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Contractor's Road Is Wide Open

Says one contractor, "I wasn't aware of the huge value of a benefits package."

May 29, 2004
Related Topics: Contingent Staffing, Recruitment

Renee Dicus was working as a federal forester in California’s Sierra Nevada Mountains in 1987 and, in the off-winter months, as a bartender in a Reno, Nevada, casino when she heard that a company called RPS was looking for contract delivery drivers.

    She was so interested, she got a commercial driving license, scraped together $2,500 to lease a 1,000-cubic-foot panel truck, spent another $500 on uniforms, equipment and other supplies and signed on for a Reno delivery route.

    Fifteen years later, RPS has become FedEx Ground, and Dicus, 41, now has five trucks and six drivers who work for her as subcontractors, delivering and picking up packages for her throughout the Reno area.

    "The fact I am still doing it after 15 years, still trying to expand, says there are definitely some positives to it," Dicus says.

    Dicus is one of 17,000 contract workers who make up the pickup and delivery workforce at FedEx Ground, a division of Memphis, Tennessee-based FedEx Corp.

    What attracted her to the work was the opportunity to make more money. What keeps her there is the ability to expand her business by hiring her own employees. She now works at home and manages the operation while her drivers service the routes.

    The downside is that she is quite literally on her own. She doesn’t receive FedEx benefits, overtime pay or a company retirement plan. She supplies her own trucks and uniforms with the FedEx Ground colors and logos and pays for gas, maintenance and insurance.

    "I wasn’t totally aware of what the huge value of a benefits package was when I started," Dicus says.

   Dicus wouldn’t say how much she makes, but she says that a single-route contract driver should be able to gross about $50,000 to $80,000 and take home $40,000 to $70,000 a year after business expenses but before personal expenses like health insurance.

    Contractors with multiple routes, like Dicus, can boost their income past $100,000. By comparison, the top scale for a UPS driver is about $51,000 a year, and it is not unusual for a driver to earn $70,000 with overtime. But those drivers also get generous health and retirement plans and drive company trucks.

    Dicus makes health insurance and retirement plan arrangements for herself, but she has converted some of her drivers from subcontractor to employee status and provides them with a health plan, paid vacations and some other benefits. She pays her drivers about $30,000 a year, and the benefits she provides boost their packages to about $40,000 a year.

    "As health insurance becomes far more expensive and difficult to get, I think the value of a benefits package certainly is a lot more valuable," Dicus says.

    As long as the contractor pay is high enough, Dicus says she can afford to provide her own health and retirement plan.

    "There has got to be room for flexibility and change," she says. "FedEx has got to be willing to make it a profitable venture."

Workforce Management, December 2004, p. 41 -- Subscribe Now!

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