Guaranteed truck driver pay is becoming a solution to improve the high turnover rates in the trucking industry.
The turnover rate increased to the highest it has been in three years at the end of 2015. Because turnover rates are at a high, companies will have to replace almost all drivers within the year just to steadily fill trucks. The need to hire new drivers to keep up with demand, are causing trucking companies to struggle to keep up the momentum that they are hoping for.
So what is the cause for large turnover rates?
Is the recent changes in pay the reason for recent driver shortages?
It seems that carriers are offering and continuing to advance in wage stability for drivers in order to effectively recruit and retain. The shortage of truck drivers has led to a new recruiting tactic which involves a financial promise for new and current drivers. It has been proven that a guaranteed salary for truck drivers is becoming a more common retention tactic that lowers turnover rates and tightens the driver market.
The National Transportation Institute’s, Gordon Klemp, provides evidence that a financial promise for drivers, attracts new hires, lowers the turnover rate, and as whole, will sharpen the industry. Klemp explains that trucker pay at a for-hire fleet averages $54,000 a year and has a 100% turnover rate. Two private fleets, one which pays their drivers $66,000 a year and the other pays $82,000 a year, both have a turnover rate of 14% each. The difference is significant.
The idea of guaranteed pay hopes to attract new employees into the industry and the new recruiting action will lead to a turnaround as a whole.