The Real Price of Gas — Why Employers Should Consider the Commute

With gas prices at record highs, many job seekers and employees continue to push for work-from-home (WFH) accommodations. While remote scenarios became standard during the pandemic, many employers are now calling for a full return-to-office (RTO) as coronavirus cases have continued to stay relatively low. Though these trends may remain steady, high gas prices will likely continue to fuel friction between employees who want remote work and employers who prefer their personnel be in the office.

The Average Cost of Gas in a Five-day Workweek

Transportation costs have been reason enough for some to quit in search of an opportunity to work remote. In a five-day workweek, commuters drive an average of 41 miles a day, equivalent to 10.7K miles a year — here’s a cost breakdown based on the national average:

• $4.91 national average cost of gas (and climbing)
• $9 spent on gas for each working day
• $196 spent on gas each month
• $84 monthly increase from 2019

Since 2019, there has been a 74% increase in gas price. These numbers are of course relative to pay rate and location. For example, employees who make $15 an hour give up 9% of their monthly income commuting to work five days a week. Even for candidates making $25 an hour, it costs them 5.6% of their monthly income. As prices of gas vary by state, employers must also take location into consideration as they contemplate work from home options. In California, for instance, gas costs $6.37 per gallon, which means an employee making $15 an hour is spending 11.8% of their monthly paycheck on fuel alone.

What’s Driving the Increase in Gas Prices?

While almost certainly a direct result of the war in Ukraine and Russian sanctions, the recent high price for gasoline is also a product of the pandemic.

As noted in Forbes Advisor, “Crude oil, the natural resource used to produce gasoline and diesel fuel, has seen dramatic changes to its supply throughout the pandemic. When COVID-19 first hit worldwide, and fewer people were on the roads, major oil-producing companies cut back on their oil production.” Because Russia supplies 10% of the world’s oil, the current U.S. ban on all Russian oil imports has had major trickle down effects.

Today, as more employees are being asked to return to the office and need gas to fuel their commutes, existing oil supplies cannot meet the demand, therefore driving up the price of gas even further.

The Cost to Employees Beyond the Price Tag

Although prices at the gas station are enough for some workers to reconsider their current job situations, studies show a long commute can also have negative effects on physical and mental wellbeing that some employees may want to take into consideration when returning to the roads.

Physical conditions, such as respiratory issues, have been noted along with less visible symptoms, like a decline in overall mental health. Moreover, these studies also correlate an increase in overall mileage with an increase in overall stress levels — further emphasizing the need for employers to consider building an organizational culture that supports a healthy work/life balance, which will in turn support retention efforts.

In consideration of the added stressors that go along with budgeting, as gas price rises, many workers will likely need to spend more time assessing their paycheck saving strategies just to ensure they have enough set aside for gas money. This wouldn’t be as much of a prominent stressor when working remotely, as money that would be spent on fuel can now go toward other necessities or savings.

Recent labor market reports show large numbers of workers quitting their jobs in search of this better work/life balance. As gas costs continue to rise and some employers remain reluctant to offer remote options, these factors combined are likely to further fuel the Great Resignation.

What Employers Can Do to Meet Worker Needs

If retention is the goal, employers must be willing to understand and — at the very least — meet workers in the middle. One option to ease into telecommuting is a hybrid workweek. Working from home two days a week and reducing the number of in-office workdays to three a week lowers the cost for candidates making $15, $20 and $25 per hour down to 5.4%, 4.1% and 3.3% of their monthly income, respectively.

Because retention efforts remain at the forefront of market trends, employers should reevaluate their RTO push if they aim to retain workers. Partnering with a managed solutions provider can help support these efforts by supplying highly qualified teams of professionals to set up successful remote or hybrid work environments.

In today’s competitive market, it’s not enough to simply hire skilled talent. More work needs to be done post-hiring, much of which involves staying on top of market trends to better assess and meet employee needs as they evolve in response to market conditions.

Check out Aston Carter’s monthly labor report to stay informed on what’s happening in your industry.

If your company could benefit from the help of a managed solutions provider, contact Aston Carter today.