To counter rising gas prices, employers revisit subsidies and work-from-home arrangements

Gas prices are on the rise due to the US-Israeli war with Iran, making commutes costlier for employees.

Since the war began in February, the average daily commuting cost for US employees has risen by 9%, from $15.48 to $16.93, according to an analysis from consulting firm Gartner. If gas prices go up even higher, the average employee could see commuting costs rise to nearly $19 a day, per Gartner’s calculations.

Such trends are likely to add to workers’ already existing financial stress. Nearly 77% of full-time workers reported worrying about the economy when Bank of America surveyed them in May of last year, and a growing share (26%) were seeking financial help from their employer through support such as emergency savings or debt paydown.

To support workers who are experiencing higher commuting costs, employers can consider offering gas subsidies or allowing additional flexibility on working locations, at least temporarily, Benjamin Ashley, a senior research specialist with Gartner, said.

Monetary benefits. If budget allows, HR teams may elect to offer employees gas subsidies or a cost-offsetting bonus to account for “the elevated financial burden that they’re dealing with today,” Ashley said.

DoorDash launched an emergency relief program along these lines on Mar. 23, pledging to give drivers with the delivery platform up to $15 a week if they drive 125 miles or more. Gig workers with a DoorDash debit card can also earn 10% cash back on certain cash purchases.

Employers took similar steps in 2022, when gas prices spiked in the months following Russia’s invasion of Ukraine. A Naples, Florida-based retailer, Driftwood Garden Center, gave employees 20%–30% raises that April, in addition to gas stipends between $30 and $50 for each paycheck, the Wall Street Journal reported. “We almost had to do it or we risk losing a lot of very good employees,” chief executive Craig Hazelett told the newspaper.

HR leaders should also remind employees of any commuter benefits programs they may have, Ashley said. Such programs typically allow employees to set aside pre-tax dollars for commuting costs. Subsidizing temporary shuttles for centrally located employees is another option.

Offering flexibility. Employers can be flexible on workers’ locations or schedules, as well, to help offset commuting costs, Ashley said. That might look like allowing employees to come into the office one less day per week, or adjusting their hours to avoid rush hour.

Sources recently told HR Brew that in-office mandates could pose a challenge for companies’ retention strategies if high gas prices persist. “If you’re an employer, and you’ve got people who are on the edge of, let’s say, ‘Is this job affordable? Are there other things I could be doing instead of this?’ You could have some risk of some turnover,” Ron Porter, a senior partner at consulting firm Korn Ferry, said.

Gartner’s Ashley added that HR teams should be intentional with their communication around accommodations tied to gas prices, particularly if they’re temporary. Employees should understand “the scope of the potential work-from-home flexibility,” as well as who is eligible for benefits such as gas subsidies.