Unlocking driver retention: balancing load assignments and driver pay

Learn key strategies to retain truck drivers by balancing loads and driver pay for improved satisfaction and efficiency.

As our goods crisscross the nation each day, millions of men and women behind the wheel ensure our freight reaches its destination. Yet, retaining these invaluable drivers has proven to be an uphill battle in recent years and carriers can start by balancing load assignments and driver pay.

Annually, a staggering $2.8 billion is lost due to driver turnover. And this isn’t just about the drivers – it’s about idle equipment, relentless recruitment costs to replace drivers, and the multitude of other associated costs that carriers bear. This issue’s magnitude becomes clearer when we find the turnover rate for large truckload carriers has rocketed to 94 percent, a 20 percent increase from the first quarter of 2017. Smaller carriers also grapple with high turnover, at a startling 73 percent.

Early driver turnover is even more concerning. These fresh faces eager to start their careers are the most likely to leave. According to Stay Metrics, a study of 62,000 drivers from more than 100 trucking companies showed 70 percent of drivers left carriers within their first year in service. 57 percent of those drivers departed within six months, and 35 percent within the first three months.

Clearly, our industry must perform some introspection. The reasons for such a driver exodus are incredibly complex, and driver pay consistently ranks as a top concern. In the Spring 2023 Truck Driver Survey by Conversion Interactive Agency, predictable pay, better home time, more consistent miles, and stable freight topped the list of reasons drivers were considering other jobs.

If we can address these issues, it won’t just be to improve numbers. It will help foster a culture that values and supports drivers everywhere, one that recognizes the pivotal role they play in global commerce.

Driver pay’s role in retention

Compensation serves as a tangible acknowledgment of a driver’s dedication, skills, and all the hours they’ve poured into their work. The intricacies of how payment works in the trucking industry are as diverse as the individual companies and drivers themselves. For instance, according to the American Trucking Association’s (ATA) 2022 Driver Compensation Study, the average base mileage rates increased between 7 cents and 10 cents across all major for-hire sectors in 2022. This is in line with the Bureau of Labor Statistics Occupational Employment and Wage Statistics, which showed that heavy and tractor-trailer truck drivers received a median wage of $50,340 in May 2021, increasing to $53,000 in May 2022—a 5.2 percent rise.

These figures highlight the industry’s efforts to better compensate drivers, but they also underscore the complexity of the issue. Carriers employ a variety of payment strategies depending on their operational models. Some choose salary models with consistent paychecks regardless of miles. Others prefer hourly rates, especially for local drivers navigating urban areas rather than major highways. The most prevalent, though, is per-mile compensation, where drivers earn between 28 and 40 cents per mile. While this model can be lucrative for those covering vast distances, it’s susceptible to external factors like inclement weather, congested city driving, and fluctuating market conditions that can affect freight rates and demand.

“It can be complicated from a management perspective,” President and CEO of the National Transportation Institute Leah Shaver told TruckingDive. “But it allows for a happier driver.”

Common driver payment methods in trucking

In the trucking industry, carriers have what can be described as a “pay toolbox,” a collection of diverse payment strategies designed to attract and retain drivers. This toolbox is not one-size-fits-all – it’s tailored to meet the unique needs of individual drivers and the operational models of different carriers.

  • Salary-Based: Provides a fixed annual income, offering stability but potentially capping earnings for those who could drive more.
  • Hourly Pay: Best suited for local or short-haul drivers, this method compensates based on the number of hours worked, including time spent waiting for loads or unloading.
  • Per-Mile: The most common method, paying drivers for each mile driven. While potentially lucrative, it’s subject to external factors.
  • Performance-Based: Some carriers offer bonuses or incentives based on performance metrics like fuel efficiency, safety records, or customer service ratings.
  • Production Targets: Carriers may also set production targets, such as the number of loads completed within a timeframe and offer bonuses to drivers who meet or exceed these goals.
  • Load-Based: Drivers are paid a percentage of the load’s value, aligning their earnings more closely with the carrier’s success on each trip.
  • Guaranteed Pay: This ensures that drivers have a stable income, irrespective of external factors like weather conditions or market fluctuations that could affect the number of miles driven.
  • Dedicated Lanes: Offering dedicated lanes allows drivers to become experts on specific routes, optimizing their efficiency and job satisfaction. This can be particularly appealing for drivers who prefer predictability and routine in their schedules.

The more we investigate the complexities of aligning drivers with optimal loads, the more important it becomes to understand that payment strategies are more than simple transactions. They’re a reflection of carrier values and a significant factor in driver satisfaction. And while competitive pay can attract drivers, it’s not the sole factor in retaining them. In an industry where less-tenured drivers often get less desirable shifts, leading to attrition and poor retention, understanding and optimizing payment strategies is critical. Whether salaried, hourly, or distance-based, each payment approach plays a distinct role in motivating drivers and fostering an environment that nurtures both driver satisfaction and operational efficiency.

Aligning expectations from recruitment to retention

According to Tim Hindes, CEO of Stay Metrics, the journey to successful driver retention starts at the recruitment stage. This is where transparent communication is paramount. Carriers must clearly outline what drivers can expect in terms of miles, benefits, and overall experience. But setting expectations is just the first step in a complex triangle that includes driver retention, load assignments, and payment methods.

