Surveys reveal that fleets under the Electronic Logging Device (ELD) rule are driving fewer miles since the mandate took effect, resulting in less productivity and a smaller paycheck for those drivers who are paid by the mile. Meanwhile, the nationwide driver shortage only exacerbates the issue. We all know drivers’ duties include more than just driving the vehicle, to varying degrees and depending on the application. Is it time to pay closer attention to the non-driving part of a driver’s route or workday, and rethink compensation accordingly?
The term “activity-based pay” isn’t new; you may be more familiar with the terms productivity- or performance-based pay. Whatever the nomenclature, the idea assumes greater importance today, as fleet operators are increasingly tasked to find greater efficiencies in routing and shipping processes and fleet-related activities in general. As well, technology allows us to measure productivity more precisely than ever before.
Most for-hire drivers are still paid by the mile, while most private fleets use an hourly rate. Some pay per delivery. While many schemes incentivize for productivity in some form, reorganizing any of them to focus primarily on productivity is a considerable undertaking. How and where do you start?
The first step is to look at the key factors that determine your profitability and how your drivers contribute to that bottom line, says Jerry Robertson, CTO at Bolt System, a provider of fleet management and trucking dispatch software. The next step is to understand all activities — to a level of detail you may not have considered — on a route or during the driver’s workday and come up with a plan to measure each activity.
What should be measured? In addition to daily start and end times, details can be captured around each stop such as travel time to and from each stop, pre- and post-trip inspections, arrival time compared to scheduled time, time spent on a loading dock, number of parcels delivered, condition of merchandise, and even fueling and paperwork.
Recording and analyzing this type of detail involves technology, from full-blown telematics systems and mobile workforce solutions to smartphone apps, but it doesn’t have to be expensive. Apps in this field are available for GPS-enabled smartphones and tablets. The tech-enabled could write an app in house, Robertson says.
Integrating the data to stream into your office systems is a bigger task, Robertson says. However, the hardest part will be deciding what to measure, particularly as 10 routes run by 10 different drivers will deliver 10 different scenarios. The key is to understand the measurements for each route and set a baseline.
Patterns will emerge from each route, which will provide insights into why certain issues are reoccurring, Bolt says. Better or worse performance will become apparent quickly, conjuring the adage that 20% of employees do 80% of the work. But if you can measure it, you can reward that 20% and nudge the others in the right direction. “If you’re monitoring events that drivers are now getting paid for, your drivers are more likely to do them in a timely fashion,” Robertson says.
The system must be able to record anomalies and circumstances beyond the driver’s control, such as breakdowns or delays at a location. “At least now you can identify the issue,” Robertson says, adding that consistent problems identified generating from the customer may lead to a decision to cease doing business with that customer.
As with the introduction of any new system, driver buy in — before deployment — is crucial. Fleets must have a clear sense of what they hope to accomplish and communicate these goals to drivers. Focus on the positive: Help drivers understand they could be better compensated by including non-driving activities, Bolt says.
“Will you solve everything? No,” Robertson says. “Will you go a long way toward your drivers having a better expectation of how they’re measured to get paid? Yes.”
It’s no secret that the job title of “driver” is facing disruption. The daily duties of a driver are transforming into areas other than miles traveled behind the wheel. It’s essential to capture, measure, and understand these events now, as these non-driving duties will only increase until the driver job title itself may someday no longer exist.
Related: ELD Compliance for Small Fleets