Predictability and Transparency in Compensation: A Best Practice Guide

Introduction

Are your compensation practices working for or against you?

In any industry, companies who have a strategic approach to compensation will likely outperform their competitors. As trucking and logistics companies compete for market share, a parallel battle is being fought over the labour needed to service an ever-expanding market. It is no longer just what we pay that matters to current and prospective employees. How that pay is perceived and received is just as important as dollar amount. Having a comprehensive compensation strategy, that is predictable and trends towards transparent is becoming increasingly important in an industry with different pay types.

Whether you are looking to find new drivers, dispatchers and support staff, or trying to retain those already critical to your business, understanding and employing compensation best practices can put your company in the passing lane.

This guide outlines current compensation best practices supporting fleet employers of any size position themselves as employers of choice amongst prospective and current employees. Topic areas covered include:

  • The benefits of pay transparency and predictability
  • Steps to help you create a robust compensation strategy you’ll want to be transparent about
  • Best practices in communicating compensation
  • How compensation relates to key current HR trends

The Current State of Industry Compensation

In Trucking HR Canada's labour market research the following key labour issues facing our industry have been highlighted.

  1. Labour shortages, specifically for Truck Drivers, continue to be a key concern and this is expected to continue and worsen in post-pandemic economic recovery. Key factors being the aging of the current workforce and difficulties attracting women and youth.
  2. Challenges in attracting and retaining long-haul drivers. Identified causes were lack of work-life balance and the complexity and unpredictability of pay structures.

While a compensation strategy alone doesn’t directly resolve these challenges, having a clearly articulated compensation philosophy, defined structures, policies and practices, and an on-going communication plan will have an overarching affect on them.

An important first step is understanding the current structures, their prevalence and impact.

Truck Driver Pay Types

Traditionally, truck drivers are paid one of four ways; by the hour, by the kilometer/mile, a mix of both, or by salary. Within our Top Fleet Employers, this breaks down is as follows:

 

Trucking HR Canada’s publication, The Road Ahead: Addressing Canada Trucking and Logistics Industry Labour Shortages provides further insights into the breakdown of long-haul vs. short-haul driver pay types. 64% of long-haul drivers report per km/mile pay as the most common pay type, versus short-haul drivers who are more commonly paid by the hour (almost 75%).

In addition, there are several variable (bonus) plan options, or other forms of pay, that companies introduce to further incentivise drivers.

 

Some examples include:

  • Fuel Bonuses
  • Safety Bonuses
  • Inspection Bonuses
  • Percentage of the Load

 

  • Accessorial Pay
  • Detention and Layover Pay
  • Stop Pay
  • Per Diem Allowances

These types of pay structures are seen throughout the industry, though they have the potential to be, and in fact in some cases are, overly complicated. This may make it hard for drivers to understand and predict their compensation. As we demonstrate later in this guide, predictability is a key factor that affects how employees perceive their pay, and ultimately, it impacts how satisfied with their pay they are.

Base Pay vs. Variable Pay

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    Base pay is the amount of money that you pay employees as part of their regular paycheque. This could include an hourly pay rate or a base salary.

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    Variable pay is paid to employees in exchange for specific performance measures. This could be any type of bonus, incentive or commission payment.

Employee Perceptions of Pay

Right or wrong, the reality is that there can be a great deal of mistrust from employees when it comes to compensation. This is true both within the trucking industry and outside of it.

