Western Railroad Discussion > Why Working on the Railroad Comes With a $25,000 Signing Bonus

Why Working on the Railroad Comes With a $25,000 Signing Bonus
Tight labor market forces BNSF, Union Pacific to dangle big incentives from Missouri to Oregon



By Paul Ziobro WSJ
April 23, 2018 7:00 a.m. ET

9 COMMENTS

Railroad workers are being offered signing bonuses of up to $25,000 to join BNSF Railway and Union Pacific Corp. as the freight railroads struggle to fill jobs in a historically tight labor market.
BNSF and Union Pacific are hauling more products across the Western U.S., where their networks are based, and trying to ease congestion in areas with high demand. Freight volumes are rising on strong economic growth and industrial expansion, and a shortage of available truck capacity is pushing more shipments onto rails.
At the same time, the unemployment rate has fallen to 4.1% in the U.S., and as low as 2.8% in some markets where railroads are hiring.
In response, the companies are dangling incentives that analysts and union leaders say are the highest they can recall.
Union Pacific is offering $10,000 to $20,000 “hiring incentives” to train crews in cities like Denver, Kansas City, Mo., and North Platte, Neb., where its largest rail yard is located. Those jobs average $40,000 in pay over the first year and $60,000 the next, according to job listings.
Electricians to inspect, repair and maintain locomotives are being wooed with $25,000 signing bonuses to Union Pacific locations outside Milwaukee, in Hinkle, Ore., a three-hour drive from Portland, and elsewhere.
A Union Pacific spokeswoman said the hiring bonuses are for certain positions in “tight labor markets.”
BNSF, owned by Berkshire Hathaway Inc., BRK.A -0.05% has hiring incentives starting at $15,000 for some new hires, according to a document reviewed by The Wall Street Journal.

A BNSF spokeswoman said the railroad is facing a talent shortage across its system and is extending the offer to diesel mechanics, electricians and conductor trainees. “We are constantly evaluating the market and will use this approach when it makes sense to recruit talented individuals for hard to fill positions or locations,” spokeswoman Amy Casas said.
The jobs can be demanding, with irregular work schedules, long hours and frequent nights away from home. “This is a tough lifestyle,” said Jason Kuehn, a vice president at consulting firm Oliver Wyman who focuses on transportation. “It’s a very unforgiving work environment.”
For those willing to endure it, the pay is good. The median Union Pacific employee—a locomotive engineer—made nearly $83,000 in total compensation in 2017, according to a company securities filing. Health-care and retirement benefits, including a pension, are also fairly generous. (See how your pay stacks up.)
One catch is that the bonuses are paid out over time, after meeting certain milestones, like completing training or one year of service. And they lock in workers to the location for around three years. If workers leave or are terminated for cause before that, they have to pay back the full amount.
Credit Suisse transportation analyst Allison Landry said she doesn’t recall any time in recent years when railroads were struggling to hire enough workers. “It highlights how the current broader labor backdrop is perhaps something the U.S. hasn’t seen in many, many years,” she said.
Other transportation sectors face similar pressures. Wages and benefits are rising for truck drivers, who also work long hours and often spend weeks at a time on the road. Trucking companies experiencing strong freight demand are dangling bonuses and other incentives to recruit and retain drivers. Last year, the median salary for long-haul truckload drivers working irregular routes was about $53,000, up 15% compared with 2013, according to the American Trucking Associations, an industry group.
BNSF and Union Pacific had furloughed thousands of workers just a few years ago, as demand for coal and other products slumped. But now that economic activity has picked up, both have recalled nearly their entire furloughed workforces and are hiring rapidly. BNSF plans to hire 2,000 train, engine and yard, or TE&Y, workers, who operate and build trains, among other tasks, this year. That is an 11.4% increase from current head count of 17,500 such workers, the company said in a recent letter to federal regulators.
Union Pacific is adding at least 2,100 TE&Y workers but so far has been falling short, Chief Executive Lance Fritz said in a recent letter to regulators. In addition to signing bonuses for new workers, the Omaha, Neb.-based company is offering retention bonuses to older workers considering retirement and looking at other ways to boost its ranks. It also is planning to hire nearly 900 mechanical and engineer employees this year. Overall, Union Pacific had about 42,000 employees at the start of the year.