In many fleets, especially more dedicated or private ones, load assignments are often based on seniority. While this system rewards long-tenured drivers, it can be a double-edged sword. New hires, who are already navigating the complexities of payment methods and benefits, often find themselves with less desirable shifts—more overnight hours, weekend schedules, or challenging routes. This seniority-based system can exacerbate the challenges of retaining less-tenured drivers, especially when their payment is also tied to the quality of their assignments.

The gap between promises made during recruitment and the reality on the ground can sow seeds of discontent. For instance, if a carrier promises consistent miles but doesn’t deliver due to poor load assignments, it directly impacts the driver’s payment and job satisfaction. Research from Stay Metrics indicates that fostering a positive rapport between drivers and dispatchers can reduce early turnover by around 16%. This highlights the importance of aligning all three corners of the triangle: driver retention, load assignments, and payment methods.

By proactively managing this intricate balance, carriers can create an environment that not only retains drivers but also optimizes operational efficiency. It’s a win-win situation that benefits both the drivers and the carriers, setting the stage for a more stable, satisfied, and loyal workforce.

The future of load assignments: embracing technology and training

As we hurtle toward a more digital future, the trucking industry is ready to embrace innovations that may redefine what it means to be a trucker. For example, the rise of Electronic Logging Devices (ELDs) has been transformative. These devices, mandated by law, are now an integral part of any driver’s toolkit. Still, they’ve faced challenges in gaining wide acceptance.

A Motive survey found only 21 percent of drivers were content with their ELD. But we shouldn’t think of this as a technology problem – it’s more of an implementation challenge. Once we’re able to refine these technologies to be more user-friendly, we’ll likely see a huge shift in driver satisfaction and operational efficiency.

Beyond ELDs, integration of dashcams, fleet management software, and AI-enhanced systems is setting the stage for a revolution. These technologies are not just about streamlining operations or enhancing safety; they are about creating a new paradigm where data-driven insights meet human expertise.

As technology advances, it’s not just redefining how loads are assigned; it’s also transforming payment methods and, by extension, driver retention. Automation and AI have the potential to optimize load-to-driver assignments based on a variety of factors, including driver skill level, route familiarity, and even preferred payment models. This holistic approach ensures that drivers are not only assigned loads they are best suited for but are also compensated in a manner that maximizes their satisfaction and loyalty. In this evolving landscape, the integration of technology serves as a linchpin, harmonizing load assignments, payment methods, and driver retention.

Looking ahead, the coming role of automation and AI looms large. These tech newcomers will revolutionize load-to-driver assignments, addressing many long-standing issues of loads not being available or inconsistent miles. Carriers will be able to predict load availability, optimize assignments, and ensure their drivers have consistently profitable routes

Strategic solutions for balancing load assignments, driver pay, and retention

In the trucking industry, the challenge isn’t just retaining drivers—it’s about optimizing a complex system that balances load assignments, payment methods, and driver satisfaction. By focusing on these interconnected elements, carriers can unlock new avenues for improving driver retention while enhancing operational efficiency.

Load assignments and driver satisfaction

  • Flexible Scheduling: Offer a variety of shifts and routes to accommodate drivers’ preferences and life commitments. This can improve job satisfaction and reduce turnover.
  • Seniority-Based Rewards: While seniority-based systems can be beneficial, consider offering incentives for less desirable shifts to newer drivers, such as flat-rate bonuses or additional PTO days.

Driver pay and retention

  • Transparent Compensation: Clearly outline the payment structure during the recruitment process and offer periodic reviews to align with market conditions.
  • Incentive Programs: Implement performance-based bonuses or mileage-based incentives to motivate drivers and make them feel valued.

Technology as a balancing tool

  • Harnessing ELDs and Fleet Management Software: Use technology to optimize load assignments and payment calculations, making the process transparent and fair.
  • AI in Load Assignments: Technologies like AI can predict load availability and optimize assignments, ensuring a fair distribution that can improve driver satisfaction.

Integrated strategies

  • Open Communication Channels: Foster a culture of open dialogue where drivers can voice concerns or suggestions about load assignments, payments, preferences, or other issues.
  • Mentorship Programs: Pair newer drivers with experienced mentors who can guide them through the complexities of acquiring load assignments, payment structures, or other conditions to offer a more holistic onboarding experience.

By implementing these strategies, carriers can create a more harmonious balance between load assignments, payment methods, and driver retention, leading to a more stable, satisfied, and loyal workforce.

Nurturing a culture of partnership and longevity

As we navigate the complexities of driver retention, load assignments, and payment methods, it’s crucial to remember that these aren’t just logistical challenges. They’re opportunities to shape the very ethos and culture of our organizations. The strategies we adopt and the technologies we embrace are not merely about optimizing operations; they’re about nurturing a culture of partnership, respect, and longevity.

In this intricate choreography, every decision we make sends a ripple effect through our organization, influencing not just our bottom line but the satisfaction and well-being of those who make our success possible. By adopting a holistic, driver-centric approach, we’re not just solving isolated problems; we’re creating an ecosystem where drivers feel valued, loads are optimized, and payment methods are fair and transparent.

Learn more about the future of load-to-driver assignments here.

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