S1 E48 When Truck Drivers Say No to Per Diem: Understanding the Real Reasons

Why would a truck driver turn down extra take-home pay?

It happens more often than many fleet owners expect.

In this episode, Mike Ritzema explains why some drivers decline per diem and why those decisions are often based on legitimate personal circumstances rather than misunderstanding.

You'll learn why concerns about mortgages, Social Security, past experiences, and trust all play a role, along with practical advice for handling these conversations in a way that builds long-term driver relationships.

The goal isn't getting every driver enrolled in per diem.

The goal is making sure every driver has the information they need to make the right decision for their situation.

If you're thinking about implementing a truck driver per diem program or want to improve participation in your existing one, this episode offers practical guidance based on years of working exclusively with trucking companies.

Transcript

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If you've ever offered per diem and a driver said no way, don't just assume they don't understand it. Sometimes they don't, but sometimes they understand it perfectly. And they're protecting something else that's important to them. And if you don't understand what that is and why it is, you'll never convince them otherwise. Welcome to the Driven for Success Podcast. This is the podcast for trucking company owners and executives who want to build better businesses, make better decisions, and keep drivers without losing control. I'm Mike Ritzema, your host and owner of Superior Trucking Payroll Service, where our mission is simple, to help trucking families. This podcast is one of the ways we fulfill that mission. Today's episode is about something every company runs into eventually. You explain pre diem to your drivers. You did the meeting. You did it just like we talked about in the last episode. You showed them the savings. Most of the drivers love it. But then one driver says no, and they say no emphatically. Today we're going to talk about why. One mistake that I see companies make is assuming every driver who declines pre diem has the same reason or same set of reasons. But they really don't. I've heard dozens of reasons over the years. Many of them are based on misinformation. Some are based on past experiences. Some are completely legitimate. And that's important because if you treat every objection the same, you're going to lose credibility. You don't overcome objections by talking more, you do it by understanding better. You'll hear all these things of what drivers have heard. You'll also, it brings into their psyche as well about their past experiences with other trucking companies. And so you've got to really understand where they're coming from. And we all know how rumors spread through a fleet or how drivers talk. So it's not hard for them to get to a conclusion that this is not what's best for them. So what look we're going to talk about some of the reasons why they might decline it and what you might want to do in that case. One of the reasons I see is they're going to buy a house or a car. And so the bank is coming to them and say you need to show this much income, but they show them a tax, a payroll document, a pay stub, and they see the wage is lower. Like, well, you don't qualify for this house. You don't qualify for that car or that truck or that motorcycle or whatever they're looking to purchase and finance. Because pre diem reduces the taxable wages, which is the point of pre diem. That's how it saves the driver money. But mortgage companies generally qualify at buyers using taxable income. They want to look at the W-2 number that's in box one or box three, or they want to see gross pay on a pay stub. So if someone's buying a home in the next month, taking pre diem could make qualifying harder. And notice what I said there. It's buying a home now, not someday. Sometimes the answer isn't no, it's not yet. They feel like they're in the middle of buying a house and they don't want to mess up their wage. Okay, well, we just delay enrollment for you until after closing. That's fine. Or ask your employer, and they can talk to me about it, how to write the letter to the mortgage company to explain what their wages really are. I've never had that have a problem coming back to me. Now, that doesn't mean that every mortgage broker or whoever is going to accept it, but most of them do. Sometimes, though, the right answer isn't to change their mind, it's to change the timing. If it's just easy to start a month later for them, I would do it. It's a very small price to pay and it keeps the driver happy. Drivers don't buy houses and cars every year. These are usually short-term situations. So just work with your driver. Don't sit and make a big deal out of it. They want to, or they you've done per diem for a year and they want to opt out for a month so that their wage looks like it goes up. Let them do it. It costs you very little, it keeps the driver happy. That's a win. Another concern that I hear, and I hear this one the most, via social media and people that reach out to me and drivers that I talk to, social security. Because drivers know, and they're correct, that lower taxable