The Elephant in the Room

I have been asked on many occasions to take on a subject that I have touched on several occasions, but that I’ve never really gone at ‘head on’. There are probably a couple of good reasons for this including, but not limited to, the fact that this subject is a bit of a rabbit hole. It can easily lead to many different places once you start heading down this road and you are likely to disenfranchise yourself with any number of folks regardless of what position you take on this subject. Having said all that, let’s get at it. I have said in the past and it is still true today, at times, there is nothing more illusive than an obvious fact and this is one of those times!

The obvious fact is that we live in a free market society whose economy runs on a supply and demand structure. The market will dictate the remuneration you’re paid, determined on the specialty of your trade or skill in conjunction with the scarcity of workers in your sector. So if one is to put forth the position that drivers are vastly underpaid, the argument that there is a driver shortage holds no water and must be false. You simply can’t have it both ways.

To do this subject justice might require more than one article and it will definitely need your input, so please give me your feedback as I want to hear from you on this; both drivers and executives. I will give you my opinion on the only two paradigms that matter on this subject; first the driver’s, then the company’s.

When I look at this subject from a driver’s prospective I don’t blame any of you for being completely confused. Over the past many years you have repeatedly heard and repeatedly been told that there is a driver shortage that is now at a critical stage. The problem is, if this is in fact the case, then why hasn’t the average driver wage reflected that reality? Depending on where you search, the internet results you can expect to see is an average annual pay rate between $50K and $65K. Often this depends on where in the country you are based and/or the sector of trucking you work in. Owner Operator’s numbers are vastly different ($200-$225K gross) but the take home amount can be the same. The difference is that an O/O will usually pay less tax.

Obviously something is amiss and has been for quite some time as extreme shortages and $50K to $65K annually does not add up. To be accurate, there are companies out there that have drivers making markedly more than this and likely, there are some that pay less. The number I use is an average as I found numbers from $38K to $100K. A typical driver take home pay is greater for the most part than that of the general average employment sectors but I can see a high frustration level when folks in our profession are continually told of the egregious situation that the industry is facing with its overall lack of drivers.
It’s hard to bridge the gap between what we continually hear and read from industry trade magazines and the national press and what we see in the numbers and average pay scales. The two don’t add up so what’s one to do if you are a driver? A number of things come to mind, especially in light of the fact that any number of driver surveys over the past couple decades reveal that often money is not always the major factor or the top reason for a driver to quit their current carrier.

There are two messages here: one is for you the driver to always be checking the market to ensure that you are being paid at or preferably above market rates for your services. If your research reveals that you are not, I would have the discussion with your employer and let them explain their perception of the situation. The second message is of course, for the employers: that they need to make driver pay packages understandable and explain them clearly. I suggest an average base pay rate, certainly no less than industry average for your sector is a good platform to start with. Then a gain share bonus plan predicated on all the familiar touch points; fuel burn, accident free miles, longevity and production; whatever they are for your company. These bonuses should provide the driver with the opportunity to get to the top of the range of driver wages in your area. Finally, the most critical part of the strategy is that the company needs these gain share bonus plans to be obtainable, under promised and over delivered. What a concept right! You get this part right and the word gets out and you may have something. You’d think anyway. Reality is – maybe not, because surprise – surprise, there is another twist waiting around the corner and it’s called a Human Resources Strategy and driver satisfaction.

So driver, assuming you’ve done your homework, you are now aware of where you stand with your company’s payment schedule relative to the rest of the market in your area. You can stop looking for greener grass and get to work now. Correct? Not quite. I have discussed Maslow’s hierarchy of needs in previous articles and that we as human beings are driven to needs in a sequential order as it is in our nature as human beings. For us to truly enjoy the sense of physiological (or money) needs we have achieved, we now need to move on to the safety level and then of course up to the belongingness, esteem and finally self-actualization levels. If a company decides to lead the industry with their wage package they will still be challenged to retain their drivers unless they offer an entire package that includes a sense of community and all that goes with it.

Is there a driver shortage? To me the numbers reflected in driver wages would suggest there isn’t – not that I can see anyway. When I ask most executives about their turnover rates, very rarely do I get a definitive clear answer. There is usually some hesitation and what looks to me as a very loose estimate of where they are at. This needs to change and until carriers realize that this subject needs to come out of the closet and be a daily focus; I worry that moving forward we will continue to be an industry that confuses driver shortages with driver wage levels.

If you have some thoughts on this topic please let me know, I’d love to hear from you.

Safe Trucking

Ray J. Haight
Co-founder
tcaingauge.com