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Driver wages part 2: Win/win


I have been out and about since the last article, couple times to Texas, Toronto last week to the Surface Transportation Seminar and next week off to Mississauga to the Bridging Boarder Barriers session, presented by Truckload Carriers Association. I have also been busy as the author of the just released Driver Retention Masterclass series through Vertical Alliance that can be found at, www.infinitiworkforce.com/experts/expert-modules-library/driver-retention-masterclass that was a shameless act of self promotion by the way, oh well it’s a good program what can I say.

Releasing the training has granted me the opportunity to reconect many fleets and to facilitate a number of workshops on both sides of the border, which I greatly enjoy. As you may recall last month I cautiously dipped my toe into the subject of driver wages, and I thank many of you for your comments and feedback, I love to hear from you folks. This month I think it would be valuable to any number of carriers who might read this article to give them some thinking material on the same subject.

In my workshops I stress that carriers have to know where they are in relationship to the rest of the market on driver wages, usually bewilders me when I ask companies their turnover numbers and find out their much higher than they would like. Second question is what are you paying drivers in relationship to the market they compete in only to hear back that they are middle of the road or below the mid point and many are not sure how the measure up, not a clue. Hey I’m no Warren Buffet but I think we might have identified where one of the issues might be with you turnover.

With a lot of carriers I think they feel stuck, kind of the chicken or the egg type scenario, if I pay the drivers more than I am now, I might eliminate the thin margin that I have, it might not be good but it is at least black ink. The problem with that logic is that it misses the very thing that will actually increase their margins; part of the solution to both issues is a win/win program, a share in the gain opportunity. I know this is not new information and that and that there are carriers doing this now but not near enough from what I have seen.

From the mountains of data that is readily available in today’s world it has never been easier to build a set of metrics, MPG, safe driving, hard brakes, clean inspections, accidents and claims to name just a few. Create a reliable scorecard predicated on where your fleet is now on these items and what the potential gain is for your bottom line and then generously reward the drivers individually on their performance related to each item.

That is what is called a win/win in addition and to assist the driver you offer education on each item so that they can learn how to be best in class on each of them. This type of system has the potential for the driver to earn their way to the top of the pay scale in the industry and of course increase the carrier’s bottom line substantially.

Word of warning to carriers is to not go down this road unless you have your act together, there is a lot of base work that has to go into this program. There would be nothing worse than rolling this out if you don’t have a very clear picture for every driver as to exactly the potential size of the reward, how you will administer the program and how you will ensure the integrity of the program.

I would probably start slow and bring in more items as I work the bugs out of the ones I start with, MPG is an obvious one that would easily be measured and rewarded. Just and example if you were to realize eight miles per gallon as a goal and your currently realizing 7 mile per gallon, you do the math for yourself but if I was to use $1.15 per liter the savings are in the range of 8 cents per mile. A hundred thousand miles is $8,000.00 so why not split that with the driver. You get an extra 4K and so do they. Continue with the other metrics and your starting to accumulate some serious money as a carrier and the driver is now vested in the results of the truck.

Once you have your numbers rolling in and your starting to enjoy the win/win results one could even go further with this type of thing and get your company involved in a benchmarking program so you can measure your results to other comparable companies to see if you’re as good as you think you are. https://tcaingauge.com

The fixed expenses involved with the operation of a trucking company are solidly within the domain of management, equipment cost, facility overhead, plates and on and on. Once these are negotiated for their respective term, that’s it, nothing you can do until renewal and then you start negotiating again. Where the cash is hidden is in how the variables are managed, yep all those things that generally are in the domain of the driver, and how do we reward that person, usually by the mile, it’s not enough.

If you think about it these two paradyms are diametrically opposed, so I want you to operate my equipment as efficiently as possible at all times but I will reward you solely on maximizing the production of miles. The balance and the win/win here is for the company to train, entrust and reward the driver in such a way as to operate the equipment as efficiently as possible while at the same time they professionally execute the delivery of the customers good, and this balance can be acheived.

Speed Governors, Electronic Logging Devices, GPS tracking, are kidding me, turn and burn is soon to be gone forever, and good riddance. Driver if your at a accompany that still operates that way, you need to be looking around for a better gig and if I was you I might be looking for one that offers to reward me for my professionalism in a fashion that might resemble the win/win described above.

Safe trucking.