Some of the factors impacting employee mistrust are:
  • Compensation isn’t always discussed. Conversations about compensation can be infrequent, and if they are done one-to-one with an untrained manager, they can be uncomfortable. If compensation changes are communicated only by letter, this leaves no opportunity for questions or context.
  • Without context, people tend to fill in the blanks themselves. They draw conclusions that are often incorrect or only partially true. These conclusions are then discussed with other employees and they are believed to be fact or truth.
  • Employees may have expectations about the level of compensation they should earn, or what they think others in their position (internally and externally) are earning. These become the measures against which they compare – even if those measures are inaccurate. Typically, if employees guess wrong, they guess that they are underpaid. [SEE GRAPHIC BELOW]
  • Without clearly defined and articulated pay practices, employees are left to assume when and how they can earn more. If these assumptions are incorrect, they will become very quickly demotivated for the lack of reward for their efforts.
  • Employees don’t always see the big picture. They don’t readily understand where they fit within a company’s compensation structure and further, they forget or don’t know all of the compensation components they receive. Some elements of their pay are forgotten.

Every employer has a “Pay Brand” – the internal and external perceptions of how the company pays. These can either be intentionally created, or they are built over time organically through the experiences of employees or interactions with candidates. It’s becoming more important to influence the Pay Brand for your company. Doing so will help to better attract, retain, motivate and engage your employees.

Within industries, there are also pay perceptions, and in the trucking and logistics industry currently, the perception is that the pay structures for truck drivers are complicated and unpredictable. Some people may leave, or not enter the industry at all, due to these perceptions. Taking the lead to impact these perceptions will certainly give your company a competitive leg up.

Two Emerging Practices: Transparency & Predictability

Employee perceptions and mistrust when it comes to pay has sparked a trend for increased transparency and predictability in compensation.

Pay Transparency

The traditional power dynamic between employer and employee is shifting. In highly competitive markets experiencing labour shortages (such as trucking and logistics), the negotiating power of employees is strengthened, and employers are challenged to become more transparent in compensation practices and discussions in order to attract top talent and prevent good employees from leaving.

Pay transparency is a spectrum. [SEE CHART BELOW] On one end, common in the public sector and government, are organizations that readily disclose salary information and pay structures – even publicly posting an individual’s earnings for anyone to see (for example, Ontario’s Sunshine List). On the other end, the practice in some companies is for complete secrecy and confidentiality. These organizations keep all compensation information under tight lock-and-key. In the middle, there are organizations who disclose some information on pay rationale in a broader sense. They may disclose pay ranges for the individual’s role, inform employees on how market data is obtained, and/or they share details on the merit and bonus process.

While most organizations are not comfortable with full pay transparency, the trend is to move towards greater transparency, especially when it comes to providing rationale and decision methodology.

Embracing pay transparency may no longer be a choice. Consider:

  • The increased presence of public, self-reported salary sites – such as Glassdoor, or free on-line resources, such as Payscale. These sites provide employees with access to information they never used to have.
  • Greater requirements for pay equity to ensure equity for other traditionally disadvantaged groups – women, visible minorities, persons with disabilities, and Indigenous people.

Pay transparency also holds organizations to a higher standard when it comes to compensation decision making. With transparency comes accountability and increased fairness.

By enhancing pay transparency, organizations can more readily earn employee trust.

LEGISLATIVE REQUIREMENT: Pay Transparency Measure

Effective January 1, 2021, federally regulated employers, with 100 or more employees, were required under the Employment Equity Act to report their salary data in a way that shows aggregated wage gap information. The intention behind these measures is to raise awareness of wage gaps experienced by women, Indigenous people, persons with disabilities and visible minorities working in federally regulated workplaces.

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    1. Wage gap information will need to be included as part of the annual reporting on employment equity for June 1, 2022 onwards.
    2. The calculation for “salary” has been amended and it is no longer a requirement that employers annualize salaries (i.e., calculate all remuneration paid for work performed by an employee in the form of salary, wages, commissions, tips bonuses and piece rate payments, rounded to the nearest dollar). Previously, salary did not include overtime wages. New specific data elements, that employers can extract from their payroll and HR information systems, will include hourly rate of pay, bonus pay, overtime pay, and overtime hours, to determine hourly wage, bonus, overtime hours, and overtime pay gaps.
    3. Employers are required to retain additional records, including: salary information (excluding overtime and bonus pay); the period over which a salary is paid; the number of hours worked that can be attributed to the salary earned; the bonus pay paid during a reporting period; overtime pay in the reporting period; the number of overtime hours worked in which the overtime pay can be attributed.

