Aug 11, 2023

How to Maximize Rewards Programs to Improve Truck Driver Loyalty

In today's competitive marketplace, retaining top talent is a key driver of success.

This is especially true in the trucking industry, where drivers form the backbone of the operation. While offering competitive wages and benefits packages is a critical component of attracting and retaining drivers, it's not always enough to engender true loyalty.

That's where rewards programs come in. Designed to incentivize drivers to go above and beyond, these programs can be a powerful tool for improving truck driver loyalty.

However, not all reward programs are created equal.

In order to maximize their potential, it's important to understand what motivates drivers to participate in these programs, and how to structure them in a way that drives engagement.

This blog post will explore the key elements of successful rewards programs, including the types of rewards that drivers find most compelling, the role of technology in program design, and best practices for program administration.

Oh yes! Driver Loyalty Program or Driver Rewards program is a must-have as it also impacts your overall operating costs in the long run. 

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What the Trucking Industry Currently Faces When it Comes to Driver Incentive Programs

Again, the transportation industry faces an ongoing challenge in recruiting drivers, but the greater struggle lies in retaining them. In fact, driver retention proves to be a crucial and complex task.

It involves understanding driver behaviors and what triggers their driving habits or even risky behaviors.

In an effort to mitigate the issue of high turnover rates, transportation carriers have turned to driver reward programs as a popular method of incentivizing their drivers to remain employed with them.

These internal rewards programs are a common practice for carriers to acknowledge and appreciate their employees for achieving certain targets. Just like any other profession, when drivers are recognized for their dedication and hard work, it fosters a sense of job satisfaction and motivates them to strive towards larger organizational goals.

This, in turn, contributes towards the growth and betterment of the business whilst simultaneously boosting overall employee morale and contentment.

According to Brian Runnels, the VP of a freight insurance agency in Tennessee, trucking companies are implementing various incentives to retain drivers and boost their earnings. These incentives may include rewards for longevity, referrals, safety, or other factors.

The aim is to encourage drivers to stay with the company and maintain high levels of performance. As a result, carriers are working hard to create a supportive and rewarding environment for their drivers, which ultimately benefits both the drivers and the companies they work for.

The 5 Key Things Carriers Need to Know to Implement an Effective Rewards Program

1. Set Attainable Goals

In order for a reward program to effectively motivate employees, it is crucial that the goals set by fleet managers for achieving bonuses are attainable and realistic. This will impact the drivers therefor impacting the other end of the customer lifetime

It has been observed that some companies offer operational bonuses that are impossible for the majority of employees to attain, which defeats the purpose of the program. For instance, incentivizing drivers with a 2-cent-per-mile bonus for driving a safe distance of 3,000 miles per week may be unachievable for most drivers. Instead, if the company reduces the requirement to 2 cents per 2,000 miles, it would encourage more drivers to strive towards achieving the bonus. Therefore, setting realistic goals is key to the success of a reward program.

The importance of maintaining high qualifying standards to ensure that only deserving individuals receive bonuses. It is imperative to avoid rewarding those with a history of crashes, violations, or citations.

Nevertheless, the qualifying criteria must remain feasible and realistic.

2. Ensure that incentives are of substantial value

When considering implementing a rewards program for drivers, it is crucial to ensure that the incentives offered are commensurate with the time and effort required to achieve them.

Failure to do so may result in minimal participation and, in some cases, even damage the company's reputation among drivers, potentially leading to negative outcomes. As such, it is essential to carefully analyze the effectiveness of such programs to ensure that they achieve their intended objectives.

3. Consistency is Important

It is advisable that bonuses or gifts are disbursed on a routine basis.

While a company may consider various criteria for rewarding its employees, such as time, tenure, and mileage, it is crucial to maintain a consistent approach.

Regrettably, many businesses initiate a rewards program but subsequently abandon it. Rather than relinquishing the program, Runnels suggests modifying the frequency of bonus payouts, such as transitioning from monthly to quarterly disbursements.

4. Take into account the method by which bonuses are disbursed

Rewards are out of the ordinary. They recognize drivers for going above and beyond. Because of this, Runnels advises that putting a monetary bonus on a regular paycheck may not be the best approach. While it requires more effort to cut a separate check or send a gift card, he believes it is more impactful.

When the paycheck is direct deposited, the driver most likely won’t see the bonus.

It's essential to keep in mind that supplemental wages are subject to taxation. Businesses need to take into account the net pay that employees will receive after taxes and the impact this will have. For instance, a driver who is promised a $100 bonus will likely appreciate receiving the full amount instead of only $78 after taxes, given that supplemental wages are taxed at a rate of 22%.

To ensure that drivers receive the promised bonus in full, carriers may want to consider increasing the pre-tax amount they pay, effectively covering the taxes for the driver. In the example provided, the employer may choose to pay around $128 so that the driver can take home the full $100 bonus. By doing so, companies can foster a positive work environment and strengthen employee morale.

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5. It is not always about the money

Expanding the scope of your incentives beyond financial gains can lead to a more fulfilling and well-rounded experience. Consider alternative forms, like insurance premiums, trucker tools freebies, or simple ways of gratification to bolster motivation and satisfaction in both professional and personal endeavors.

Aside from monetary compensation, recognizing the efforts of drivers can go a long way in boosting their morale and job satisfaction.

Offering physical gifts such as company-branded merchandise like hats, jackets, and shirts can make a business stand out. In some cases, drivers may even receive rings for reaching a milestone like driving 1 million miles.

Simple gestures like putting a driver's name on the side of the truck after a certain period of service can also make a significant impact.

Larger incentives like cruises or trips and annual company gatherings can help drivers feel valued and appreciated as part of a team. It's important for carriers to explore various ways of recognizing and rewarding their drivers beyond just financial compensation.

When a concerted effort is made by the passenger, the driver will reciprocate with equal effort. This can potentially initiate a positive feedback loop, leading to an overall improvement in the driving experience.

In Conclusion

In conclusion, trucking companies looking to improve driver loyalty and retention should consider implementing rewards programs that offer both tangible and intangible benefits to drivers.

By offering incentives such as cash bonuses, merchandise, or personal time off, companies can motivate drivers to perform at their best while building a culture of appreciation and recognition. With the right rewards program in place, trucking companies can not only attract new drivers but also retain their best talent, creating a mutually beneficial relationship that can last for years to come.

If you want to stay updated with the current trends in the trucking, freight, and logistics industry, stay connected to us.

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If you are looking for more information about drug and alcohol testing as a truck driver, visit LabWorks USA. Our DOT Consortium's friendly team will be more than happy to discuss any concerns you may have and work with you to ensure you are always fully compliant specially with random DOT drug and alcohol testing pre-employment testing. Moreover, if you need help with FMCSA Clearinghouse registration, we can further support you.