December 9, 2021
Sign-on bonuses ‘double-edged sword’ for recruiting and retention
Bonuses benefit drivers but can leave carriers spinning their wheels
Is it worth jumping ship for a sign-on bonus at another company?
Truckers sure think so — and with good reason. Sign-on bonuses have been getting bigger and bigger, but as carriers begin offering similar perks, at what point do cash incentives lose their luster?
That’s the topic of discussion on this episode of WHAT THE TRUCK?!? FreightWaves’ Timothy Dooner and Michael Vincent weigh the pros and cons of sign-on bonuses, welcoming Brian Runnels, Reliance Partners’ vice president of safety, to the debate.
Runnels, a veteran driver himself, understands the allure of such bonuses and agrees that they are effective in boosting driver recruiting. However, he argues they’re unlikely to boost retention and may inadvertently incentivize more job hoppers.
“Not too long ago you’d see somebody that had a multitude of jobs in a short period of time and it wasn’t somebody you wanted to hire. Now I think it really doesn’t matter,” Runnels said.
But Runnels said sign-on bonuses are a double-edged sword: Drivers enjoy them because even if they don’t fulfill the terms of the sign-on bonus at one company, they can quickly move to another one to receive a similar bonus. For carriers, however, this behavior only exasperates companies that find themselves in constant competition to offer even more money. Runnels calls it keeping up with the Joneses.
Vincent suggested that companies offering sign-on bonuses may have higher attrition rates than those that don’t offer them, explaining that drivers may be joining fleets for the wrong reasons.
“Drivers are inherently skeptical,” Runnels added. “Either they don’t read into the fine print or they just believe the fine print is going to get them where they won’t receive some of the bonus to begin with. So I don’t think it really breaks their hearts when they don’t get the whole thing and move on to another carrier.”
Dooner agreed, noting that he’s talked to many drivers this year who have been cynical about these bonuses. One reason could be how bonuses are portrayed by the mainstream media. Dooner recalled one headline that proudly stated that drivers could make up to six figures a year with one company, making it seem that any driver could qualify for this salary, whereas it was offered only to owner-operators for a specific gig.
There’s also the frustration of drivers who have remained loyal to one company for many years. Dooner suggested that cash prizes for perceived job hoppers may rub longtime employees the wrong way. Runnels acknowledged that and said that companies should focus more on improving the driver experience than on getting more drivers to come aboard, perhaps offering pay perks in other ways.
“I’ve talked to business owners that aren’t offering sign-on bonuses, and they’re not seeing a huge difference in where they were a year ago as far as drivers that were coming on board then versus what’s coming on board now,” Runnels said.
Capacity is predicted to only get tighter with the implementation of the infrastructure bill, meaning that the ball will remain on the drivers’ side of the court for a while. Carriers, on the other hand, will have to explore new ways of attracting drivers — both new and experienced — as sign-on bonuses seem ineffective in boosting retention.