Many trucking companies offer jobs with high sign-on bonuses when they need to fill a position. These bonuses are often many thousands of dollars and advertised on job ads. While these bonuses may be enticing for a truck driver, they often come with many strings attached.
Understanding the pros and cons of sign-on bonuses is essential before you leave your trucking company for the promise of a lump sum of cash. You don’t want to give up a good job for the bonuses only to realize it’s not all it was cracked up to be.
Let’s get into the nitty gritty of truck driver sign-on bonuses.
What is a Sign-On Bonus?
A trucking sign-on bonus is an incentive program that some hiring managers use to entice drivers to work for their company. It is a specific amount of money that is promised to the driver if they accept the position and agree to the company’s terms.
The amount of money from the bonus varies by company but will often exceed $1,000. Experienced drivers may be offered more significant bonuses due to their amount of time and safety over the road.
While sometimes the trucking company pays this signing bonus when the employee starts, it’s not usually the case. More often than not, trucking companies will only give the bonus after a specific time to ensure that the truck driver stays with the company.
Why Do Trucking Companies Give Sign-On Bonuses?
The transportation industry is experiencing a driver shortage, so trucking companies require drivers to fill their open positions. Some driving companies offer these monetary incentives to new truck drivers. With high driver turnover rates, these companies must maintain a steady supply of drivers.
Sign-on bonuses help alleviate this struggle because offering more money brings in more drivers. Over-the-road driving is a difficult job, and drivers will not settle for low pay. They want to choose a company that can compensate them appropriately.
Attract New Drivers
New truck drivers often want to work for trucking companies that offer them high sign-on bonuses. Sign-on bonuses are an excellent way for trucking companies to advertise their available positions through job ads for this reason.
The higher the sign-on bonus, the more attractive the position will be to a driver. A new driver will want the assurance that the company can afford to pay them, and a high sign-on bonus communicates this better than a low or no sign-on bonus. This makes high bonuses an excellent recruitment method.
Address Driver Turnover
Driver turnover rate is the rate at which drivers are leaving their employment. A high turnover rate means that the drivers leave their positions frequently and must be replaced to maintain a workforce.
Drivers usually go from company to company looking for the best fit. Trucking companies need to be sure that they stay competitive in the industry with the rates and incentives they offer drivers.
High turnover rates are a common issue in the trucking industry, so companies must have structures to avoid a supply chain shortage.
When a driver leaves, the company needs to replace them quickly, which is something a high sign-on bonus can accomplish. This quick replacement prevents the company from having to be understaffed while they seek new drivers.
Pros and Cons of Trucking Sign-On Bonuses
Sign-on bonuses can be beneficial for drivers! They have a lot of great perks and can give you peace of mind.
However, you should be cautious about getting caught up in a big number before realizing what they mean.
Here are some things to consider when evaluating a sign-on bonus.
Pros of Sign-On Bonuses
Make more money past your base CPM
Trucking companies offer a cash bonus, which is money earned in addition to your base CPM. This money can go directly into your pocket or towards different needs you or your family may have.
Kickstart your career with a new trucking company
A sign-on bonus is excellent for truck drivers to kickstart their careers in the trucking industry. This can allow you to start with money in your pocket instead of waiting until after you get on the road.
Gets new drivers out on the road
The trucking industry needs drivers on the road to prevent supply chain issues, and a cash bonus gets new drivers out on the road. New hires can ease bottlenecks and help companies keep moving.
Increases driver retention
Companies that offer a bonus can often increase driver retention as the drivers get paid enough in their first six months. This pay helps drivers to feel more secure with their company and less likely to leave.
Cons of Sign-On Bonuses
Many stipulations and fine print
Signing bonuses are a considerable expense for a company, and this means that there is a risk. Trucking companies will often include many stipulations and details with the bonus to avoid this. One example is that a driver who leaves within their first six months may need to pay back the bonus.
Total sign-on bonus is not always received
Different fine print exemptions can result in a driver not receiving their total sign-on bonuses. Truckers could sign on expecting a particular bonus and only receive half.
Cash and Dash
A trucking company’s risk when offering a sign-on bonus is cash and dash. Cash and dash happen when a driver accepts a cash bonus and then quits after being paid.
This is a considerable cost to the company and delays how quickly they can fill jobs.
Can hurt employee morale
Offering sign-on bonuses can hurt employee morale when some are offered a bonus while others are not. For example, some internally filled positions do not have bonuses, but externally filled positions do.
Tips for Reviewing a Sign-On Bonus: Is It Worth It?
Determining if the sign-on bonus is worth transferring companies can be overwhelming. You want to be sure you choose the best fit for you without being trapped in terms and conditions.
When you are considering accepting a sign-on bonus, take the time to read the terms and conditions. Every sign-on bonus will have varying requirements that you will need to fulfill to obtain the bonus.
You want to be sure that you review these terms in depth so you do not miss a requirement you cannot fulfill. If you accept these terms without knowing what you need to do, you could decide that the bonus is not worth it.
Here are some tips to help you review everything you need before signing on to a company for the bonus.
When do you receive your sign-on bonus?
The timing of the bonus is different for each company, and it is not always paid when you first sign on with the company. This is to reduce the cost to the company that can happen when new hires take the cash and leave.
Some trucking companies will offer the signing bonus in installments after you have stayed with them for a set amount of time. This could be anywhere from six months to several years.
It is essential to be aware of the payment schedule for the bonuses before you sign on. You don’t want to expect thousands of dollars only to find out you only have access to half.
Are there pay contingencies?
Pay contingencies are a common aspect of signing bonuses that you should be aware of. One common pay contingency is performance. Companies may require that you drive a certain number of miles before receiving your bonus.
Other contingencies that may be part of a sign-on bonus include safety records, certifications, or documented experience. Trucking companies offering bonuses often have positions that are difficult to fill. This could mean that you need extra endorsements
A company that needs a driver with a hazardous materials endorsement may offer a sign-on bonus with the contingency that the driver obtains that endorsement. This could prolong when you get your bonus as you earn the needed certifications.
What is your starting pay?
It is easy to get excited about the sign-on bonus and not look at your starting pay with the company. You need to look at what your base rate will be as well as what your sign-on bonus will be.
Your base rate is what you can rely on. This is what you will be earning while driving for a company outside of the signing bonus. It is critical to determine if the company will be paying you enough to support you and your family if you have one.
When deciding if the bonus is worth it, look at the average pay from other companies. Make sure that the company offering the bonus will pay you more overall.
While sign-on bonuses are exciting, they are a one-time perk, and the incentives are not always worth the jobs offered.
Have you read the fine print?
There may be more job conditions and limitations on benefits like sign-on bonuses, paid vacation, or home time. Hence, reading about the benefits you care about is essential. You want to be sure that you understand the full scope of what you are getting.
Taking the time to understand what is being offered to employees will help keep you informed and help keep employers accountable.
It may be annoying, but it’s worth it! You don’t want to be caught off guard by a job that seemed like a dream.
What to Expert from ShipEX Sign-On Bonuses
Unlike many trucking companies, ShipEX does not offer sign-on bonuses. We believe in providing long-term stability and financial security to our drivers, which is why we offer a true salary of $62,500, paid weekly. This consistent pay allows drivers to plan for the future without the uncertainties associated with CPM pay, where factors like weather and dispatch delays can affect earnings.
At ShipEX, we also offer monthly performance and safety bonuses as part of our commitment to rewarding excellence. These bonuses provide ongoing financial incentives, ensuring that our drivers are recognized for their hard work every month.
Ready to join a company that values your long-term success? Explore our truck driver jobs at ShipEX and take the first step toward a stable, rewarding career.