The hiring bonuses aren’t happening on the large freight railroads east of the Mississippi River, where companies say there is slack in the railroad hiring pool.
CSX Corp. overhauled how its network operates last year, including eliminating employees, and has about 900 workers furloughed that could be recalled as needed. The railroad isn’t hiring, CEO James Foote said in an interview, and CSX still operates with more employees per the amount of volume it moves than its peers.
Norfolk Southern Corp. , meanwhile, is planning to hire 1,400 conductor trainees this year, most of them before June, but isn’t offering hiring incentives, a spokesman said. Norfolk Southern and Union Pacific will report their latest quarterly results this week.
—Jennifer Smith contributed to this article. WSJ



Edited 1 time(s). Last edit at 04/23/18 05:27 by PennPlat.

The word is out. Working on the railroad ain't what it used to be. Look for these problems to persist.

AmHog Wrote:
-------------------------------------------------------
> The word is out. Working on the railroad ain't
> what it used to be. Look for these problems to
> persist.


Its everywhere in the labor market for mechanics who work on trucks to autos, carpenters and such so it isn't where you work its what you do. Many young people don't even want to do things which do not involve the internet or computer sitting at a work station. Too many have no skills to do things a railroad requires again except sitting at a computer. If you think I am wrong it is a true statement as I know people in the auto trades that cannot get skilled mechanics the old ones are retiring and even a 70K job doesn't interest them. More tech schools are needed and less focus on getting a college education as many of them never get a job in the field they were educated in beyond high school.

Disagree with you BAB. It comes down to dollars and sense (cents) and the way your economy has evolved.

People were lined up by the hundreds for chance at a few railroad jobs in the ‘70’s. The jobs were paid well and there were trade off’s that made up for the 24/7/365 consuming lifestyle. Bottom line, new hires don’t make much more than we did in the 70’s-80’s when you account for everything including healthcare. Time off with family is at the discretion of your employer. Rest is determined by statute not your ability to perform well.

Wouldn’t you rather stay home and work on the next killer app., trade options and crypto’s?

Sphogger

One thing not stated is the fact that many in the labor pool cannot pass DOT drug tests. Marijuana laws have been relaxed by some states, but not the Federal laws. During hiring programs applicants are informed of the requirements at the beginning and many get up and leave.

BNSF could just simply kill/end their built in non-promoted “step rate” pay system for new hires first 5 years employment. Could eliminate lot of this incentive carrot BS they’re now trying to push through... but what do I know?

Mr. MRL

Here in South Florida, kids graduating with certificates (basically a year of junior/community college) in diesel mechanics, small engine repair, etc name their own price.

One 20 year old I know graduated with a marine certificate in small boat engine repairs. Several job offers. The employer pays $22 an hour and they will pay off his small college loan over four years.

Gee whiz! Railroading's hierarchy has pushed and shoved to get crew sizes reduced, crew districts doubled & and even tripled in some cases. They have turned road service into a vitual guarantee of 12 hour days. They have come close to their never-admitted goal of running road crews in virtual perpetual motion (working on their rest over & over & over & over & over...). Thay have poked cameras into the faces of their road personnel. They have established "deadly sins" that will get you permanently terminated. Which is OK with the brass: After all, employees with less time service accrued cost less money in vaction time and other benefits earned. On & on & on & on...

They got exactly what they busted their corporate asses for. And now the RRs are having trouble attracting career-minded employees? Go figure...

Lance/199
(been there ~ done that)
 

> At the same time, the unemployment rate has fallen
> to 4.1% in the U.S., and as low as 2.8% in some
> markets where railroads are hiring.
> In response, the companies are dangling incentives
> that analysts and union leaders say are the
> highest they can recall.
> Union Pacific is offering $10,000 to $20,000

Who actually believes these fictional, intentionally misleading numbers. If the economy were that prosperous right now, individual debt levels would be decreasing instead of increasing to record heights. The truth here is that while yes, there may be more "jobs" most of them are inadequate. Most households in larger markets such as Denver need 2 or 3 incomes to get by anymore. There are plenty of qualified railroad candidates, so that is not the reason they are having a hiring shortage. The "tight labor market" is simply being used as the official excuse. There are several reasons that I see for the shortage.