Pay Predictability

There is a lot of research around the psychological importance of predictability. In essence, predictability helps foster a sense of security. If we consider the desire for predictability in pay, that sense of security becomes even greater as pay quite literally helps provide the base of Maslow’s hierarchy of needs – water, food, shelter.

Even if organizations are providing base-line measures to ensure “survival”, employees who feel disconnected from their pay, or who don’t understand how it is calculated or earned, will most certainly not be working towards the organization’s desired outcomes.

Simply put, wage and bonus plans are put in place to drive certain behaviours that ultimately lead to larger goals. Compensation then becomes an opportunity to communicate:

  • What is important to the company?
  • What are the expectations of you and your role?
  • How will you be rewarded if those expectations are met?
    Unpredictability in pay leads to disconnection from these important factors.

With frequent pay types, such as weekly or monthly earnings, pay plans should be so simple that at any time, a person can pick up a calculator and figure out what they are going to earn on their pay cheque. This is how they predict their earnings. This is how they feel secure and confident in their income.

Other factors that help promote predictability in income include: regularity of pay increases, frequency of bonus payment, and understanding who is involved in pay decisions and how they are made.

A great deal of good will can be earned by saying what you’ll do and doing what you say.

Creating a Comprehensive Compensation Strategy

Before you can be more transparent or offer predictability within compensation, you should first be certain that your pay practices are sound and worth sharing.

In Trucking, employee pay represents one of the largest marginal costs within an organization.  A well thought out strategy can support not only the company’s bottom line but also can contribute to an employee’s satisfaction and wellbeing.

A trend we are seeing is fleet employers moving towards a more simplified, pay-by-the-hour model. In Trucking HR Canada’s Guide report The Road Ahead: Addressing Canada’s Trucking and Logistics Industry Labour Shortages it was noted that between 2018 and 2020, more than one in five (21%) long-haul employers reported having changed the pay structure for their truck drivers, with three quarters of them abandoning mileage pay. This change definitely helps with predictability and transparency but does it help drive the company goals and desired employee behaviours? That is something that will be unique to each fleet employer. Creating a comprehensive compensation strategy will ensure you are making strategic pay decisions based on your company’s current state and desired goals. In doing so, keep in mind the real labour market challenges and employee perceptions.

6 Steps to a Robust Program

Developing a robust compensation program includes the following steps:

1. Create a Compensation Philosophy

A compensation philosophy is the foundation for any compensation strategy. It is the organization’s formal, documented approach to what they want to achieve through compensation, why it’s important and how they will spend their budget to make that happen. When done well, the compensation philosophy provides a framework for decision making.

2.Define the budget

It’s important to clearly understand what funds are available for compensation. This can be expressed as flat amount or as a percentage of revenue or profit. Expressing the budget as a percentage of revenue or profit better allows for changes (up or down) in business performance. As part of the budget, it’s important to determine when and how pay increases are given and what percentage of the budget is allocated to base pay vs. variable pay.

3. Determine Pay Structures

Pay structures provide a framework for the hierarchy of roles and the associated value, in terms of pay, that an individual who works within that role will be paid. There are a number of pay structures types that can be used, such as pay bands, pay grades or salary ranges. In order to determine where a position falls within the pay structure, you may need to perform a job analysis. A job analysis allows you to really understand the skills and competencies required to perform well in a job, as well as the expectations of a role. See the Job Bank of Canada link for more information on how to conduct a job analysis and create comprehensive job descriptions.

4. Develop Pay Practices

When hiring, promoting or adjusting pay, ensure you have standardized practices to ensure a consistent approach throughout the organization. It’s important to consider and define how your company approaches compensation decisions throughout the employee lifecycle. Considerations like – What is the hiring range for new employees? How frequently are jobs re-evaluated or assessed against the market? How often do we provide merit increases and how are they decided?

