Once a driver has been recruited, attended orientation and begins driving, take-home pay not meeting expectations out of the gate is a leading cause of early turnover. We have seen hundreds of comments from drivers that the settlement process is confusing and that they don’t understand what ends up in their pocket and why. And they can’t get understandable or timely answers.
Accurately explaining driver pay in recruiting is just the first step. In orientation, for most carriers, there is finally time to give explanations and training on how the system will really work.
Strategy One: Hear from Driver Settlement Representatives
Bring representatives from the settlement, HR and operations departments to give detailed presentations to train drivers on every aspect of driver earnings in your system, such as:
- How gross pay is calculated and what can influence the level up or down. These factors might include driver availability, run preferences, and whether a driver commonly will “ramp up” over time in a carrier’s system.
- How loads or runs are assigned or given out with special emphasis on efforts to make the process fair for new drivers.
- How standard and variable deductions work.
- What assessorial pay is available and when and the process to receive that pay.
- What process is available to appeal settlement amounts when the driver’s understanding doesn’t match their settlement.
- Business coaching for owner-operators on managing costs and other deductions under their control.
Whenever possible ask the presenters to prepare handouts with real-world examples for driver reference when out on the road
Now that the driver is operating in your system with a complete understanding of how the settlement system works it’s time for the next level.
Strategy Two: Track Driver Pay
If your goal is to truly move the needle on driver retention, then it’s time to stop thinking about drivers as just another variable expense that can flex up or down based on the needs of the business. It won’t work that way for salaried employees and really hasn’t ever worked that way for hourly office employees. People need a certain minimum level of income to survive and pay their bills and drivers are no different. Therefore, you should keep track of how your average driver pay is trending.
- Set a minimum threshold of gross settlement for a driver fully available in a settlement payroll cycle.
- Identify drivers who fall below that threshold.
- Investigate and rule out drivers who fall below the threshold because of things under their control like taking time off or turning down runs.
- Have someone in your team assigned to help the rest of the drivers falling below the threshold.
- At a senior executive level, track the percentage of drivers falling below the threshold as a leading indicator of potential turnover, symptom of operations maintain too much capacity or an early indicator of falling revenue opportunities.
The bottom line is that drivers must consistently make enough money to survive and thrive like everyone else. Clarity, transparency, training, and understanding are important. But making enough is vital.
You can learn more about driver pay trends by visiting the National Transportation Institute’s helpful Driver Wages resource.