These are unlike the days when a single railroad income could support a family of four no problem. Bottom line, the railroad used to provide an excellent living and benefits.......in exchange for your family life/social life/health, etc. But it was worth it because one income provided well for the entire family. Now, the railroad is an average or even low paying job per hour when compared to other lines of work. Common sense is getting to most potential candidates who are asking the question: "if the railroad job doesn't pay enough to live well off of, why would you even do it?" I am an exception to the rule as I live in eastern Idaho, where the railroad still pays well. My single income supports the entire family and it is worth it. Hense, there are no bonuses to hire out in Pocatello. This being said, I've borrowed out around the system to locations such as Chicago and California and I've seen the drastically different cost of living associated with those places. I've also noticed huge differences in the benefit structure over the past decade that are gradually reducing our once prized health benefits to nothing special. One by one the perks of being a Union Pacific employee are disappearing for both Union and Management employees. Over the past year, they even eliminated the Harriman pension for new managers, which used to be the primary reason that an employee would leave the craft and go to management. This further contributes to the problem of inexperienced, business degree management candidates that will never truly understand the railroad due to never actually working in an actual craft. They learn what the rule book says, but often not how to apply it.

The next major problem that I see is the work environment and morale. In 2018 many companies are starting to shy away from top-heavy, heavy-handed, disciplinarian workplaces because they have found that they don't work. They disgruntle employees and decrease their productivity and thus, many companies have tried to create an environment that at least attempts to acknowledge the employee as a valued asset. The railroad, on the other hand, rules through an atmosphere of fear and intimidation. While it used to be a career that one could count on for a lifetime, it has now become a stressful job that is always looking to fire you for any petty rule change that just so happened to take effect that week. The turnover rate for new hires, at least here in Pocatello is over 50%. Entire new hire classes have been fired on their probationary period for petty rule infractions caused simply by a misunderstanding of what is expected. Most of the other new hires leave on their own accord after their first furlough. Out of each class of 6 new hires, the railroad is lucky to have 2 left a couple years later. Then let's talk about the furlough issue. Furloughing has been common practice at the railroad since Christ was a Corporal. That said, the practice isn't appropriate under the economic conditions of today. In previous generations, it was expected that new employees would be furloughed ever winter (at least) for the first 5 years or so. Those employees chased work, or found other jobs or just sat at home and waited it out. Sounds great right? The key difference between, let's say the 1970's and the present is the cost of living. $100 could buy a month's groceries, A new truck was a few thousand dollars. A decent house could be bought for 40K or so and generally, the railroad paid well enough to sock some money away in savings for when the traffic fell during the winter. Not so much anymore. With the cost of living in many places, the entire railroad income is consumed by living expenses. How is one honestly supposed to work on call on the Oakland, CA extra switchman board, making 60k per year AND put away money for savings? It's just not possible. It's just a job down there, nothing special, and when they get furloughed, they leave and the railroad wastes all the time and money they spent training them. I could go on and on, but I'll cut it short. I do think that the retention problem is going to get far worse as the word is already out: "DO NOT HIRE ON AT THE RAILROAD"

As bad as it might be to find QUALIFIED candidates (pass drug tests, etc.), a bigger problem is keeping the people. Once they get into the real world of railroading many, perhaps most, quit. The concept of working 24/7/365 is bad enough but when you have managers spending every waking minute trying to discipline and fire employees (hello, UPRR), who wants it.

I just recently talked to a young employee who has hung in here at Eugene. According to him they recently hired a class for Eugene and within a short period of time the entire group had quit. There is zero morale (negative morale if that was possible), which doesn't bode well for new employees who see the dejection older people have - who wants to work in that atmosphere. All of a sudden even McDonald's starts looking pretty good.



