Helping Employees Deal with the High Cost of Getting to Work

Organizations are taking a variety of creative steps to help their employees offset the high cost of gasoline. In addition to helping to organize employee ride-sharing and carpooling programs, some U.S. companies support increased use of telecommuting and compressed work weeks, according to Mercer’s 2008 Gas Price Impact SnapShot™ Survey.

Within the next several months, almost one in four employers (22%) are planning to offer at least some of their employees the option of a four-day work week, and 24% are planning to allow more employees to telecommute.

Other survey findings reveal that two-thirds (66%) of responding companies plan to increase mileage reimbursement amounts up to 20% for business-related travel due to higher gas prices, while 41% anticipate raising car allowance provisions up to 20%.

“Employers are struggling with the decision of whether or not to help their employees offset the burden of higher gas prices. While they are concerned about attraction and retention, employers are also dealing with belt tightening due to a slow economy,” said Mitch Barnes, principal at Mercer. “Thus, companies are embracing techniques to reduce commuting time and expense by encouraging carpooling, telecommuting, and compressed work weeks. Or, if they decide to offer subsidies to employees, such as prepaid gas cards, these may be in the form of performance incentives rather than as a new benefit offered to all employees.”

Creative alternatives
With gas prices still high despite moderating recently, organizations are finding innovative, low-cost and environmentally friendly ways to help employees manage the escalating costs of their commutes to work. To encourage ride-sharing, some companies offer special parking privileges for carpooling, company-funded vanpools and van services from bus and train stations. According to Mercer’s survey, 30% of responding companies already implement carpooling programs, while another 23% plan to do so in the next six months.

Other organizations provide prepaid gas cards for perfect attendance, gas card giveaways for top performance and subsidies for public transportation costs. Mercer’s survey shows that 20% of companies currently provide employees a subsidy for public transportation costs, while another eight percent plan to offer this option in the next six months.

“These options are more practical than raising salaries to cover high gasoline costs because of the implications associated with increasing pay, such as employer taxes, 401(k) matches based on percentage of pay and bonus payouts that are a percentage of pay,” explained Mr. Barnes. “Making the most of creative alternatives to help employees save on commuting costs is good management practice, supports attraction and retention concerns, and doesn’t add significantly to corporate expenses.”

Mercer’s 2008 Gas Price Impact SnapShot™ Survey, which assesses how organizations are determining what action—if any—they will take, includes responses from more than 300 organizations across the United States and was conducted in July 2008.

Mercer’s 2008 Gas Price Impact SnapShot™ Survey is available for free online at www.imercer.com/snapshot


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