With the truck driver shortage being one of the industry’s hot topics right now, wages have been in the spotlight. This week new research has come out showing what type of wages truck drivers prefer to make and how incentives are evolving.
With new technologies making it possible for fleets to accurately measure almost every aspect of a truck driver’s performance, carriers are coming up with creative new ways to assess pay and promote good performance. So how exactly is the data deluge affecting pay and truck driver incentive?
Truck Driver Pay Packages
The details of any truck driver pay package come together in a single unit based on three main factors:
- Rate per mile
- Rate per hour
- Percentage split of load revenue
Historically pay per mile and pay by percentage of load revenue have been the most popular options among carriers, but are those the most popular options among truck drivers?
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Based on a survey that was taken of more than 4,000 truck drivers across 31 carriers, the following information pay type numbers were gleaned:
- Rate per hour: 360
- Rate per mile: 1,795
- Percentage split: 2,364
Of the 31 carriers surveyed, 22 of them reported using multiple methods of pay for their truck drivers. The research also showed that the majority of the truck drivers surveyed actually prefer a percentage split pay method.
Another thing the study shows is that there is a high correlation between a driver’s perceived input into how they are paid and their overall pay satisfaction. When a driver is paid based on what the customer is charged, there is an alignment between what the driver gets and what the carriers get, at least in the driver’s mind.
Truck Driver Incentives
Beyond the type of pay being received, new technologies are allowing fleets to offer up unique ways of rewarding truck drivers for data driven performance. These new technologies are resulting in fleets of consultants offering up newfangled ways of judging how drivers are doing.
Common types of incentive plans being proposed include:
- Giving truck drivers a retroactive cost per mile increase which would be based on the number of miles driven in a certain time period.
- Providing a tiered incentive that is tied to specific goals and offers a flat payout.
- Changing the base rate for future miles driven within the next time period allotted.
Carriers are trying to not overly emphasize the monetary component of the incentive structure, however. As many a leadership coach will tell you, more effective motivational tools include intrinsic motivators like job mastery, recognition, and purpose. Knowing they are doing a difficult job and pleasing customers often gives drivers as much satisfaction as a pay bonus.
Many carriers are following a specific seven-step process that lays out how they are creating effective pay-for-performance incentive plans. By designing their enterprise performance management systems around solid principles, they can ensure fairness and driver buy-in.
The principles within this process should include:
- Define the results: The incentive plan should have at least two or three tangible goals tied to specific needs.
- Solicit feedback: Without driver buy-in, incentive plans will fall flat before reaching their states goals.
- Clarify who gets what: Obviously not all incentive programs are created equal. There is not a one-size-fits all and different driver types should be incentivized differently.
- Develop the plan: Once the problems have been isolated the goals defined, the plan should be fleshed out.
- Run a trial: Many carriers have a lot of drivers. Even when it seems all the homework has been done, running a small trial before a company-wide roll out is a prudent decision.
No matter what type of pay package or incentive being offered, the truck driver shortage is causing a scramble among carriers trying figure to out exciting new ways to entice potential drivers. As pay increases and technology changes how performance is measured, only time will tell if these factors will increase people’s interest in making trucking their next, or first, career choice.