Edited 1 time(s). Last edit at 04/23/18 08:29 by Railbaron.

BAB Wrote:
-------------------------------------------------------
> AmHog Wrote:
> --------------------------------------------------
> -----
> > The word is out. Working on the railroad ain't
> > what it used to be. Look for these problems to
> > persist.
>
>
> Its everywhere in the labor market for mechanics
> who work on trucks to autos, carpenters and such
> so it isn't where you work its what you do. Many
> young people don't even want to do things which do
> not involve the internet or computer sitting at a
> work station. Too many have no skills to do
> things a railroad requires again except sitting at
> a computer. If you think I am wrong it is a true
> statement as I know people in the auto trades that
> cannot get skilled mechanics the old ones are
> retiring and even a 70K job doesn't interest them.
> More tech schools are needed and less focus on
> getting a college education as many of them never
> get a job in the field they were educated in
> beyond high school.


Your theory may hold water elsewhere, but not at the railroad.

It's what santafe199 said. When I retired I still liked the job somewhat, I just didn't like working there anymore.

Chico43 Wrote:
-------------------------------------------------------
> ... When I retired I still liked the job somewhat, I just didn't like working there anymore.



EXACTLY!!! The very reason I retired earlier than I planned.

When I see a company offering sign on bonuses, I see a red flag of trouble. There is something wrong with that company which is causing their problem, and its usually their past history and reputation. And most forget that a good portion of that bonus disappears in taxes.

Railroad want people to work at their beck and call with no concern for the realities of their life. Safety is promoted as scripture, except when it costs money or impacts productivity, and will generally be used as a hammer to punish employees.

Trucking companies are touting their $3000 to $5000 bonuses to hire on with them. One of the big companies will offer $60,000 sign on bonus for team drivers. Anyone want to live in a metal box sleeping in parking lots for several months away from home at a time? Anyone want to be a target of law enforcement with roadside fines and expectation that absolutely everything on the truck will be perfect mechanically? Want to get to a shipper and wait five or six hours unpaid awaiting loading/unloading?

An amusement park is offering similar incentives. In the past they have offered $0.25 per hour worked if you work to a particular date, or one employee will win a car or trip.

Note that the things NOT offered are rising wages, better treatment and stability.

And the companies wonder why there is not a line at their front door and why their employees are not jumping for joy at the latest mandates.

Michael

Railbaron Wrote: > ... but when you have managers spending every waking minute trying to discipline and fire employees (hello, UPRR), who wants it ...

It is commonly held that lower level managers (re: Trainmasters & Road Foremen of Engines, or whatever their fancy-schmancy titles are now-a-days) all know the best way to move up that ladder is to dish out a minimum quota of discipline. Otherwise they are not perceived by the higher-ups as 'doing their jobs correctly'. WHO in their right mind would want to seek a career where they are constantly wrung out, strung out and very often hung out to dry by the very management that needs them to operate their trains. (Maybe this should be called feeding the hand that bites you... )

Lance/199

Railbaron Wrote:
-------------------------------------------------------
> Chico43 Wrote:
> --------------------------------------------------
> -----
> > ... When I retired I still liked the job
> somewhat, I just didn't like working there
> anymore.
>
>
>
> EXACTLY!!! The very reason I retired earlier than
> I planned.


Me too! I like running trains.......I hate Union Pacific

Chico43 Wrote:
-------------------------------------------------------
> When I retired I still
> liked the job somewhat, I just didn't like working
> there anymore.



I miss running the train and the people I worked with, but I do not miss working for a railroad.

There are plenty of what we once called blue collar jobs that pay well. Auto body shop guys, electrical contractors, plumbers, heating and air conditioning technicians, etc. Master carpenters, painters, etc. People who offer value over and above commodity labor.

You sleep in your own bed at night, you hold a license in some cases, etc. You can support a family. I mentioned the small boat motor repairs tech up thread.

But, like the problem with the railroads, a boss who screws you over, or works you to the bone, or sees you as an obstacle is going to make any job a horror show.

