Rising Fuel Prices Spark Creative Employee Benefits

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Hardly a day goes by that we don't hear a news report about another record high for the cost of oil. To make matters worse, there is no sector in the economy that is insulated from rising costs. As fellow consumers, business leaders can genuinely sympathize with employees. Employers can capitalize on this highly volatile time to build employee loyalty, increase morale and avoid costly and unwanted turnover.

According to the Federal Highway Administration, transportation is the second largest household expenditure (housing is number one); exceeding medical care, food, and recreational expenses. Depending on an employee's income, these expenditures can range from 10 to 30 percent of his or her monthly expenses. As prices at the gas pump continue to rise, commuting costs have taken a bigger chunk out of employees' pockets.

In May 2008, the Society for Human Resource Management conducted a survey of 553 randomly selected HR professionals on "What Employers Are Doing to Help Their Employees with High Gas Prices." The results revealed the following information about actions employers have taken to provide some welcome relief to employees.

• The most common benefit offered by employers (42 percent of the companies surveyed) is to increase mileage reimbursement to the IRS Standard. As of July 1, the IRS raised the mileage rate to 58.5 cents a mile for all business miles driven from July 1 through December 31, 2008.
• The second most prevalent benefit offered by employers (18 percent of those surveyed) is allowing staff to telecommute. This is a significant change from the 2007 survey results, in which only 4 percent of the surveyed employers permitted telecommuting.
• Presenting public transportation discounts and gas cards to employees is the third most common benefit offered.
• A growing number of employers (12 percent) are helping employees arrange car pools, which generally include reserved parking places for participants.
• Other benefits employers are offering include flexible scheduling, such as compressed workweeks, varying work hours and helping employees find a residence closer to work.

According to Kathie Lingle, Executive Director of the Alliance for Work-Life Progress, there will be a trend to "greater volumes of telecommuting among groups that have never done it… and more and more employees will gravitate towards smaller employers as the bigger ones fail to deliver because of their ingrained anti-flex cultures." This is much like the huge waves of women that migrated out of big firms to start their own businesses over the past 10 to 15 years, according to Lingle. Only this time, "the tidal wave won't be just women."

Private companies have a natural advantage in that they can respond more quickly and flexibly to employees' concerns. With some insight and creativity, you can implement benefits that will help employees cope with the increased costs of commuting and will be valued by your workforce.

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Tandem Partners is an organizational consulting firm specializing in people strategies that drive business results. For more information on building employee loyalty and increasing morale in your workplace, please contact Gina Resch at 443-589-1153 or via email: gina@tandem-partners.com .

Copyright 2008 Tandem Partners

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