5. Create Necessary Policies

Policies related to the organizations pay practices may be required for both employee communication purposes and to ensure adherence, equity and effective decision making throughout the organization. Some policies that are related to the company’s compensation strategy include: paid holidays, time-off, pay-advances, and bonus payment terms.

6. Monitor and Review

A well defined compensation strategy is fluid. Be prepared to make modifications and adjustments over time. That doesn’t mean re-hauling an established program annually, but it may mean implementing annual checks and balances to ensure legal compliance and competitive positioning.

 

The Importance of Communication

As we learned earlier, employee perceptions of pay aren’t inherently positive. Strong communication practices can help counter those perceptions of mistrust.

Employers can benefit from a strong compensation communication plan by:

  • Providing awareness of company goals, priorities and expectations.
  • Motiving employees to meet or exceed those expectations.
  • Informing on difficult decisions to enhance understanding and acceptance.
  • Recognizing the hard work and success of individuals and teams.

Communication Best Practices

Compensation communication can (and should) include many methods. Like any other communication strategy, there is a need to identifying the who, when, why and how behind each communication. It is also important to approach messages, even positive ones, with sensitivity as pay is personal. Taking a one-size-fits-all tactic may backfire.

Below are some best practices to consider when it comes to compensation communication.

Share Company Results & Goals

Employees who feel connected to the overall performance results and goals of the organization are more engaged and motivated. By sharing your company’s progress with employees, and importantly, by communicating how the individual can benefit from this success financially (if applicable), will help employees understand how what they do contributes to this success.

Some ideas on how to share goals:

  • During employee on-boarding
  • Quarterly Calls
  • Monthly Dashboards
  • Employee Newsletters
  • CEO Updates
  • Manager Update

Grant Access to Information

Employees who have access to compensation data and information will have higher levels of trust and understanding. This is a critical factor to increased transparency and predictability. It also helps to ensure employee expectations are managed. Some examples of where you can provide more access to information includes:

  • Making pay structures available to everyone.
  • Clearly articulating when and how pay increases take place.
  • Providing market data for comparable industries and occupations.
  • Distributing bonus plan documents that include information on how bonuses are calculated.

Explain How & Why

No matter the decision or change in compensation, it’s recommended that details on how and why they were made be provided. This is the context that will lead to higher acceptance and understanding of decisions. For example, instead of just saying you received a pay increase of 2%, provide information on how the 2% was determined. “The company created an overall merit budget that took into account market information, cost-of-living data, our last year’s results and this year’s budget tolerance. We then determined individual raises based on performance appraisal scores.”

Demonstrate Opportunity

A good compensation communication strategy will include ways to show employees what their earnings potential is. This could mean how and when they can earn more in current roles (through merit increases, training and development, or bonus plans) and it also means showing them the earning potential available in future roles. Be sure you don’t inflate the opportunity or earnings potential or take a one-size-fits-all approach. Managing expectations is important or you can easily tip from motivation to de-motivation and frustration.

The Need for Manager Training

The majority of communication about compensation takes place between managers and their direct reports, yet managers sometimes have no training on how to do this effectively. Often as a result, managers are uncomfortable having pay discussions. They may actually have their own mis-perceptions or bias about the employer pay brand or how their team members’ salaries compare to others within the company or in the market. Pave the way for smoother compensation discussions by educating managers on the compensation philosophy and by providing context and transparency on decision making.

Preparing for a One-to-One Compensation Discussion

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    Prepare

    • Schedule the discussion in a quiet, private and relaxed setting where there won’t be interruptions.
    • Review your notes and any additional information you have – for example, market data, the company’s decision-making rationale, or the organizations financial situation.
    • Jot down some of the key speaking points.
    • Ensure there is enough time scheduled to have a meaningful discussion.