wages will mean lower Social Security payouts when they retire. That is absolutely true. Whenever we do webinars, we tell everybody that. We so look, here's the downside, right here. This is the biggest one. But here's the part that they're not doing. The math they're not doing is to number one, Social Security is a horrible investment. We all know it. None of us would opt into it. I'm not saying Social Security should be illegal or any of that. It's not where I'm going with this. But I'm saying that as an investment vehicle, Social Security is not great. So if they took a quarter or a third of their savings from the per diem, their increased net pay, and put that in an IRA and then just drew on that whenever they started drawing on Social Security, they'd come off way better. It would be so much better for them. But it's tricky to get the driver to believe that because, first of all, Social Security has a formula that they use, and you have to go through a bunch of steps to figure out exactly what they would get paid out, including the variableness of future earnings and when they're going to retire. So there's a lot of things going on there, and they don't want to mess with it. And they're probably really relying on Social Security. Historically, and I don't want to paint with a broad brush, but drivers are not always the best managers of money. And so, probably due to lack of education about that topic, I don't think it's because they're they they don't aren't intelligent enough to understand it. That's absolutely not true. I think they just no one ever talks to them about it. So the Social Security they're going to collect is a big part of their retirement. And a lot of drivers retire before 65 or 67 or 70 because that it's a hard job and it wears you out. So if changing your social security changes their retirement. See what you should do with that driver is run the numbers with them and show them, hey, look, if you put this much away, let's do the same math on your on an IRA account or on a 401k or whatever you want to do. And you're gonna be better off. You're still gonna be better off. So that helps, but this shouldn't be emotional. This argument is all about math. And good decisions are made with numbers, not fear. Right now, those drivers have fear, and it's legitimate because Social Security is a huge part of their retirement, if not all of it. So they want to make sure they're not screwing around with that. And I think that's legitimate. I understand their intention. You need to understand their intention, and you need to tell them that you need to express to them and make them feel understood about this, and then show them the other way. You know, every driver's situation is a little different. You know, there's so many variables. I will tell you that the older drivers will generally be more worried about this than the younger drivers. Many of the younger drivers don't believe Social Security will even exist when they retire. But even if a younger driver does, their concern is still every bit is valid. And so they can go on to SSA.gov and they can find out what their tentative retirement is going to be, or Social Security earnings depending on when they retire. And then you can then you can do the math of, okay, if this is a little bit lower and this is a little bit higher, you know, and things like that, and you can get to a number and you can add the IRA in or the 401k, or whatever you want them to do. Reason number three why drivers do not want per diem, and I think they dig in on this the most. Bad information, bad intel. I hear drivers say, oh, my old company got audited, and this and this happened, which wouldn't affect them. Or my accountant told me it's illegal. Was it really your accountant? Uh, my cousin lost money, my friend lost money. Uh it's just a scam. I hear that a lot on social media. It's just a scam so that the company saves money. Yeah, we as we talked about in the last episode, you got to tell the drivers we're saving money on this too. We'd like you to think we're just being super cool to you guys, but it's helping us and it's helping you. So, you know, it's really that they want to believe that bad information, even though none of the stories are true and they're missing incredibly important details, they still want to believe it. And so bad information in among truck drivers spreads like weeds. It just keeps going and it never stops. And one bad story can outrun a hundred good facts. You know, you can it's whether it's at truck stops, Facebook groups, or other social media, TikTok. I see it on TikTok a lot. But I always love to engage those people because they're engaged in it. So they're already wanting to engage. They'll come on my, they'll come on my TikTok feed and be like, that's a scam. All right, well, let's talk about that. And I always do my best to make them feel heard because I want them to fully explain where they're coming from on it, which is what you should do. Don't just say that's a scam because that just makes them feel like they don't know anything, or like you think they don't know anything. So if they say my accountant told me it's illegal, say, tell me what they said was illegal. Tell me, get some give me some more background on that, and find out what's going