Trucking Company Compensation

Trucking_Company_Compensation

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Experience Matters

Developing compensation plans for trucking companies requires a rock solid understanding of the intricacies of freight movement through the United States and an awareness of the many different types of trucking companies. Prosperio Group has worked with more than 50 different trucking companies developing incentive plans for almost all roles you can imagine within a trucking company – from sales to recruiting to maintenance and safety, and of course, drivers.   

This experience has taught us the difference between a for-hire truckload carrier (OTR) and an LTL carrier working with regions and relays across the country, with both shuttle and line haul drivers, to private fleet operations.  We have worked with temp controlled carriers, and very specialized carriers who only use flat bed or other specialized equipment.  While there may be other consulting firms that have worked on some of the major carrier sales compensation plans, no other firm has worked with as many different types of trucking companies on variable pay for as many different types of roles.

Weekly Piece Rate Plans

There are a couple very prominent trucking companies that use variable pay (one notable one uses weekly piece rate incentives for nearly every person in the company), and while we certainly can help you put this kind of plan in place, we also work with you to ensure that this approach is right for your company.  It may be, or it may not be.  A compensation strategy must fit with and support a company’s culture, ethos, and technological capabilities.  Weekly piece rate plans require decentralized management and strong technological (or at least Excel) skills distributed throughout the organization.  It also requires a bit less concern and focus on “market competitive pay levels” as these plans can (and often do) pay significantly more or less than prevailing market wage. 

Private Fleets & Too Many Pay Codes

We can simplify and stream line your driver compensation plan, while making sure you are staying competitive with market rates.  We have revised many private fleet plans and vastly improved driver retention and efficiency.  This does not HAVE to involve an hourly pay discussion, though in some cases it may end up going there (if you have drivers in CA for example, it’s pretty hard to avoid it).  But we can consider all different approaches – miles, stops, pieces, and hours (or not) along with various performance factors.  When all is said and done, often about 25 pay codes can be eliminated from your system by having at least a small hourly wage as part of the driver pay plan. 

The Benefits

This removes having to account for detention, meetings, testing, training, road side inspections, and countless other individual events as separate pay codes in your system.  It also helps drivers feel much more comfortable with detention or delay time, since under other methods they are not getting paid for that work (unless you have a separate pay code for it!).  At a recent trucking industry meeting of OTR carriers (for whom hourly pay has been disliked for decades!) they mentioned that the rise of ELDs has made them much less concerned about hourly pay causing drivers to “milk the clock” as they simply will not be able to get away with it any more.  This means hourly pay (or some kind of guaranteed minimum pay, or even “salary” pay) may not be that far off on the horizon any longer.  Give us a shout, and we can help you sort it out!

LTL Companies 

Is your sales compensation plan working for you?  This is the highest priority plan for LTL companies, followed closely by terminal operations.  Get your sales compensation plans right first and other pieces will start to fall into place.

Truckload Carriers 

We recommend starting with recruiting, orientation, safety, driver managers, and load planners.  Make sure that all the people that deal with drivers on a day to day base are incented to keep those drivers busy and happy.  With driver turnover still close to triple digits and the end to the driver shortage no where in sight – you need to start here and then consider other roles in the organization afterwards.

We Have Your Back

If your organization is willing to tackle your compensation issues, then we can certainly help you make sure that you are paying for the most valuable results that you can get from your staff.  If you are more traditional, and favor a more centralized and market controlled plan, then we can work with you to benchmark pay levels to the market, prioritize the roles you should work on first from a variable perspective, and then ensure you are picking the right metrics and calculating pay in the most appropriate fashion to maximize the ROI on your compensation spend and ensure you are aligning variable pay with corporate profitability. 

This is not an easy process and even for medium sized organizations, working through incentive design can take several months.  We will be with you from the beginning to the end, making sure everyone on the design team(s) (there can be several) stay on task and complete the work according to the desired timeline.  We also handle all the heavy lifting of the economic modeling and can even help put in place fairly sophisticated Excel tools to help you calculate incentives, manage the cost, and analyze the return you are getting for what you are spending.

Common Project Types

Express Design Project

When your needs span several roles but you have only a few people and will not have much of an issue with change management, our Express Design Project is for you. We’ll spend time with you and your senior leaders in a one-day on-site meeting and complete the rest of the meetings virtually. We’ve successfully executed a number of engagements for small to medium-sized organizations (5 to 20 people) just like yours.

An Express Incentive Design Project includes:
• Compensation plan design for up to 5 roles (salary bands and incentives)
• Market benchmarking of pay levels for the 5 roles
• Plan documentation
• Pro-forma economic modeling (no historical testing)
• Roll-out training
• Strategy and structure review/refinement
• 6 months of post-project support
• Turnaround is approximately 4-6 weeks

1P1P Project: One plan, one role

A 1P1P Project is great for start-ups and small companies, and those with an immediate need for a compensation plan for one person in one role. The 1P1P Project is a virtually delivered program that’s a fast, affordable alternative to big consulting firm fees.

The 1P1P Project includes:
• All plan design details
• Basic market pricing
• Economic testing
• Incentive plan documentation
• Outlining of goals and expectations
• Review of business goals and impact of this role on those goals
• Role clarification
• 3 months of post-project support
• Turnaround is approximately 2-3 weeks

Full Service Sales Compensation Plan Design Project

When you need more in-depth assistance in clarifying business objectives, streamlining your organization structure, improving accountabilities and role definition, and are developing incentive plans for several interconnected roles for a large staff, we recommend a Full Service Incentive Plan Design Project. This solution features on-site meetings with our consultant and your design team, and is often selected by medium-sized to larger companies, or small companies undergoing significant transition.

Full Service Sales Compensation Plan Design Project includes:
• Business goal clarification
• Business strengths assessment
• Compensation plan design for all roles in scope (salary bands and incentives)
• Development of career levels for highly populated roles
• Employee change management
• Extensive pro-forma and historical economic modeling
• Goal-setting guidance
• Sales compensation plan documentation
• Market benchmarking of pay levels for all roles in scope
• More detailed Excel template for use by your staff for doing plan calculations (variable based on your needs)
• On-site roll-out support
• Organization redesign and role change/definition
• 12 months post-project support
• Four+ on-site days
• Turnaround time is at least 90 days, but may take longer depending on size of organization and magnitude of change