    Conducting the Meeting

    • Explain the reason for meeting.
    • Provide details of the decision – including how and why it was decided.
    • Be honest and clear when delivering the message.
    • Ask questions of the employee to ensure understanding.
    • Allow time for the employee to ask questions.
    • If you don’t know how to respond to a question, don’t. Advise you will follow up and make sure that you do.
    • Provide information to the employee about how they can positively impact their compensation (if possible).
    • Express your commitment and support to the employee’s success.

    Follow-up

    • Allow an opportunity for the employee to follow up at a later date if there are lingering questions.
    • Provide details of the discussion in writing.

Total Rewards Statements

Most employees equate their pay to the amount that they see on their pay cheque, or worse, the net amount that is deposited into their bank account on pay day, grossly under-stating the true picture. Total Rewards Statements (or Total Compensation Statements), provide organizations with a great opportunity to outline the full financial investment they make in employees.

Total Rewards Statements can be designed in a number of ways. Companies should consider what they want to include on a Total Rewards Statement in order to remind employees of their true earnings. It also provides employers with an opportunity to reinforce key messages about the company and their compensation strategy.

Once designed, it’s important to capitalize on this communication opportunity. Often employers print and mail the statements, but consider also taking the time to talk through the statement with each employee.

HR Trends & Compensation Impacts

Diversity, Equity and Inclusion

As mentioned earlier, the Federal Government has implemented greater transparency into the Employment Equity Act to ensure inequities in pay for frequently disadvantaged groups are highlighted. Even if your company is not mandated by these legislated requirements, it’s helpful to take a closer look into your pay practices to ensure they are equitable and fair. Generating compensation data (like that required for employment equity reporting) will allow you to identify any gaps and implement strategies to course correct. Transparency also helps ensure that managers are making fair and equitable pay decisions.

Digitization & Automation

The on-going introduction of digitization and automation within the workplace has, and will continue to fundamentally change the way we work. The skills required to successfully perform in a role could look quite different than they did even five years ago. Companies will benefit from more frequently performing job evaluations. The re-evaluation could cause a major shift to your pay ranges. Be sure to understand how those shifts impact overall budgets.

Flexibility is the Future

One of the most obvious forced changes brought on by the Covid-19 pandemic was the mass movement to remote work for job functions that could. A continued flexible work environment could bring with it the need for revised compensation strategies. Increased opportunity for remote work opens the possibility to recruit from anywhere. Traditionally, companies take work location into consideration when assigning pay grades or defining pay ranges for certain roles. Many fleet employers already take work location into consideration, typically adjusting pay rates based on where the company worksite is located, or where the employee is recruited to work from. The question now becomes, should work location still be a factor if individuals are working from home? Will the employee’s location now matter more? Should location even come into play? Companies may now look to national averages to inform compensation decisions, rather than regional data. If changes are being made to your company’s talent strategy, consider how they also impact your company’s compensation benchmarking and pay ranges.

This project is funded in part by the Government of Canada’s Sectoral Initiatives Program (SIP)

 

 

 

Developing a Total Rewards Statement

Compensation Philosophy Sample

A new year brings new rules for trucking and logistics employers

A new year brings new rules for trucking and logistics employers

Craig Faucette

The beginning of the year has brought on a new set of changes that federally regulated employers will need to be aware of. These recent amendments to the Canada Labour Code include new standards for leaves of absence, occupational health and safety requirements and pay equity. As we roll into 2022 let’s take a closer look at these rules and some of the resources that can help trucking and logistics organizations prepare.

Bill C-3

Bill C-3 amends the Canada Labour Code to expand paid sick days and bereavement leave. Though the bill was passed in December 2021, there has been no announcement about when the new provisions will take effect. The goal is to give employers time to adjust their company policies and payroll.

Paid sick days: Employees will be entitled to three paid sick days after 30 days on the job, and one day paid sick leave per month of employment up to a maximum of 10 days per calendar year. Employers must pay the usual wage when sick days are taken.

