How Per Diem Helps Trucking Companies Recruit and Keep Drivers — Driven for Success – Episode 49

So you’re advertising a higher cents per mile than the company down the road, but drivers still aren’t applying.

Maybe you’re solving the wrong problem.

Drivers don’t just compare pay, they compare how much money actually ends up in their bank account.

Welcome to the Driven for Success Podcast.

This is the podcast for trucking company owners who want to build better businesses, make better decisions, keep drivers without losing control.

I’m Mike Ritzema, your host and owner of Superior Trucking Payroll Service, where our mission is to help trucking families.

This podcast helps us complete that mission.

Today we’re going to talk about something that gets overlooked when companies think about recruiting and retention.

And that’s per diem.

Most owners just think of it as a payroll feature and a payroll tax feature.

I think it’s more than that.

I think it’s a recruiting and retention tool.

And even more importantly, it’s a trust building tool.

When owners say things like, I can’t find drivers, I usually ask, what are drivers looking for?

And I’ll get answers like higher pay, better equipment, more home time, which is every company’s generic ad.

And yes, those things matter.

But I think there’s another answer.

If drivers want to work for a company that feels like they’re getting help to be successful, that the trucking company is invested in the driver’s success.

If a driver believes that the trucking company is looking out for them, they’re far more likely to stay.

And if they believe you’re only looking out for yourself, they’ll eventually answer someone else’s phone call and be gone.

Trust is the magic of driver retention.

Drivers leave because they don’t trust the trucking company.

They don’t leave over cents per mile.

I’m not talking about 10 cents a mile because that’s very rare that that’s the difference.

I’m talking about the drivers don’t look to leave if they feel like they have a home and they feel like they’re heard and they’re trusted.

That again is the magic.

Uh you know, things like do reimbursements happen right away and without being prompted?

You know, our payroll mistakes fixed right away.

Uh do people answer the phone when they call, or are they just trying to get them off the phone?

Does the driver feel like a nuisance when they call or feel like they’re being treated as if they’re a nuisance?

All those things are where your driver retention lives.

So, and per diem fits into all of that.

Per diem is really a raise without a raise.

Now let’s look at two companies that pay the same mileage rate for the same freight in the same truck.

And one offers per diem and the other doesn’t.

The driver is going to look at that.

A driver that knows about per diem will look at that, and they’ll see no extra freight and no extra miles and no extra work, but extra money in their paycheck.

And that’s what the company they’re going to go work for.

Per diem is one of the few ways you can give many drivers a better paycheck without raising their pay rate and raising their cost to you.

And that’s powerful, especially in today’s market.

We’re starting to see that drivers are starting to become a little more scarce.

I’m starting to see those driver shortage articles come up again.

Even though I don’t believe there’s a driver shortage, I do believe that there’s a shortage of companies that treat drivers they want to be treated.

And so if you can be one of those companies that treats them better, drivers are going to come to you.

That’s again, just do those things for them.

We’ve talked about it in previous episodes about how Per Diem works and all these things, and it’s tax treatment, but it’s also showing the driver that you’re in it for them.

Now let’s talk about recruiting.

So you’re interviewing two drivers, and one of them asks, what makes your company different?

Most fleets answer, oh, we have great equipment, we have a family culture, which I know they mean well, but saying it and doing it are two different things, and some people have family issues, so maybe that’s not always great.

We have great dispatch, we have good home time, we have whatever, right?

Imagine instead of saying all those things, which by the way, they’re going to have already observed that if they’re talking to you, they’re going to know some of that already, saying to them, we’ve designed our payroll systems to help you keep as much of your money as you can.

That’s a whole different calculation.

And that makes it memorable.

That tells the driver, you know, we’ve spent time thinking about how all these things affect you, and we’re here to help you.

And drivers remember the companies that help them keep more of their money.

Now, this is such a big recruiting advantage.

This should be in your ad.

If you’re already paying per diem, every one of your driver ads should say something to the effect of, we pay per diem to the maximum allowed by the IRS.

It should be right there because the drivers, not every driver is going to know what that means, but the drivers that do are going to come to you versus the other trucking company who does not mention it.

