No conversation about safety would be complete without a look at how we pay our drivers. Yet pay and safety are rarely mentioned in the same sentence.
Many stakeholders, including myself, believe the pay-per-mile model favored by 90% of highway carriers contributes to declining safety on the road.
When drivers only get paid when the wheels are turning, their incentive is to cover as much distance as possible regardless of the conditions. I cringe every time a truck flies by me in the middle of a blinding snowstorm.
With more inexperienced drivers — armed with their minimum 103.5 hours of “intense” training — getting behind the wheel, I am worried about the risk that comes when chasing miles.
At MSM Transportation we never had the courage to change to an hourly model even though we knew it was a better system. This is what carrier executives who have made the switch are telling me about their experiences.
Positives of hourly pay
Fair pay for fair work is paying dividends for fleets that have made the leap to per-hour alternatives. Recruiting drivers is easier and new hires are hanging around longer, improving their retention rates.
The commitment to hourly pay and framing it around safety can attract a more conscientious recruit. This “state of mind” is reflected in improved safety ratings and reduced insurance premiums. A happy driver is a more productive and safer driver.
Costs hard to capture
Hourly pay comes with costs that can be hard to capture, though, and they weigh heavily on fleets as they look at this model. Expect significant implementation costs to get it right. Your team has to be ready for short-term pain before any expected long-term gain.
Also prepare for operating costs to increase once you start paying for work that once was “off the clock.” Many fleets told me that once delays were on their nickel, they worked a lot harder to eliminate them and other costs that were once acceptable.
ELDs are the game changer
One of the fears carriers express about paying drivers hourly is the potential for “stealing time.” How do you police a driver’s activities when they’re 1,200 miles away?
Electronic logs have calmed the old-school naysayers. Every over-the-road carrier I spoke with said how much easier it is to manage hourly pay when the vehicle has an ELD.
As one CEO told me, ELDs create a standard that’s hard to beat: “Every driver uses the same technology on every truck, all day, every day.” With telematics, that 1,200-mile distance doesn’t seem like such a big deal.
Not all or nothing
As I mentioned in last month’s column, the safer carriers are safer than ever.
Most top fleets recognize the inherent dangers of chasing miles. They augment their pay-per-mile model to make sure drivers are compensated when the wheels aren’t rolling. Today, lots of fleets pay drivers for unexpected delays. They dole out bonuses for winter weather driving, daily minimums, and productivity.
What about paying drivers a salary? Yep, there are highway carriers doing it.
Fearful of costs
My guess is that 10% of highway carriers are all-in on the hourly model. When you consider the benefits, you have to ask why more haven’t switched.
Some are fearful of the added costs. Short-term inflation and economic uncertainty have put the kibosh on many carriers’ plans to change.
Some owners I spoke with agree that we’d all be better off with an alternative to per-mile pay but aren’t prepared to take the risk. They understand the cultural change and work involved. “Upsetting the apple cart at this stage of the game” is not on the table for a lot of successful fleets, one exec told me.
Putting safety aside, an hourly wage makes the driving job more attractive. People coming from some other line of work — or from a competitor — don’t have to wrap their heads around a Byzantine compensation system to know how much you’re going to pay them.
The industry has a problem in that currently no one wants to be a truck driver. The ones who do insist on being paid as independent contractors. Paying drivers by the mile is not working very well. It hasn’t for years, and it’s time for change.
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