Sick leave can be taken all at once or in shorter amounts, but employers can require that each period of leave is not less than one day. Also, employers can request a medical note for absences of five consecutive days or more. This request must be made no later than 15 days after an employee has come back to work.

Bereavement leave: An employee experiencing the death of an immediate family member is eligible for up to 10 days of leave (3 of which are paid if the employee has worked more than 30 days) between the day a death occurs and six weeks after any type of memorial service.

Death of a child: If the family member is a child, the employee is eligible for an unpaid leave up to eight weeks. This leave must be taken during a period that starts with the death or stillbirth of the child and ends 12 weeks after the date of the funeral, burial or memorial service.

Harassment and violence in the workplace

Last year the Canada Labour Code was amended to expand the obligation of federal employers to prevent, investigate and respond to incidents of workplace violence and harassment. The rules require employers to provide an annual report to the Minister of Labour by March 1 of every year, starting in 2022.

The Employer’s Annual Harassment and Violence Occurrence Report (EAHVOR) must detail any workplace incidents, the measures taken to resolve them and the average time it took to complete the process.

With the reporting deadline upon us, it’s important to know how to file an EAHVOR and meet other obligations regarding workplace harassment and violence. Our Understanding the Workplace Harassment & Violence Prevention Regulations resource can help.

Human Rights Commission on Pay Equity

The Pay Equity Act came into force last August, establishing that federally regulated employers must provide equal pay for work of equal value across job classes.

The first requirement under the Act was to notify employees about the creation of a pay equity plan (the deadline to post a notice was Nov. 1, 2021). Employers have three years to form a committee, complete their plan and adjust compensation based on the findings.

This process will take time and the requirements vary depending on the number of employees, so don’t wait to get started. Check out our guide, The New Pay Equity Agenda 7 Steps to Compliance, to learn more.

Things to Come

Labour Canada is considering other changes to the Canada Labour Code as stated in the Minister’s Mandate letter after the election in the fall. Among them:

  • Development of a right to-disconnect policy within federally regulated workplaces.
  • Making mental health as part of workplace health and safety and requiring federally regulated employers to have measures to deal with stress at the workplace.

Trucking HR Canada has a range of resources and will continue to develop more to support employers in complying with all new regulations. Keep your eyes open for upcoming webinars that will go into greater detail about some of the changes around paid sick days and pay equity.

Survey Says: HR Managers Take Varied Approach to COVID-19

Survey Says: HR Managers Take Varied Approach to COVID-19

June 16, 2020 by Angela Splinter

Every employer across the country is feeling the impact of COVID-19 in its own unique way. But for HR professionals at truck fleets and logistics companies, they all have one challenge in common: making sure workers and especially truck drivers feel safe and secure in their jobs.

Trucking HR recently surveyed carriers, 3PLs, and freight brokers about the measures they have taken since the pandemic came to Canada and what they plan to do in the next three to six months. Let?s take a look:

Layoffs

Seventy-six percent of the employers we surveyed said they have laid off workers due to COVID-19, with 83% of those layoffs categorized as temporary. Layoffs of truck drivers were more prevalent in the short-haul segment and among employed drivers than contractors or owner-operators.

Dispatchers and mechanics were also affected, with 10% of employees laid off in each occupation.

Notably, employers that have already laid off workers said they are more likely to continue doing so over the next three to six months.

Employee-initiated departures

According to our survey, the most common reasons for leaves of absence and other types of employee-initiated departures were self-quarantine; the employee or a member of the household is at a high risk of contracting COVID-19; and family caregiving. Each reason was evenly cited among employers.

The combination of layoffs and employee-initiated departures reduced total truck driver employment across our sample by 11.4%.

Of particular concern to HR professionals is whether these employees have left temporarily or if we have lost them for good.

