A Useful Way To Incentivize Driver Pay

One advantage of the driver shortage is that companies have excellent motivation to take good care of the employees they do have.

Already, median truck driver pay is about the same as the median income for U.S. households generally and often comes with competitive benefits packages. About 80% of private carriers offer a 401(k) retirement plan and match employee contributions. Almost 80% of truckload fleets offer paid holidays.

Pay does vary with the type of driving involved. For most categories, pay is $53,000 (U.S. median household income) or better, but national, irregular route dry van truckload drivers might make $46,000 and private fleet van drivers can make over $73,000. The bottom line is that driving a truck or a van is now a very solid way to make a living in America. Trucking is one of the few industries that does not require a college degree and can still lift entire families into the middle class and keep them there.

So with the entire trucking industry treating its drivers well, how can a carrier set itself apart to attract talent? Of course there is the option of simply paying more, but after a certain point most companies start looking for ways to make their payroll dollars go farther. The ideal scenario is to find a way to direct more money towards the best drivers so employees who want to earn more can, in effect, raise their own pay by improving performance.

One option is to change how drivers are paid. Traditional mileage-based compensation, for example, rewards those drivers who work hard, but unfortunately the system also rewards drivers who speed and who neglect to take adequate rest. Most modern fleets use combination methods, such as paying some drivers by the hour and others by the mile, or by paying per-mile drivers an hourly rate for unavoidable stoppages.

Another option is to pay drivers a higher per-mile rate based on their safety record. Safety monitoring software can track compliance with speed limits and stop signs and excessive breaking, and provides a way for a driver’s pay rate to directly reflect their skill level as an employee.

The advantage of this method is that more miles equals more pay at any given skill and safety level. Drivers cannot sacrifice safety in order to earn more money and can in fact earn more money on the same route by driving better. At the same time, pay also reflects how much work each driver does—how many miles go under the wheels. The carrier can simultaneously incentivize all aspects of a job well done.