on. But that's how this non-truth gets spread. So you know, but you can't debunk it until you they feel like you understand what they're saying. The biggest overlying reason, and I think this goes with the others, but this is really the root of a lot of the reasons. I don't think it's a separate reason necessarily. They don't trust you. And that's just the hard truth. You have a low trust company. That's common in trucking, it's common with truck drivers. You know, they all have battle wounds from what other trucking companies promised them they would do for them, and they didn't do it. And they felt like they were wronged, they felt like they were burned. And so when you tell them this saves you money, they're gonna be skeptical. They don't understand that it can be good for both of you guys. And that's why they go back to that rollout meeting where you explain, look, it saves us money, it saves you more. And to be fair, I don't blame them for not trusting trucking companies. They've been burned so many times, and they're not gonna be good at working the system to try and get like judicial relief or get the government to step in for them. And so they just give up and go work somewhere else. You know this. Ask your driver, I say this all the time. Ask your drivers about times they got screwed, and you're gonna hear it. So the trust has to be earned. There's no other way to do it. And so if they don't trust you, they're not gonna believe all the other things that you told them in the rollout meeting. You know, people don't reject per diem necessarily, they reject the person explaining it. So if you haven't earned that trust yet, and if they're new, you're not gonna have earned it. I'm not saying that it's a deficit on your part, but we talk about it all the time. Clarity is where the win is. And so clarity is where you can earn trust, transparency is where you earn trust, and that's why you tell them that the company benefits too, and that's why you show them pay detail on their pay stubs, and that's all these things, right? It's all to build trust. It takes time, but you got to show them the math, and you've got to keep on talking to them about it until they start to trust you. And that's why we talked about in the last episode, too. Start with that driver, it's kind of the ringleader and might say no. Because that's the you win that driver over, you're gonna get everybody else. One piece of advice I do have for you about what not to do when all these all these concerns come up from the drivers. And again, I think many of them are, I don't want to say silly. Silly is the wrong word, but it's close to silly. They're really not the issues. But the driver comes to you and says, I don't want it, never try and win that argument. Never start with, well, you should take it because it's gonna put more in your check. And if you put someone in retirement, then you're gonna have better retirement and this and this and this. And we're not that company that screwed you. Okay, I wouldn't do it. Your goal is not to win that argument. Instead, your goal is to make the driver feel heard. Ask him questions. Say to them, what concerned you? Let's talk in detail about what your concerns are and see if we can figure out how to work together on this. And tell me what you've heard. Tell me what other drivers have told you. Tell me what it is that makes you think this is a bad idea. And don't be afraid to lay it on me. Uh, because you want the driver to really mean it. You don't want the driver to come out of that meeting feeling like they should they should have said something else, but they decided not to. Now, let it out. Say it clumsily if you have to. If you can't think of the nice way to say it, say it the mean way. You know, what are you worried about? What's your real concern? Because that's where you want to get to. If you can get them to express their real concern, and it can be hard truth. It can be, well, I don't, I just don't trust you guys. Okay. That changes the conversation, and now at least we know what we're fighting against. Curiosity solves more problems than persuasion. Just listen to them. As you've seen, as you've worked with your drivers, most of the arguments that they have are they don't feel listened to. Driver retention for companies that don't listen to their drivers is way lower than the ones who feel just ask the drivers. You know, do you feel listened to? Do you feel like we address your concerns? Do you feel like we understand your concerns? Just in general. Like that's a great poll, just a one-question poll to send to all your drivers. And the ones that say no, those are the ones that are going to leave. The ones that say yes, don't leave. Every single time, guaranteed, as much as I can guarantee any of that. But let them talk, don't interrupt them. As I say, some people, let them let them let the air out of the balloon. Let them tell you everything that they have concerns about with it, and then ask them. Then repeat it back to them and say, so I'm understanding your concerns to be this. Your concern is about Social Security and that you won't get as much. And your concern is about you want to go buy a house next year, or something like that. Is that all of your concerns? Yes. That's all my concerns. Okay. If I can