Bogus bonuses?

April 12, 2018

John Bendel

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Sign-on bonuses are a better deal for carriers than they are for drivers.

Hey, I’m not saying a sign-on bonus isn’t money in your pocket – if you qualify. But sign-on bonuses are unfair to drivers already working for the company, and worse, they help carriers avoid what they should be doing – raising real pay.

According to one recruiting company, the average cost to replace one driver in 2017 was $12,000. That includes administration expenses, advertising, background research, medical exams, training, and other stuff.  Currently, bonuses offered trend from $2,000 to $20,000 for single and team drivers. So it appears that bonuses could roughly double the cost of driver recruiting.

Not necessarily true.

Do you get the signing bonus money the moment you sign? Of course not. You have to stay with the company for a certain length of time, a certain number of miles, or whatever. It varies, but let’s say you have to stay one year. Some drivers quit early, some stay. The average length of employment overall is one year. So depending on turnover, a carrier may actually pay bonuses to only half of the drivers who sign up – at least statistically.

It’s not the most efficient way to work, but in an industry as absurdly out of whack as the U.S. truckload sector, it means drivers who didn’t last long enough to collect their bonus at least delivered some loads before they ran screaming from the job.

Sign-on bonuses are an obvious affront to drivers already with a fleet. They may earn more than newbies because they’ve been around and they’re worth more. They know the company, they know the customers, and they know the job. They’re getting things done.

Newbie rates are set lower for the same reasons but it’s about what they don’t know and what they can’t do. Yet that bonus is part of their pay no matter what they call it. And on top of their normal earnings that first year it amounts to a raise that no one else in the company gets. And it’s not for productivity, safety, or any other good reason. It’s simply because they lasted a whole year.

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Here’s the really lousy part: When the economy is good as it is now, businesses prosper and workers are hired. That’s clearly good for business owners, stockholders, and the executives who run their companies. Good times are supposed to be good for workers too.

When labor markets are tight, wages should rise. That’s how the free market is supposed to work. Sure, many carriers have raised pay to attract drivers in this economy. Some have turned to sign-on bonuses to bring drivers in the door.

Carriers like bonuses. If they were to raise pay, it would have to be across the board for all drivers. And it’s hard to take away a raise or lower mileage rates when the economy flops – as it inevitably will.

No such problem with the bonus. No matter how large, it’s a one-shot deal. The fleet hasn’t really raised mileage rates, hourly pay, or salaries. The fleet has retained its lower compensation rates for the longer term.

For the new driver? If you could get the sign-on bonus when you sign on, that would be one thing. But if you have to work for a year, it’s less like a bonus than pay that has been withheld. And once you’ve received it, you’ve also gotten what for all practical purposes is a pay cut.

And probably just when you were getting good at the job.

 

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John Bendel

John Bendel is Land Line’s contributing editor-at-large. A former trucker, former editor at National Lampoon, and longtime truck writer, John is an author, photographer, and freelancer for New York Times. There’s more, but in short, his insight and matchless style of writing makes “Gizmos and Gears” a runaway reader favorite.