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Jeremy Fennema – Tech Innovation Alchemist
- Inflation is at a 41-year high and soaring gas prices are taking a toll across the country, with hourly workers bearing the brunt of these challenges — 81% reported that record gas prices have made it hard to pay other expenses.
- Almost half of employees in a survey conducted by PwC reported that financial stress has become a distraction at work.
- Compt, an HR tech platform that helps businesses implement employee perk programs, is seeing that more of their customers are activating the “Home” and “Family” stipends categories to cover increased costs for things like gas.
If companies are going to force employees to return to the office, they might want to pay for the commute.
At least, that’s what workers across the nation are saying because they can’t afford to come in otherwise — and some employers are paying up.
The 41-year high inflation and soaring gas prices are taking a toll across the country. Hourly workers are bearing the brunt of these challenges, with a staggering 81% of them reporting that record prices at the gas pump have had a negative effect on their ability to pay other expenses.
Compt, an HR tech platform that helps businesses implement employee perk programs, is seeing that more of their customers are activating the “Home” and “Family” stipends categories to cover increased costs for things like gas. This has a notable impact on families and eases the burden of yet another expense they would otherwise have to worry about when commuting to the office.
They’re also taking advantage of two nontaxable categories on Compt’s platform: Commuter Parking and Commuter Transit.
The number of expenses submitted with “gas” in the description more than doubled compared to January 2022 and April 2022, Compt reported.
Commuter-specific stipend categories (parking and transit) saw a slight increase from 2.12% in Q4 of 2021 to 2.35% Q1 2022. While that percentage seems small, it represents thousands of dollars in claims.
When looking at year-over-year data, the findings are more significant. In May 2021, commuter expenses accounted for only .23% of all claims. That number has since increased 10 times or almost 922%.
Commuter expenses increased from August to December 2021, plateaued, and then increased again as Q1 2022 progressed. Claims spiked in April shortly after a smattering of news stories were published about the mass return-to-office effort.
“For many employees, working fully remote for the past 2.5 years has shown that productivity remains high and they feel a better sense of balance in their lives,” Compt Founder and CEO Amy Spurling said. “If companies insist on employees returning to the office during a time of long commutes and sky-high gas prices, they will have to entice people to do so.”
She said that she’s seen that some companies are choosing to offer employee perk stipends to drive specific behavior.
“A stipend allotment may be larger for in-office people than their remote colleagues to cover benefits like food, gas, commute (parking/transit), or even wellness. In remote-first companies looking to offload expensive office spaces, we see the reverse happening,” Spurling said.
A new Harris Poll survey (commissioned by DailyPay and Funding Our Future) captures the amount of money respondents are saving, the impact of increased gas prices, their ability to pay for other expenses (rent, groceries), taking out payday loans, and the stress of managing personal finances.
The poll revealed that 75% of workers surveyed struggled to pay their bills this year due to recent price surges.
Nearly half of hourly employees reported difficulties paying for their groceries, while 40% struggled with utility bills and 34% had a hard time covering rent or making mortgage payments.
In order to navigate the rising cost of gas and other financial challenges, 22% of employees surveyed took out a payday loan in 2022. These struggles are further exacerbated by the fact that 35% of all hourly workers report receiving no pay increase over the past year, and this figure increases to 49% for hourly workers with an annual household income of under $50k, according to DailyPay.
Inflation and its after-effects can be emotionally taxing on workers, as it may cause them to lose control over their financial well-being. Almost half of employees in a survey conducted by PwC reported that financial stress has become a distraction at work.
Employers have many options to help their employees through this period. If offering employees raises or gas cards is not financially viable for the company, employers can provide support in other ways, such as offering useful financial wellness benefits.
Will workers utilize coworking spaces less because it costs more to drive to them?
Players in this sector might be wondering whether the increases in fuel will increase or decrease remote work, and/or increase or decrease working near home in suburban community-based coworking and business centers.
IWG says that they will add up to 2,000 more locations in the next two years, and the greatest majority of these new centers will be in the suburbs of primary and secondary market cities.
Organizations will need to evaluate the needs of the workforce, as well as what is most sustainable. If inflation and high gas prices do not subside, they will have a significantly negative impact on the workforce, as well as the future of how work gets done.
