Why do most employees end up searching for new jobs? One of the top reasons for dissatisfaction is low wages. Many employers do not actually realize how low their employees’ effective wages are however, because they do not account for all the factors which burn a hole in their employees’ pockets—one of which is the daily commute.
It actually is surprisingly expensive to commute to work in a car each day. For each mile an employee lives from the workplace, there are around $170 in annual car expenses. On top of that, there is all that lost time—which employers do not compensate for. For an employee who makes $25 an hour, that is the equivalent in $625 in lost wages per mile between home and work every year.
Just how much does that add up to? If an employee is located 11 miles from work, over a year that is $8,745. Over a 30 year career, it is an astounding $262,350. It is no wonder most workers are woefully behind in saving for retirement.
The big question for employers is of course, “What can I do about it?” In some cases, there may be very little you can do, but consider the following ideas:
Set up carpooling to reduce annual vehicular expenses.
Encourage workers to consider alternatives like riding a bike or taking public transportation.
If appropriate, offer employee housing near the worksite—or help connect employees with nearby apartments.
If you have many employees scattered around a metropolitan area and you have the budget to open more offices, consider doing so.
Allow employees who can do their jobs from home to telecommute part-time or full-time.
Survey employees and do the math to find out what the average commute is like. Consider raising wages accordingly.
You may not fully be able to compensate for the cost of commuting, but there are many steps you can take as an employer to reduce the cost burden for your valued staff. To fully visualize just how much the daily commute may be costing your employees, take a look at this insightful infographic from InvestmentZen: