Pay tactics are distributors' main choices for recruiting, retaining drivers

Dive Brief:

Incentive compensation is the top strategy used by distribution companies to attract/retain drivers, according to a survey by the International Foodservice Distributors Association. The survey was taken by 272 firms representing 818 locations, 384 of which were foodservice distribution locations.
Median base compensation for Class A CDL delivery drivers with no helpers in the West region of the U.S. was highest of the four regions (Northeast, South, Midwest and West) last year at $57,122. But the West had the lowest median gross compensation at $62,063. The South had the lowest median base at $48,667, while the the Northeast had the highest median gross compensation at $63,813.
Finding qualified employees, including drivers and warehouse workers, was the top concern across industries, the survey showed. Retaining employees was No. 2.

S.L. Fuller/Transport Dive, data from the International Foodservice Distributors Association

Dive Insight:

"As the recovery has accelerated faster than most had thought it would, strong demand continues to put an enormous strain on the supply chain," IFDA wrote in the report, recommending companies use it to evaluate pay and staffing needs to meet this demand.

To stay competitive, trucking firms across segments have raised driver wages and bolstered benefits when possible.

A study from Tenstreet and Stay Metrics (the former acquired the latter last year) found sufficient pay is the top factor in retention for male and female drivers.

"Many drivers believe the shortage and compensation are inextricably linked, and that the only solution to recruiting and retaining drivers is to increase pay or modify compensation models," according to a report released by the American Transportation Research Institute last year.

The driver shortage has long been an issue for the trucking industry. But added constraints currently stem from heightened demand and detention and equipment shortages, as well as workforce shortfalls.

And those workforce shortfalls aren't limited to just drivers. The trucking industry also faces a shortage of diesel technicians. It will need to recruit up 200,000 diesel technicians over the next decade to keep pace with the need for such workers.

According to IFDA's survey, median annual gross pay for diesel technicians is highest in the Northeast region, at $56,181. It's the lowest in the South, at $49,260.

"In general terms, regional variances of wages are due to a number of factors such as local cost of living and local availability of applicants for a particular type of position. For example, if there are fewer candidates than open positions in any given location, compensation may be higher than other locations where the labor supply matches workforce demand," IFDA Director of Research and Industry Insights Annika Stensson said in an email.