the top five reasons drivers quit. However simply paying more won’t reduce turnover. Driver pay rates have spiked over the last year but it hasn’t helped with retention. Since throwing more cents per mile at the driver problem won’t solve it, we’re going to look at three common issues companies run into with driver compensation and what you can do about it.

Pay Complexity - Keep it Simple

Are your driver rates easy to understand? Perhaps more importantly, is it easy for drivers to get paid? If your drivers have to navigate cumbersome processes like filling out and scanning in complex forms, you’re putting undue burden on them. If you’re a salary employee, you get paid via direct deposit - money magically shows up in your bank account every two weeks and it’s the same amount each week. You never wonder if it’s the right amount or if you got your paperwork in. Antiquated pay systems involving physical forms leave a lot of room for error and cause issues in driver payments. Delaying payments is just as bad of an offense. Keep your drivers happy and keep it simple so it doesn’t require a PhD to interrupt your pay structure. I once watched a driver trying to decipher his pay stub. He told me “they’re screwing me. I don’t know how, but they’re screwing me.” It turns out our client was not screwing this driver but because he didn’t understand the pay structure, he assumed the worse. If drivers understand how the payment process works, they’ll trust you.

Transparent Load Board

We’ve never met a driver who gets the good loads - it’s always the other drivers. Favoritism is perceived as rampant in every dispatch office we’ve visited. Some true, some not - but perception is reality. Often times, this is based on attitude and willingness to take loads. A common and true statement made by dispatchers is: “if they just took every load I gave them, they’d make a great living.” However, if you don’t have a transparent process on how loads are assigned, you create a perceived inequity in driver pay. When drivers sense favoritism, especially when it comes to pay, they’re liable to quit. How transparent is your load assignment process?

Variables Outside of Driver’s Control

Drivers get paid when they’re loading, unloading, and of course, driving. In short, drivers get paid when they’re being productive. However, loading, unloading and driving usually are different pay rates. In addition, there can be variables that affect pay and are outside of the driver’s control. Unnecessary idle time, traffic delays, bad weather, and mistakes made by dispatchers and customers can all reduce a driver’s paycheck. These events are the difference between making enough to pay the bills or a driver leaving your company. Some of these factors are out of your hands as well, but the driver’s paycheck should not carry the burden. Charge your clients for unnecessary delays and pass it on to your drivers. Provide guaranteed payments so the driver has no anxiety when there are delays. We love pay programs that have a weekly pay guarantee to relieve that anxiety and ensure your drivers have a livable wage. Don’t worry about driver’s milking the system - you have enough tracking devices to measure productivity and set a minimum performance standard to receive the payment. Invest in these payment programs, they pay for themselves by reducing turnover.

Improve Driver Retention With Better Compensation

There’s no silver bullet to improving your driver retention. Better doesn’t always mean more. Drivers quit for a number of reasons, from unmet expectations to bad management. However, small adjustments can help alleviate a tremendous amount of your drivers’ pain. By keeping your pay structure simple and fair for your drivers, your retention numbers can only go up.

75 Strategies to Help Increase Driver Retention

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