help you with those, would you reconsider? And if they say yes, then you go deal with it. If they say no, then you're not to the real objection yet. If they say no, I still wouldn't do it. Okay, well, then you have more concerns. They just, is it then you can even ask them, I would some of them are gonna need to be led along in this conversation a little bit now. Say, is it that you don't trust us yet? They'll kind of be taken back and they'll be like, Well, I've only worked here three months and I got screwed over time after time after time. Then you could then you talk about driver trust. You go, look, we understand that. It's fine. How long will it take for you to trust us? Oh, well, I gotta work here a year. Okay, well, let's talk in nine months. You'll see that we do what we say we're gonna do, and that we're not the jerks that you used to work for. And go from there. But now let's go to the next thing. You do all these things, you nail that conversation I just talked about. You just put on your best empathy hat and crushed it. And they still said no. Now what do we do? You've gone through every argument, you've gone through all these things, you asked them what concerns you the most, and they talk about say it's social security or whatever the thing is, and you you talk them through it, and you explain, look, if you put this money away into account like an IRA is yours, it's not ours, you can you'll be better off. But they still won't do it for whatever reason. The reason doesn't have to make sense to you, it makes sense to them in their head, or they just won't tell you the reason, the real reason. They just won't express it to you, and you can't force that out of some people. I can't. I'm not that gifted of a conversationalist to be able to do it. Maybe you are. If you are, hit me up with your secrets. Because I would love to know. But your goal is not to win this debate. Your goal is that they understand their options and they feel like they were heard, but if they still don't want it, you just let them opt out. Per diem should always be voluntary. It's better for them, but if you force it on them, they're not gonna feel like it's better for them. Because the big pic and the big picture really is keeping your drivers, right? And a good driver is worth far more to your company than forcing them into a pay program they don't want. You can always have the conversation in six months or a year. Their situation might change. They might trust you more. But if you force it, you're gonna lose that driver. And they're gonna be some of these drivers that comment to me. I've had I had a driver comment this to me on TikTok last week and said, my company forced us to do per diem. And it was a mega carrier. They didn't tell me who it was, and if they did tell me, I wouldn't put them on blast here. But that's what they said. And that driver doesn't work there anymore, so they lost that driver. It's way more expensive to replace a driver than the savings you get with per diem every single time. You need to respect that driver's decision, and you're gonna show them that you trust them. That is, trust has to be shown sometimes, well, most of the time, and this is one of the ways that you do it. And what's gonna happen is your driver's gonna remember that you let them opt out, and it's gonna lower the temperature of the of the whole conversation in the room. And then over time, they're gonna talk to other drivers that work for you, the drivers that take Pre DM and get more in their check and be like, yeah, it's great. I filed my taxes, no problem. Well, my accountant said it was illegal. Well, talk to my accountant. Things like that. That'll all happen on its own, and they'll come around to trust you. They'll actually trust you more than they would have because you showed them we're not gonna force you into this. So the and the goal with the goal with this all is not 100% per diem participation. The goal is 100% of drivers are making an informed decision, even if that decision isn't the wisest one. So if your drivers understand what per diem is about, most of them will choose to opt in. But some won't. And that's okay. Your job isn't to pressure them, your job is to provide them with education so they can make their own choice. Answer every question honestly all the time. That's just good advice in general. Explain the advantages, explain the disadvantages. Even in the rollout meeting, talk about Social Security, get out in front of it. Let them decide what's best for their own situation. Even if it's not best for their situation, they say it is. Drivers appreciate being treated like adults, and they'll remember when the company respected their decision. And that's how you build trust. Not by winning arguments, but by helping people make informed decisions. When a driver says no to per diem, don't try to win the argument. Win their trust. Thanks for joining me on another episode of the Driven for Success Podcast. If this podcast was helpful, I would appreciate if you'd subscribe, leave a review, or share it with another trucking company owner. It helps us fulfill our mission. And if you have questions about setting up a compliant pre diem program or payroll for your trucking company, we're always happy to help. We'll see you next time.