Watch Now


The right pay to stop driver churn? $100K?

One-quarter of carrier respondents to a new survey believe that driver pay will need to approach $100,000 a year before it makes a dent in driver turnover. ( Photo: Jim Allen/FreightWaves )

Even as turnover at large truckload carriers dropped in the third quarter of 2018, a majority of carriers still expect driver compensation packages to increase, with one-quarter of those in a new survey saying pay needs to reach $100,000 before it has a material impact on turnover.

“Recruiting executives have mixed reviews on what they think turnover will do in the first quarter of 2019 – one-third expect it to increase, another 33 percent expect it to decrease, and the final one-third believe it will remain the same. However, 60 percent expect that future driver compensation will continue to increase,” said Lana Batts, co-president of Driver iQ, which conducted the survey. “Most unexpectedly was that 25 percent believed that driver pay would have to approach $100,000 before there could be a significant impact on turnover.”

The fourth quarter 2018 Recruitment & Retention Survey also suggested that carriers are still seeking to develop innovative packages to attract and retain drivers.

The American Trucking Associations (ATA) reported that turnover at large truckload carriers fell 11 percent in the third quarter to 87 percent. ATA Chief Economist Bob Costello attributed the drop – after consecutive quarters of increases – to a pair of market dynamics.

“The drop in turnover can be potentially explained in a few ways,” said Costello. “First, large pay increases fleets have been offering appear to be working, and drivers are remaining with their current carrier. Second, we did see a softening of freight markets in the third quarter from the incredibly strong pace they had set earlier in the year. Historically, softer freight volumes lead to lower driver turnover.”

DriverIQ provides background screening and driver monitoring services. In the Q1 2018 version of this survey, over 90 percent of carriers making more than $30 million in revenue believed driver pay needed to be above $75,000 to attract the proper candidates. According to ATA, driver pay has increased 15 percent, from $46,000 in 2013 to $53,000 in 2016 in the truckload sector. Private carriers raised pay from $73,000 to $86,000 during that time frame.

Batts noted the survey indicates a significant uptick in the past six years in the number of carriers willing to hire entry-level drivers. The Q4 survey found that 65 percent of carriers now say they will hire entry-level drivers, up from 30 percent in 2012, but only about 25 percent actually operate their own training schools to do so.

“This is because operating a company-based training school requires an up-front hard dollar commitment, trained staff, and dedicated facilities and equipment,” Batts said. “Unfortunately, once trained, drivers may leave the industry or move on to another carrier before the training company recoups their investment.”A small disconnect also exists between what companies say regarding 18-21 year-old drivers and those that would hire a driver in that age range. The survey found that 70 percent support the concept, but only 60 percent would hire one.

The Driver IQ survey also found that drivers who stay with a company more than two years most often come from referrals or rehires.

Respondents to the Driver IQ survey collectively operate over 75,000 trucks. The majority of the responses came from dry van carriers with over $100 million in yearly gross operating revenue.

Brian Straight

Brian Straight leads FreightWaves' Modern Shipper brand as Managing Editor. A journalism graduate of the University of Rhode Island, he has covered everything from a presidential election, to professional sports and Little League baseball, and for more than 10 years has covered trucking and logistics. Before joining FreightWaves, he was previously responsible for the editorial quality and production of Fleet Owner magazine and fleetowner.com. Brian lives in Connecticut with his wife and two kids and spends his time coaching his son’s baseball team, golfing with his daughter, and pursuing his never-ending quest to become a professional bowler. You can reach him at [email protected].