You’re going to be the one that they call, you’re going to be the one that they reach out to instead of this other trucking company that doesn’t mention it, and then they have to ask.

It’s one more line in the driver ad.

We don’t pay by column inch anymore for ads.

If you’re under 50, look up what column inch meant in newspapers.

But you know, that’s not how it works.

So you just drop it right in there.

And yeah, we pay as much per diem as we can.

That tells they that not only does it tell the driver that they’re going to get more in their paycheck, but it also gives them a signal that we’re in it to help you, we’re in it to help you keep your money.

Uh, too many times the conflict is between the driver and the company.

And so if the driver makes more money than the company makes less money, or if the company makes more money than the driver makes less money, there’s always that push and pull, right?

This is that case.

This is the one case where that’s not true.

Where it’s the driver and the company both are together and we’re pulling against the IRS.

And that’s what makes it the win.

So show the driver that you’re on their team so that they’ll join your team.

You know, recruiting gets attention.

We all talk about driver recruiting.

If you look for consultants in trucking, you will see a number of driver recruiting consultants, and I’m sure they bring value.

I’m not disparaging any of that.

But retention is where the money is.

Every driver you don’t lose, it saves you recruiting costs, it saves you training costs, it saves you getting to know them and orientation, all that time and effort, all those pay all that paperwork you got to do, and all the lost productivity and the loss of the empty truck between when the driver quits and the next driver comes in, let alone dispatcher frustration and all these other things.

So if per diem helps even a handful of good drivers to decide to stay, that pays for itself many times over.

Kind of funny to me have to say it that way, but it didn’t cost you money in the first place.

And so not only are you winning on the tax savings and on the work comp savings as a trucking company, but you’re also winning in driver recruiting and retention.

I mean, you’re just winning all over the place, right?

That’s that’s the goal.

Let’s let’s make the things that we can win at, let’s win them.

Uh you know, especially because implementing pre diem doesn’t cost thousands of dollars.

It simply requires doing this correctly.

And you can do it yourself.

I mean, we’d love to help you, of course.

Obviously, I own a payroll service that helps trucking companies.

We’d love to do this for you, but you can do it without us.

And keeping one good driver is pays for the cost of implementing pre diem many times over.

You know, not and not every driver will stay because of pre diem.

I don’t want to oversell this as you know the magic cure-all for all of your trucking company’s issues.

It’s not.

But if you can save a few drivers, if you can recruit a few drivers more effectively, that can make all the difference.

It makes your life so much easier.

I remember talking to a trucking company owner years ago, and he was talking about getting rid of 20% of his trucks and getting rid of 20% of his drivers because they were the ones that he had to spend all his time on.

And, you know, just imagine if you could, that 80%, if you can keep more of that 80% of the ones that he liked, because you’re doing things like paying per deal, which he switched to and he kept them.

But just doing that, you know, keeps those happy drivers happy and keeps the drivers that you that you rely on and that you enjoy working with, keeps them around.

Those are the ones, man.

You keep one more of those, even that’s a good day.

So I don’t want to I love Per diem.

I think it’s great.

I think every trucking company that has over-the-road drivers should do it.

But I also want to be realistic.

Per diem doesn’t fix bad management, it doesn’t fix broken trucks, it doesn’t fix dispatchers who aren’t good at communicating, and it doesn’t fix payroll that’s always wrong.

Like, you know, if all these other things are broken, the drivers won’t trust you.

And if the drivers don’t trust you, per diem won’t save you.

So let’s be clear about that.

It’s not the the cup from the holy grail from Indiana Jones.

But if you’re already trying to build a great company, and if you’re listening to this podcast, hopefully that’s your goal.

That’s who we’re trying to do this podcast for.

People trying to build a great company.

It’s another way to prove you’re looking out for your drivers.

Per diem doesn’t create trust, it reinforces it.

You know, you see it all the time.

You know, the drivers will see companies that tell you all these things about how great they are.

They’ll tell you about what we do for you, they’ll tell you about all these things, right?

That’s usually in the recruiting.

But the drivers have done this before, and they’re going to want to see action.

They don’t want to see a sign that says we believe in good company culture.

They want to see what that means.

They want to see that, yes, we pay per diem.

Yes, we have a retirement plan.

