As organizations navigate the complexities of returning to office (RTO) arrangements, one source of employee pushback can be the financial challenges associated with commuting costs. With rising fuel prices, public transportation fees, and the overall economic climate, the additional expense can feel significant. Companies can help demonstrate appreciation for employees and bolster their financial wellbeing by providing effective commuter benefits.
The financial burden of commuting
Commuting can be one of the most significant expenses employees encounter. AAA estimates that the average cost of owning and operating a vehicle exceeds $12,000 per year, or $1,000 each month. The U.S. Department of Transportation estimates that about 10% of an average household’s expenses go to transportation costs – even for those who rely on public transportation, monthly passes can add substantial financial pressure.
These high costs can lead to stress and anxiety, affecting not only employees' financial wellbeing but also their overall productivity and job satisfaction. As companies adopt RTO strategies, recognizing and addressing these challenges is critical. The last few years have demonstrated that employees value support from their employers, especially regarding affordability and financial stability. By offering commuter benefits, businesses can contribute to alleviating some of these financial burdens, fostering a more positive work environment.
The power of commuter benefits
Commuter benefits are employer-sponsored programs designed to help employees pay for transportation expenses associated with traveling to and from work. These benefits are especially valuable to businesses as they provide a direct and tangible ROI directly to employees. Commuter benefits can include pre-tax payroll deductions for commuting costs, subsidies for public transportation, or reimbursement plans for parking. By implementing these benefits, organizations can show their commitment to employee needs during RTO transitions.
1. Tax advantages for employers and employees
One of the most compelling reasons for organizations to offer commuter benefits is the potential tax savings. For employees, contributions made through pre-tax payroll deductions reduce their taxable income, leading to higher take-home pay. Additionally, employers can gain tax advantages by deducting these expenses from their taxable income. A strategy that benefits both parties and helps create a culture of financial wellbeing.
2. Reduced commuting costs
By providing commuter benefits, employers can effectively lower employees' commuting costs. For example, when employees use pre-tax dollars to pay for public transportation or parking, they can save a significant amount each month. These savings can be crucial for employees struggling with increased expenses in other areas of their lives and ensure that employees feel like a respected, valuable member of the team.
3. Encouraging sustainable commuting options
Offering commuter benefits can also encourage the use of public transportation and support the environmental or social responsibility goals of the company. By providing incentives for employees to carpool, bike, or take public transport, companies can contribute to a reduction in traffic congestion, greenhouse gas emissions, and overall environmental impact. These initiatives are especially important to younger generations and can bolster a company's reputation as a socially responsible organization.
Maximizing the impact of commuter benefits
To maximize the impact of commuter benefits on employee financial wellbeing, organizations should take a proactive approach. Here are some strategies that can help create an effective commuter benefits program:
1. Educate employees
Many employees might not be aware of the financial advantages that commuter benefits offer. Organizations should take the initiative to educate their workforce on available options, how they work, and the potential savings involved. This can be done through workshops, informational sessions, or easy-to-read guides that explain the benefits clearly.
2. Offer flexible options
Recognizing that each employee’s commuting situation is unique, employers should consider providing flexible options for commuter benefits. This flexibility could include choices between public transit passes, parking reimbursement, micromobility options, or company-sponsored rideshare services. By accommodating diverse commuting needs, organizations can increase participation in these programs.
3. Solicit feedback
Employers should regularly solicit feedback from employees regarding the commuter benefits program. By understanding what employees value and what challenges they face while commuting, companies can modify and enhance their offerings to better meet the needs of their workforce. Implementing changes based on feedback demonstrates a company’s commitment to employee wellbeing.
As companies navigate the complexities of RTO, they must prioritize employee financial wellbeing, particularly regarding commuting costs. Commuter benefits present an effective way to alleviate financial strain, encourage sustainable commuting, and support employees during this transitional period. By embracing and enhancing these benefits, organizations can create a more engaged, productive, and satisfied workforce. In challenging times, small measures can make a significant difference, and offering commuter benefits is a step towards a healthier and happier workplace.
Schedule a demo with a member of our team to see how commuter benefits fit into your organization's EVP!