Ray Haight

Ray Haight

Mr. Ray Haight has enjoyed a successful career in transportation starting as a company driver and Owner Operator logging over one million accident free miles prior to starting his own company. After stepping down from a successful career managing one of Canada’s 50 largest trucking companies, Ray focused on industry involvement including terms as Chairman of each of the following, the Truckload Carriers Association, Professional Truck Drivers Institute, North American Training and Management Institute and the Ministry of Training Colleges and Universities voluntary apprenticeship of Tractor Trailer Commercial Driver, along with many other business interests, he enjoys a successful consulting business, also sitting on various Boards of both industry associations a private motor carriers. He is also Co-Founder of StakUp O/A TCAinGauge an online bench marking service designed to assist trucking companies throughout North America focus on efficiency and profitability within their operations.
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12 Comments » for Driver wages part 2: Win/win
  1. meslippery says:

    Driver wages part 2: Win/win
    ————-
    So Win/Win is truck drivers are for the most part only worth minimum wage? Re: part one…

  2. meslippery says:

    However the spin off jobs you know author of keeping drivers or the driver recruiters.

  3. meslippery says:

    Oh and if the driver saves you 8k you should give half back, seeing how the driver is so lucky to be earning minimum wage and has saved all that fuel for you.

  4. You must wake up sour and get worse as the day goes on

  5. meslippery says:

    You must wake up sour and get worse as the day goes on.
    ——
    That;s about how most driver concerns are dealt with,
    dismissed with prejudice.

    PS I can be sweet show me the money.

  6. Derek says:

    I’m sorry, but you’re wrong. Efficiency is part of it, but here’s what these guys do. They get some savings and then they use that to undercut the competition which drives down the income and reduces what they are able to pay the driver. All your methodology does is put more stress on the driver in an already stressful situation. What the carriers need to do is pay the drivers for their time. All of their time. And stop nickel and diming them with confusing matrices of wait times, picks, drops, and all the other crap they dream up. Pay me x for 70 hours a week and then throw in the bonuses. You don’t need to be out there giving them good ideas about how to screw us.

  7. john wihksne says:

    Ray-Politics? – 50 years later still have not classed “Professional” driver as a trade? Why not? Corporate and Government are determined to keep wages below minimum, to accomodate companies at the expense of the worker. I,like yourself covered the industry from grass roots through driver training, Accident Investigation,Fleet Management etc. Monetary gain equivelent to other trades, will end “driver shortage”! – – John,Vancouver.

    • Derek says:

      Yeah. There’s more to driving a truck safely than steering the wheel and it’s not recognized for what it is by anybody except the people who do it. The latest argument I heard was that, “if wages in the industry go up, then the labor costs will drive up the costs of goods and services for everyone because they’ll pass it on to the consumer”. Well no s@#t ! Maybe… just maybe… people will come to understand the true value in the economy, and maybe… just maybe… they’ll start to care about how the “power” (government, CEOs, etc.) in the economy spends the resources that are generated. You’re GD right truck diving should be officially recognized as a profession by the government. No amount of trying to screw people out of fair compensation by failing to recognize their skills is going to save them in the long run anyway. They (the carriers and business) should be trying to get all the allies they can now, while they can. A fairly compensated professional will stick around to take care of their business, an indebted slave will rebel at some point, it’s inevitable.

  8. Kurt says:

    Riddle me this: Why do companies offer recruiting bonuses for new hires, pay for advertising, training, and lower efficiency of the newly hired……but never offer a cent for retention of existing drivers? Shouldn’t those costs not incurred be split with the driver?

  9. Allan Wilson says:

    In and out this industry since 1987, about 24 years driving. And one thing has yet to change. Drivers are the absolute last consideration on any companies list of concerns.
    Back then at my first job I asked the owner how to do something, he says “ you’ll figure it out “. Today companies through in ELDs, you ask how to use it, they say “you’ll figure it out”.
    A large receiver institutes a new PPE policy, sends an email 60, 30 and 7 day’s prior to implementation. On the day of, our first driver gets rejected, trucking company finally sends out a message telling drivers they immediately have to have PPE.
    Pay is a big issue, a larger issue is keeping drivers informed. You would think that would be easy n today’s world.

  10. john wihksne says:

    Ray-the common denominator is stil”MONEY” equivelent to other TRADES !

  11. meslippery says:

    I think Ray would say put in a washer and dryer and drivers being held up with no pay can feel good cause they got something done.
    OK but what if your clothes are all clean?
    He (Ray ) still re: part one has not said drivers should make more or even as much as min. wage.

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