By the way, retirement plans are low-cost retention tools.

If you don’t have one, you should have one.

Uh, the drivers that want to put money into their own retirement of the drivers are going to be lower drama for you as a rule.

Okay, end of rant, about that.

But the drivers want to see it.

They don’t want to hear it.

They want to see that you’re doing these things.

They want to see that you’re concerned about their well-being.

They don’t, they don’t just hearing it is empty words, and it actually erodes trust when you say you have things that the drivers don’t feel that you have.

Uh, I talked about this the other day on LinkedIn about connecting with your drivers.

There’s a difference between you saying that you connected with your drivers and the drivers feeling like they were connected with you.

It’s what the driver thinks that matters because they’re the ones that can choose to leave.

And here’s part of that too: the the thing that a lot of owners miss.

Drivers talk.

We all know that.

You that any owner knows that.

At truck stops online, social media groups, Facebook groups, whatever you want to do.

TikTok, by the way, shout out to TikTok.

I get a lot of good uh engagement there.

The drivers are engaged and they’ll talk to me about things.

So that’s fantastic.

You know, so when someone asks, hey, what’s it like to work at that trucking company?

You know, they’re not going to give them that recruiting sheet that they read that says great home time, great whatever, great equipment, family atmosphere.

They’re going to tell you, they’re going to tell that other driver, you know what?

Those guys treated me right.

Whenever there was a problem, they fixed it, they made me feel heard, they explained it to me, they helped me save money, they’re helping me save for my retirement, they’re helping me with all these things, right?

That’s what they’re going to, that’s what they’re going to say to the other driver.

And that’s your best recruiter right there.

Your best recruiters are always the drivers who already work for you.

Because not only will they tell the other driver how it is, and it will be much more believable than you telling them how great you are.

Right?

I it it makes sense, you know, that the a driver who’s living this experience will be able to better communicate to another driver in a believable way that you’re a good person to work for.

But, you know, it’s that’s where your culture is.

You know, we talk about company culture from time to time.

Your company culture is what the drivers think it is, it’s not what you put on the board.

So getting the having those drivers that recommend you is such a win because not only that, if the driver recommends you, and if it’s a driver they know, they’re only going to recommend the ones that would fit in if you’ve built a culture of performance, if you’ve built a culture of this is how we do these things, this is what we tolerate, and this is what we don’t, and we have clear boundaries.

They’re not going to recommend a driver who they think is going to be a screw up.

They’re only going to recommend good drivers.

And by the way, a nice little recruiting tip is to pull your best drivers, the drivers that are the lowest drama, the most professional, pull them into your office if you’re the president or executive at the trucking company, and just say, Hey, you are a fantastic driver.

We want more drivers like do you know anybody?

Make it personal, make it a favor.

And they’ll they might know somebody.

And if they recommend them, then they’re going to make sure that that driver holds up to the standards that you’ve set.

And that is such a win.

If you get nothing else out of this podcast, that’s enough of a win right there if you didn’t do that before, even though I still say per diem is fantastic.

But per diem’s, it’s not just about taxes.

It’s about showing drivers that you’re paying attention and that you’re trying to maximize their paycheck.

That you’re willing to do just a little bit of extra work so that they can take home more money.

Will every driver choose you because of it?

No.

Will every driver stay because of it?

No.

But some will.

Recruiting and retention are rarely about one thing.

They’re about stacking small advantages.

And per diem is one of those advantages.

When drivers believe you’re looking out for them, they start looking out for you.

And isn’t that clear the kind of driver you want?

That’s the kind of driver we all wish for.

If you found today’s episode helpful, I’d appreciate if you’d subscribe to the podcast, leave a review, and share this episode with another trucking company owner.

And if you’re wondering whether Per Diem is right for your fleet or whether you’re doing it in a compliant way, we’d be happy to help.

Visit us on the web at truckingpayroll.com.

Give us a call, send us an email.

We’d love to help you build a payroll system that works for you and your company and your drivers.

So, next episode, we’re going to talk about next the IRS and what they have to say about this and what you want to do if the IRS comes calling.

It’s probably more for the finance people, but it’s for the owners too.

So we look forward to talking to you next week.

We’ll see you then.