Reduced compensation

Not surprisingly, many employers have cut worker pay due to declining revenue. Roughly one in four employers in our survey have frozen salaries or wages for truck drivers. This measure was more common among companies transporting non-essential goods (31%) than those transporting essential items (15%).

Pay increases have been rare?13% of survey respondents said they are paying workers a premium due to COVID-19. Others are offering non-monetary rewards including flextime, child-care, and time off.

Another 15% of employers said they have provided truck drivers with monetary rewards such as gift cards.

Improving the image

The million-dollar question for our industry is this: has COVID-19 changed the stigma around working in the trucking and logistics sector?

The views are mixed.

On one hand, employers are divided about whether COVID-19 has made the job of truck driving more or less appealing.

While 35% of employers expect truck driving to be more attractive to prospective employees relative to pre-COVID, 23% believe the job will be less attractive, citing the attention brought to dismal working conditions and wages.

On the other hand, 29% of employers believe that COVID-19 has made trucking and logistics somewhat or much more attractive to other types of prospective employees (excluding truck drivers). This compares to only 4% who believe the attractiveness of the sector has declined for these potential employees.

Challenges ahead

It is interesting to compare these finding to another Trucking HR Canada study done in partnership with Abacus data where 54% of Canadians overall had a positive impression of trucking companies.

The Abacus study also showed that 85% of Canadians think a strong trucking sector is necessary for the economy to be healthy.

Yet barriers remain.

Despite the recognition brought to truck drivers for their essential role in keeping supply chains moving, people are still not rushing to join the industry. Just 35% of Canadians between the ages of 18 and 35 said they would consider a job in trucking and logistics.

And when we look at the huge government relief programs available, namely the Canadian emergency wage subsidy (CEWS), our survey of employers showed that among employers that have not applied for CEWS, the vast majority (85%) have not experienced the eligible revenue reduction to qualify for the subsidy.

At a time when trucking and logistics companies are working hard to survive, they are also essential to the survival of their customers. We cannot lose sight of the fact that our industry needs a level playing field when it comes to accessing government programs and initiatives for employees.

We have seen what supply chains look like when Canada is in the middle of a health crisis. We need a financially strong and resilient transportation industry so HR professionals can keep their truck drivers safe and prepared for the challenges ahead.

 

Dollars and Sense

October 22, 2019 by Angela Splinter

Everyone wants to be paid well and paid fairly. And employers want to be competitive with their compensation. It’s good business to make sure what you’re offering is up to date, on trend, and able to both meet the needs of your workers and attract your next generation of employees.

Let’s look at three things to consider:

Hourly pay

Last year the demand for freight services significantly outpaced the supply of qualified drivers, which in turn put strong pressure on wages. Our latest labour market information research shows significant changes in compensation for truck drivers in 2018, often involving double-digit percentage increases.

To attract prospective drivers, there seems to be a shift away from mileage pay toward hourly pay, especially in the long-haul segment. While this approach would require some operational changes, employers are noting that hourly pay is easier for younger workers to understand and makes it simpler to calculate overtime pay for truck drivers.

Total compensation

Total compensation refers to the overall value of what you are offering your employees in both direct and indirect benefits. Direct benefits include wages or salary, while indirect benefits include bonuses, vacation days, allowances for tuition and training, uniform allowances, and other items not reflected on a paycheque.

It’s important to identify everything you offer and to communicate them to your staff, especially your drivers. In a market where drivers frequently compare pay packages, your ability to clearly explain the total compensation you offer will help them make informed decisions before jumping ship – and to accurately explain their pay and benefits to drivers in their “grapevine.”

Our website has templates that can assist here. If you are not currently providing total rewards statements to your employees, this is something you may want to look at.

It’s important to identify everything you offer and to communicate them to your staff, especially your drivers.

Tailored benefits

There are numerous ways you can shape your benefits package to the needs of your workers. The most important step is to engage employees in this conversation so you can identify things that matter most to them and incorporate them into a tailored pay package.

