How Much Does it Cost a Company to Hire a Driver?

Discussion in 'Questions From New Drivers' started by insipidtoast, Jan 31, 2023.

  1. insipidtoast

    insipidtoast Heavy Load Member

    Nov 22, 2016
    Planet Earth
    Let's say a new driver fresh out of cdl school
    vs. a driver that has a couple years of experience.

    How long would each driver need to work at the company for the company to break even on their investment?
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  3. tscottme

    tscottme Road Train Member

    Jul 25, 2008
    Nashville, TN
    Let me google that for you!
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  4. ducnut

    ducnut Road Train Member

    Dec 31, 2010
    Depends on the thoroughness of the pre-employment stuff, then, training. Basics are an easy $3K. Add in training and that number could easily go beyond $10K.
  5. Espressolane

    Espressolane Road Train Member

    Nov 21, 2009
    Just south of the north 40
    Let’s start with a fresh CDL school grad.

    No outside recruiters.
    Most companies right now offer some form of sign on bonus. The average is about 3k, paid over time. This is a liability from an accounting point of view, so has to be considered at the start, even paid over a set period of time. Same as vacation pay, the cash has to be made available.

    Application processing is in the range of $2500. This will include running a background/public records check, employment verification and an MVR report, plus an insurance check. Now required is a PSP and clearinghouse check. May also include a credit report. These all have small fees, plus the cost of the time a company person is taking to do the work.

    Once that is cleared, then the employee orientation. The company may cover the cost of transportation to its facilities, hotel for the orientation time, pre-employment drug screen, possible new medical certification. Most companies have an orientation pay, like $750.00 for the week. Then you have to factor in the company people who will over see the process. This could easily add another $4000 to $5000.00

    Today, it seems most companies run a driver training program of 6 weeks, with a guaranteed weekly pay. Average seems to be $750.00. plus employee overhead of 35 percent. Most trainers get additional pay for training. Know one that is $200 a week.

    When training, does the new driver stay in the truck or in hotels for 10 hour breaks? This could easily be $100 per stay, $500 to $700 per week.

    So now you have a driver ready to go work a truck. Over the next 6 months, this will be a less than efficient worker, still learning, so reduced revenue, that will get better over time. plus the time that may be needed to mentor this driver by someone, usually the Driver manager and the trainer. There is a cost to this, it can be very hard to quantify. Some will need very little others more.

    This could get into the $25 to $30,000 range real quick.

    At 30k, when that new driver starts working, the truck needs to make an average of $2500.0 per month over the corporate cost of operation for 12 months to cover the cost of hiring this driver.
  6. kemosabi49

    kemosabi49 Trucker Forum STAFF Staff Member

    Jan 13, 2013
    SW Arkansas
  7. Midwest Trucker

    Midwest Trucker Road Train Member

    Aug 31, 2018
    Really IMO for me personally as a small 10 to 12 truck carrier the highest cost is advertising openings and having trucks sit idle. I don’t hire anyone under 2 yrs experience and I don’t think have hired anyone under 4 or 5 yrs. The actual process of hiring is probably less then $1000 but when you add in advertising and down time it’s in the 10’s I’d thousands no doubt. Take down time out and it’s probably $5000

    The frustrating part is running all the checks, interviewing, drug tests, and then still flaking out. Anyone who applies we run the checks on before interviewing. If you hire out of state drivers it becomes a lot higher for sure in getting them to your yard and then I’d course if you have a long drawn out orientation and training that would add a lot. I try and hire only pros that need very minimal anything prior to starting but then that does increase advertising and down time. However, that decreases the bs and damage you inquire by hiring noobs.

    It’s all a big trade off and how you want to run your operation.
    D.Tibbitt, tramm01, nredfor88 and 4 others Thank this.
  8. Aamcotrans

    Aamcotrans Road Train Member

    May 24, 2016
    Strasburg, Va
    It may be $10k in accounting dollars, but no where in that ball park in real dollars

    DRTDEVL Road Train Member

    Jan 27, 2013
    Austin, MN
    Advertising is the biggest expense, so a company has to seriously evaluate how much they are willing to spend per hire. The more a company spends, the less they have left to pay their drivers, so that is an immediate red flag. You all know the companies that have advertisements literally everywhere; that's for a reason. Its a self-fulfilling prophecy in a way, advertise more = get more drivers, but also = less money for driver pay and benefits resulting in higher turnover which = spending more in advertising.

    Good places find a balance with a Small Recruiting department and putting actual man-hours into finding the appropriate driver for the vacancy. The right person in the position = lower turnover and lower vacancy rates which = less money spent on advertising and more available for the drivers.

    As for how much advertising is spent per hire? That's a loaded question. Most years it costs us about $5-600 per hire, others more, others less. This year was insanely high, as we experimented with a different type of company that cost significantly more money yet only yielded 2 hires. The next company cost 60% of the cost and resulted in 12 hires. Most of our good hires are actual referrals that cost us the referral bonus.

    Next expense: Processing their file. Fees for everything from the MVR to PSP to Clearinghouse to third party background services average about $100 per hire. Add on the cost of the drug screening (varies by contractor) and the occasional needed DOT physical (varies by contractor), and this can exceed $200.

    Then transportation. $300-1000, depending upon method and location.

    Then lodging. Our contract is for $99/night, so about $200.

    Finally, onboarding expenses. Payroll service time, orientation pay, fuel/use of vehicle for road test, lunches, etc. There's another $500.

    In the end its easily $2500-3500 per hire, all-in.

    This is for experienced drivers only. Newbies? Add in the costs of school or running your own school, training time with a mentor, and the inevitable damage claims in the first 90 days, and you can see why training companies don't pay very well and have longer contracts to recover their investment.
  10. wis bang

    wis bang Road Train Member

    Jan 12, 2011
    Levittown, PA
    Lots of variance in hiring costs.

    Obvious some spend a lot more than others and it a depends on each carriers circumstances.

    The larger the carrier, the more seats they have, as well as, greater pressure to keep the seats full, projected earnings is based on a large percentage of those seats staying full...shareholders and the CEO's luxury salary depend on it.

    Everyone forgot to include the 'potential' costs included in hiring and maintaining a viable driver.

    When I was starting out, every accident required a report to the DOT, a simple one page form.

    It asked 'to the nearest year; how many years experience with the carrier so from day one to day 365 it was one year for any hire.

    The DOT was confirming it's studies that, despite years of experience; most drivers have an accident during their first year on board.

    These costs should be considered when accounting for the cost of bringing in any new drivers and you can bet that some where, some MEGA has a room full of bean counters doing just that.
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