Fuel for Change: Incentive Inspiration at the Pump
September 04, 2008
High prices at the pump have inspired new ideas for incentives
By Rob Carey
The soaring cost of gas has caused companies to use more incentives—and even alter their working structures—to keep employees happy and productive.
The numbers are stark, and ugly too: The average American commutes about 30 miles round-trip for work each day. Over the past four years, the price of gasoline has doubled: from $2.02 per gallon in May 2004, to $3.04 in August 2006, to above $4.00 per gallon at press time. So from these figures, it's estimated that the majority of employees would need more than a 2 percent raise simply to offset the increased cost of commuting.
Such startling cost pressures on employees could soon produce a staffing crisis for employers. A recent survey by Chicago outplacement firm Challenger, Gray & Christmas found that 34 percent of responding firms have had a preferred candidate turn down a job offer due to commuting factors.
Another survey, by Florida State University's College of Business, found that 33 percent of 800 full-time workers who commute via personal transportation said they'd quit their jobs for a comparable one closer to home if they had the chance, due in large part to higher fuel prices.
Furthermore, in sectors such as retail and restaurants, where proximity to and convenience of the workplace are high employee priorities, turnover is now higher than the long-term average. In other sectors—and among sales reps in every industry—grumbles about the cost of commuting are getting louder by the day.
But many employers have responded to the situation, not only with financial assistance for their employees, but also with substantial changes in the way their companies operate. And both approaches are serving to help employees feel valued and stay motivated to be productive for their companies.
Show Me the Money
Executives at Stamford, Conn.–based human resources firm OperationsInc knew that employees were talking about the rising cost of coming to work. In response, the firm gave out American Express credit cards to its five on-site employees, on which they can charge as much as $100 a month for fuel. "At some point, someone will be in a position to have to make some choices," says CEO David Lewis in the Hartford Courant. "I don't want one of those choices to be whether they can continue to work in Stamford."
Brandermill Woods Retirement Community in Richmond, Va., has given gas cards to its 235 employees monthly since May: $20 cards for full-timers, $10 cards for part-timers. In St. Louis, manufacturing company EFC International has begun subsidizing some of its employees' fuel costs, based on distance traveled to work. The firm now reimburses fuel costs above $2.50 per gallon, and assumes a usage rate of 20 miles per gallon. The average employee saves about $50 per month under this program. STS Telecom, a nationwide VoIP service provider in Cooper City, Fla., recently implemented a $2-per-gallon rebate for miles driven to and from work for its 75 in-office employees.
In Richmond, Virginia Commonwealth University Health System has gone even further: It's giving between $100 and $250 to each of its 7,200 employees—in all, a whopping $1 million—to ease commuting costs. Amounts are based not only on employees' commuting distances, but also on tenure and performance assessments.
Interestingly, some firms that are part of the motivation and incentive industry, and that regularly dole out rewards to employees, are getting unusually strong reactions to gas-card programs. "The team was a bit shocked to get gas cards from management, and we received thank-you letters from several team members," says Jaki Baskow, president of events- and destination-management firm Baskow & Associates in Las Vegas. "It became clear that this gesture was appreciated so much because it was needed."
And at Educorp Training & Consulting in Irving, Texas, a new monthly gas-card awards program for extra effort has been a big hit. "You can see how pleased people are to get gas cards," says president Sue Murray. "It makes the other employees want to get them as well." Along with each card, Murray gives what she calls a "silly homemade trophy" for office display, so that all employees are reminded throughout the month that such an award is available. "Personalized trophies mean a lot more, even though they have minimal cost, and they stay on people's desks for months," she adds. "It becomes a contest as to who will get one next."
Creativity has crept into companies' offers in other forms as well: Some firms now will reimburse all commuting costs for any employees who put company advertisements on their cars.
A recent survey by the Society for Human Resource Management found that companies have noticeably increased their fuel-cost remedies over the past year, with 14 percent offering gas-card rewards, versus just 6 percent in 2007. Another 2 percent say they now offer cost-of-living raises as a specific response to gas prices. The survey also found that 42 percent of firms raised mileage reimbursement rates for company sales representatives, up from 13 percent a year ago.
 Beyond Cash
Many more companies, however, cannot afford a gas-card or gas-rebate program, not to mention straight salary increases, the effects of which are negated significantly by taxation. Fortunately, there are a host of other options. In fact, another survey of human resources personnel, this one conducted by Challenger in late May, found that 57 percent of employers do offer some other workplace program to ease commuting costs. Twenty percent said they organize employee carpools (sometimes offering incentives to boost frequency of use), while 18 percent subsidize the cost of public transportation through pre-tax payment plans, agreements with transportation providers, or some other means.
But it's the first and fourth most-used solutions cited by respondents that show the fundamental changes that high fuel prices are bringing to many organizations—solutions that may well result in improved productivity, morale and loyalty. The first: a condensed workweek comprising four 10-hour days, cited by 23 percent of HR personnel. The other: increased telecommuting offerings, cited by 14 percent.
There is some work involved with setting up such situations, however. Companies offering formal or informal programs for alternate work schedules or flexible start and end times to the workday will find that "they must confront cultural issues, which take work/life and change management exper-tise," says Kathie Lingle, executive director of the Alliance for Work-Life Progress at WorldatWork, an HR/employee-rewards association. "But it requires nothing more than instilling a good management style" that sends clear expectations of what tasks will be done, by whom, and when—and how often communications between employee and manager must take place.
"These programs can become part of the employee value proposition, just like a company's commitment to other aspects of the employment experience," says Laura Sejen, global practice director for strategic rewards at consulting firm Watson Wyatt Worldwide.
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