If you have been searching deliberately for a job as a truck driver you must have seen at least one job offer with a sign-on bonus. We know we have. And the numbers are skyrocketing – starting at around $2,000 for inexperienced drivers, and up to $10,000 for experienced. Covenant Transport went even a step further – giving out $40,000 to driving teams. But could these offers be trusted? The answer is yes and no.
Make no mistake – trucking companies do not offer sign-on bonuses out of pure generosity. With the ELD Mandate becoming a firm rule on 18 Dec. 2017, people give up their career as a CDL driver, and moreover – there are less prospective drivers, so freight companies need a new approach to attract them. The problem is that sign-on bonuses, as the term â€œsign-onâ€ implies – should be paid upon signing a contract with a particular company. This is rarely, if not even – never – the case. It is a marketing trick to attract a driver, but in order to receive the bonus, there are multiple clauses to be regarded. Moreover, the bonus is often paid out throughout time – with bits of it being paid at a time.
Therefore the correct term for it should be – â€œstay-inâ€ bonus, because this is the primary goal of transportation companies when claiming to offer a sign-on bonus – have the truck driver stay longer in the corporation. And if he wants that reward – he surely will. The cost of replacing a truck driver is estimated to be up to $20,000, although the average would be $8,500. With a shortage of 50,000 drivers in 2017 – this number will most likely double to 100,000 in 2018. Companies need drivers fast, and they need them to stay, in order to avoid the expense and hustle that come with driver turnover.
Additionally, considering the deficit of CDL drivers is increasing (since the ELD Mandate), companies need to outbid each other, and more prominent companies, or ones in a desperate need of truck drivers and owner-operator, are offering a bonus, thus making sure to be a step ahead of the competition.
Well, that depends. Most commercial freight companies will not disclose any further information on that sign-on bonus in their job offer, other than writing it in the title when posted on any job portal. Upon your interview, do not shy away from inquiring more information about the bonus and under which conditions it will be paid out.
Here are some of the possible scenarios and conditions:
Trucking companies can make up the fine print, as there are apparently no regulations on that. The mentioned above Covenant Transport also require particular conditions to be met, in order to receive the team bonus. Their program, going into effect Feb. 1, will pay $2,000 premium to OTR teams upon completion of 60,000 miles together. Each team driver will receive $1,000 – with a maximum limit of $20,000. Together the group of two could earn up to $40,000. It sounds good but if we regard the fact that an OTR team drives an average of 4,000 miles per week – each driver will get $1,000 bonus roughly every 15 weeks.
What you need to be aware of, is the fact that they can mix up the mentioned above â€œclausesâ€ making it more difficult or sometimes – nearly impossible- to receive that bonus. Throughout your interview and upon signing a contract you need to be extremely careful and read the fine print. The good news is that we at CDL Advisor.com will be doing all the investigating for you, and will let you know in advance which truck driver job ultimately fits your needs and offers more money. We will be asking our transportation companies all the right questions, doing the math for you, and looking out for your best interest.
Often companies must offer benefits and health insurance to company drivers (but not to owner-operators), and they might be offering you fewer benefits, or less pay per mile or hour if you have a sign-on bonus. This way it may seem that you are a couple of thousand dollars ahead, when in fact that deal might be losing for you. You need to be able to do this simple math to really know if youâ€™d be better off taking the offer of a company with a signing bonus or the one offering a better pay per mile.
If the bonus from the XXX Trucking company is received at the end of the first year – then the salary incl. that bonus for the first year will be:
2,500miles (average per week) * $ 0.48 * 52 weeks in a year = $ 62,400 + $2,000 (signing bonus) = $64,400 earned in the first year.
Now letâ€™s regard the numbers of the LLL offer, with no signing bonus:
2,500miles (average per week) * $ 0.50 * 52 weeks in a year = $65 000
As you can see, one can easily be deceived that the first offer is better than the second one. Most people would see the $2,000 sign-on bonus, thinking they get it up-front and will regard the difference of â€œonlyâ€ 2 Â¢ as insignificant. When in fact this 2cpm not only earn you more money (despite the bonus offered by the other company), but it is even more likely that LLL Trucking company propose better benefits for the driver.