High driver turnover? Spoiler Alert: It could be the pay

When Glen Parsons purchased Alchemist Specialty Carriers in Langley, B.C., he knew he had his work cut out for him. The former owner of Coastal Pacific Xpress (CPX) was enjoying retirement mode. When I spoke to him about his latest venture he was wintering in Mexico.

But the opportunity to take something broken (Alchemist was languishing as an afterthought under CPX’s new ownership when he bought it) and fix it was appealing. And so he took the leap and in 2015 purchased the tanker fleet and was back in the trucking business.

ACS trucks in yard
(Photo: Alchemist Specialty Carriers)

I first interviewed Parsons in 2005, when he was co-owner of CPX. He had a good story to tell about the company’s approach to the business. His motto was simple, if uncommon. People came first, the customer second. Profits a distant third. That year, CPX shared $400,000 in bonuses with its staff, including drivers.

Parsons wanted to bring the same approach to Alchemist and he knew something had to change. Driver turnover was 75%. The business couldn’t continue to function like that, especially since it was a tanker fleet requiring extensive training for new hires.

Why truck drivers leave

Why do drivers leave trucking companies? It’s often said (by employers) that it’s not about the money. But ask drivers, and yes, it is about the money. You can create a healthy work environment, brag about an open-door policy, route drivers to get them home more often, but at the end of the day this industry remains one of few that expects drivers to frequently work for free. Two hours unpaid at a shipper or receiver waiting to be loaded or unloaded? What other industry expects that of its workers?

One of the first steps Parsons took was to increase driver pay, but he went beyond increasing the mileage rate by a couple cents. He developed and implemented a hybrid hourly/mileage-based compensation system that ensures drivers are paid for all their time. Waiting for a load? Driver’s getting paid. Stuck in traffic? Driver’s paid for that. Installing tire chains? Paid.

Parsons told me he has a friend who owns a construction business and would gladly hire any of Alchemist’s drivers in a heartbeat. That construction business doesn’t expect its employees to work for free. That’s the type of competition trucking is facing for labor.

Every hour should be compensated

“We believe that people’s time has a value,” Parsons said. “We believe every hour that person spends working for us should be compensated.”

Drivers are expected to put in about 45 miles of travel per hour. If a 450-mile run takes 12 hours instead of 10 due to circumstances outside a driver’s control (say, weather or traffic) then the driver is paid hourly for the additional time. If the driver makes their delivery in nine hours, they get paid for the 10 it was expected to take. They’re paid $42-$45/hour for any waiting time or delays they encounter beyond their control.

Drivers are also paid safety bonuses and long-time service bonuses at five and 10 years. A top performer is awarded another $2,500. And $5,000 to $8,000 a year is spent on training for every driver. Alchemist drivers are making, on average, well over six figures.

The result? Alchemist has seen driver turnover plunge from 75% to just 2%. But whenever there’s a discussion about compensating drivers by the hour, for all the work they perform, fleets owners push back, arguing that doing so – barring a wholesale industry-wide conversion — will make it impossible to stay competitive on price.

Driver satisfaction, safety pay

So I asked Parsons if Alchemist is priced significantly higher than competitors in the region. The opposite is true. He said the pay increases essentially paid for themselves. As soon as drivers felt they were fairly compensated for all their time, overspeed incidents vanished. Hard braking became virtually non-existent. Load contamination was no longer an issue. Bottom line – when drivers felt valued and unrushed, the quality of their work improved.

Alchemist received substantial rebates and discounts from its insurer. And it’s turning down more new business opportunities than it can take on. Alchemist’s experience serves as a fascinating case study for paying drivers fairly for all the time the spend working. It’s a novel concept and the time has come. Pay drivers for all their time, ensure they’re compensated adequately, and you’ll get their best in response. And the best part of it all – it doesn’t have to cost a lot of money. Happy drivers are safer drivers, and safer drivers are more profitable to employ.

If your fleet is struggling with high turnover and all the related costs and headaches that go with it, you can try to convince yourself until you’re blue in the face that it’s not about the money. Spoiler: It’s often about the money.

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James Menzies is editor of Today's Trucking. He has been covering the Canadian trucking industry for more than 20 years and holds a CDL. Reach him at james@newcom.ca or follow him on Twitter at @JamesMenzies.

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  • What’s wrong with hourly rates at 40$ per hour?
    Starting when you start the day, till you end the day.

    Just like everyone else.

  • A number of companies in ont are replacing good drivers that are making $30 plus / overtime medical with foreign student ( truck drivers)
    Too many truck drivers are not happy with the unpaid time eating into their log and pay

  • I had 2 people come from Ukraine and one from western Europe that could drive trucks. I helped them get jobs in a factory and in a office setting all of them are making over $25./ hr and been in canada less than 5 days Huron Easyshare blyth . They have tempary housing with our nonprofit