In 1997 I paid the railroad (or the college) $2500 to take a five week "railroad" course with the only commitment a job interview with "some" railroad. Good thing it worked out ok at my age back then. Life does funny things to you at times.

santafe199 Wrote:
-------------------------------------------------------

> It is commonly held that lower level managers (re:
> Trainmasters & Road Foremen of Engines, or
> whatever their fancy-schmancy titles are
> now-a-days) all know the best way to move up that
> ladder is to dish out a minimum quota of
> discipline. Otherwise they are not perceived by
> the higher-ups as 'doing their jobs correctly'.


In my case, being a labor assistant chief and not management, the perception was that I wasn't working because there was no chaos. Productivity is measured by the fires you fight, not the prevention of fires. The heroes brag about the catastrophes they were involved in fixing. I came to work, ran my railroad and went home. There was nothing to brag about. While I was working my (#2 end) off to make my railroad not have constant fires and explosions to fight, it looked too easy for managers. One Superintendent of Transportation told me that I spend entirely too much time planning and not enough working.

TAW

Oh, the "old" days as a hoghead:

We used to have our own SP Hospitals and doctor networks. We had the 16 hour law. We were paid initial and final delay at 12 1/2 miles per hour. Our days were 100 miles with overtime after 8 hrs. We were paid one hour for picking up and one hour for setting out units. On the SP we were allowed to tie up for 8-10 or 12 hours rest. It was never a real problem marking off or you were never refused marking off sick.

In 64 SP cut all the fireman jobs off in CA by appealing to the voters. The SP agreed to pay the engineer $4.00 a hundred miles to work without a fireman. That started a real split of the crafts. It wasn't long before they were running out of engineers & fireman. In 68 they started hiring in engine service, (we still had all the passenger trains in the City plus inter-city passenger trains that needed a fireman on them.) Well, then someone decided that we were paid too much and they started on an austerity drive to take away a good portion of our pay. Oregon had a full crew law for another 10 years, I think, but they started on that later.

First thing they did was to give the unions the Southern Pacific Hospital Department and Association in the 70s. There thinking was it got rid of a big expense and at the same time, lived up the agreement provisions of health care. The unions didn't have any business trying to run a health care system and it wasn't long the system went bust. In the next agreement, the carriers agreed to a health plan BUT we had to give back some of our provisions.

It didn't take long until we lost the 1 hour picking up and setting out units. We lost our Initial & Terminal delay. Our 100 mile divisions were increased to double or triple miles. We lost the right to go eat in route. Every time the carriers pleaded poverty, an emergency board would side with the carriers. The list went on.

In the early 70s, the SP took part in "Hate Week". The UTU contract was due to expire on a certain date. The UTU could not strike until about a week later. Well now the true colors come out. The Engineers were under the BLE contract and were not part of "Hate Week".

What the SP did was to throw out ALL contracts with UTU and start their own. First off, you were paid minimum wage. Period. They would call a switchman in LA to be a brakeman to Sacramento. Call a fireman for a helper but only pay him $10.00. When people got to where the tied up, they didn't call them in order or anything. else. No meals, no lodging. We had an old conductor in SLO wind up in Dunsmuir after being called to LA, then up the valley, through Roseville and finally got to Dunsmuir after 6 days.

I was on a work train with Frasier Neal as the engineer and Roy Ables as the conductor. We had been working between Santa Barbara and Surf for 3 days. Well when we went to work we got a message that read: Work train works between Santa Barbara and Surf. When done, work train will run to LA and tie up. Well, the UTU was allowed to finally go on strike at midnight that night. Roy had it figured just how to work it. When we finally got back to Surf to drop our train, we had just enough time to make either SLO or Santa Barb. That was it. Well, Roy goes in & talks to the dispatcher. They busted our work order and gave us orders to run extra to SLO. We made the switch and died.

We were never paid for hate week but it showed what the SP could and would do if they wanted. It showed us how they didn't give a crap about their employees.

UP is is doing the same thing.


I sure someone has something to add to this.


Nudge