The Squeeze is Real

Between companies trying to lure employees back to the office and the current difficulty in recruiting and retaining employees, the rising cost of gasoline is not helping out.

It is estimated that for every penny increase in the cost of gasoline, Americans pay an extra $4 million per day for fuel. Depending on the length of your employees commute, the hit on their wallets is real.

Many of my clients are trying to find creative ways to help employees reduce the financial burden of commuting to the office as the price of gas continues to go up.

A nonprofit CEO is contemplating if giving pay increases now will impact her ability to also give the annual increase employees anticipate at the start of the calendar year.

Another client was thinking of issuing gas cards to all employees as a thank you gift until they realized that gift cards are considered taxable income by the IRS so a $50 gift card, depending on a variety of factors, could end up being worth only $40 or so and will result in additional paperwork and tracking.

Reimbursing driving expenses to and from work is an option being considered at yet another company. While this option has some tax advantages, it also involves complicating factors such as required paperwork and tracking as well as the equity issue for employees who use public transportation, bike, or rideshare.

For a government client recruiting new talent has become even harder.

“We’ve had great candidates for some of our positions, but they aren’t local. The work can be done remotely, but legally we can’t reimburse them for travel to and from work. So if we need them to come in, the cost of getting here is on them. This expense makes our offer less competitive and yet, our hands are tied.”

Other clients who were resistant to continuing to allow employees to work from home are being more lenient than they were intending just to offset the burden of the increasing cost of gas.

At my own company, even though we work remotely, I gave a small cost of living raise to offset the increasing expenses associated with just surviving these days.

The tricky part for small businesses who are seeking to attract, retain, and just do right by their employees is that for the businesses themselves, the cost of everything is also rising. The big question is, “How can we help out our employees without cutting too deeply into already shrinking profit margins?”

The squeeze is real.

Is this conversation happening in your workplace? I’d love to hear how you are being impacted and what solutions you’re pondering.