One example is a focus on financial wellness. With a large percentage of the trucking workforce nearing retirement, this is a real concern for a lot of workers. A recent survey by the Canadian Payroll Association shows that 43% of workers are so financially stressed that their performance suffers.

Including financial wellness in an overall benefits plan can not only make your offering more competitive, it will genuinely help employees’ peace of mind while also improving productivity.

Communication

Your employees need to know – and understand – their compensation package. Through effective onboarding, regular staff meetings, or through the various channels you use to communicate with your employees, make sure your employees are informed.

Clearly articulating and explaining in detail the total value of employment to employees could be a deciding factor in whether they stay with you or leave. And in a labour market where employees are focused on their bottom dollar, it just makes sense that you do everything you can to make them stay.

What You Should Know about the New Federal and Provincial Labour Standards

Posted on June 12, 2018 by Shelley Brown

Within the last year there have been significant initiatives involving federal and provincial employment standards legislation. As a reminder, in July 2016, the Supreme Court of Canada finally resolved the controversy over termination without cause under the Canada Labour Code.

The trucking industry must take note of these changes as they provide protections against discipline or termination in retribution against employees who exercise these rights. Failure to implement these changes will inevitably result in legal and monetary consequences.

Here’s what you should know:

Federal Level

In 2017 the government passed Bill C-44 which amended the Employment Insurance (EI) scheme to allow parents of newborns to elect payment of their EI benefits over the course of an 18-month parental leave of absence. In Budget 2018, the government also announced the impending introduction of a “lose it or leave it” approach to parental leave for the second parent of a child. This is likely to have significant impact on the trucking and logistics industry as more employees may take additional leave.

Also, in Wilson v. Atomic Energy of Canada Ltd., the Supreme Court definitively held that after 12 months of employment an employee can only be terminated for cause. Employees who believe they have been fired without cause can file a complaint under the Canada Labour Code within 90 days to review the dismissal.

Provincial Level

Several new provincial initiatives, in particular, directly affect scheduling and staffing in the trucking industry:

Ontario: Last year the province passed Bill 148 which, in addition to increasing the minimum wage, introduced important changes in three areas: equal pay for equal work, on-call entitlements and leaves of absence.

The new rules state that compensation must reflect the work being done and not the status of the employee. In other words, subject to certain exceptions, part-time workers, seasonal workers or casual workers must be paid at the same level as full-time workers for the same work. On-call workers who are not called to work under certain conditions are entitled to a minimum of three hours of pay.

Bill 148 also introduced enhancements to Maternity/Paternity leave, Family Medical Leave, Personal Emergency Leave and Crime-Related Death of a Child. In addition, an employer can request, but not insist upon, a doctor’s note.

Alberta: Bill 17, which came into effect on Jan. 1, reduces the eligibility time for unpaid leaves from one year to three months and extends Compassionate Care Leave from eight weeks to 27. It also introduced new leaves of absence, such as: Personal and Family Responsibility (five days); Long Term Illness (16 weeks); Bereavement (three days); Domestic Violence (10 days); and Child’s Critical Illness (36 weeks).

British Columbia: On April 9, British Columbia tabled legislation that would allow for 18 months of maternity leave, in harmony with federal provisions. It also introduced the following leaves of absence: Compassionate Care Leave for terminally ill family members (27 weeks); Death of a Child (104 weeks); and Child Missing as a Result of Crime (52 weeks).

Finding and retaining good employees is a constant challenge, but HR managers also have the task of making sure their companies adhere to the standards for managing the people you employ. Breaking the rules can have financial and legal consequences but also hurt your reputation as a good, fair employer. Be sure to watch this space for further updates.

Disclaimer: This post is informational and does not constitute legal advice. A lawyer should always be consulted.
By Shelley Brian Brown B.C.L., LL.B., LL.M. Employment Lawyer, Steinberg, Title, Hope and Israel LLP
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