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Company cars or car allowance benefits have long been popular, especially among company executives. They first emerged in the 1960s and quickly became a desirable part of the rewards and benefits package. Some workers view these benefits as a reward for working their way into a higher-level position.
As the working world has shifted post pandemic, many companies have moved toward more sustainable policies, in addition to having many employees work remotely from home. With these changes, we can expect to see a change in transportation benefits.
Companies have commonly offered at least 4 types of transportation benefits:
For some companies, this might mean offering a parking subsidy in place of a car allowance. Another option could be partnering with your local public transportation agencies and offering your employees a free or reduced rate on monthly passes. Let’s dive into some of the results from the recently published Transportation Policies and Costs report form Mercer. The real-world changes in transportation benefits might surprise you!
Would you believe that we’re not seeing a dip in the number of companies offering car allowances? Despite the shift to more remote and work-from-home positions, Mercer’s May 2023 Transportation Policies and Costs report shows that 74% of respondents continue to offer a car allowance. By comparison, the same report in 2019 showed that 77% of companies offered a car allowance.
This continued benefit may seem counterintuitive. However, many businesses want their workers to return to the workplace and offering a car allowance, or other types of transportation benefits, could be one way to help encourage this.
Many businesses are turning to commuter benefits to encourage workers to return to the office. This kind of support can ease the transition from working at home to working onsite.
So, why offer commuter benefits?
No matter what kind of commuter benefits you offer, employees want to feel recognized for the work they do. Offering these benefits is an easy way to do that. Commuter benefits can also fulfill employees’ need to get “more” from their employers and have an impact on their day-to-day experience.
Even with the increase in car allowances, companies are still focused on creating a better, greener future with an emphasis on sustainability and green transportation policies. In the May 2023 Mercer Transportation Policies report, we found some exciting green transportation updates:
Companies aren’t making these decisions in a vacuum. Employees and employers alike recognize the pressing need to create a greener future. According to the 2022–2023 Global Talent Trends report, 97% of employees expect their employers to pursue a sustainability agenda.
It’s important to recognize the difference between an employee whose transportation needs are critical to their job, such as some sales and service positions, and most employees who simply need to travel to and from the office.
For employees in the first category, transportation isn’t a benefit but a necessary tool to do their job. For other types of employees, offering commuter benefits is a nice perk but not a necessity. If some employees feel slighted because they don’t get this “benefit,” make sure they understand why some employees need company-provided transportation to properly do their jobs while others don’t.
Ultimately, deciding whether your company offers any type of transportation benefit will depend on what your employees want. While the job market is continually changing, you always want to put yourself in a competitive position. If having transportation benefit is the difference between a potential employee choosing your company versus another company, then offering that benefit could be worth it.
On the other side, employees want to work for companies that support sustainability and take care of their resources. Many employees may see offering transportation benefits as wasteful and extravagant, especially if those benefits fall outside of basic work transportation requirements.
The best and simplest way to determine how your employees feel about transportation and many other important issues is to ask them. By creating an employee research strategy that includes employee listening tools, you can learn the value your employees place on benefits and rewards, uncover their unmet needs, and even create digital focus groups for specific issues.
These tools can help you better develop your strategic total rewards package and become an appealing and rewarding place to work.
Consider the state of your current transportation benefits. Do you need to cut back on vehicle allowances? Should you consider shifting from providing vehicles to paying for fuel?
Mercer is here to help you stay up-to-date with the current trends in vehicles and other transportation benefits.
Contact us at email@example.com or 855-286-5302 today!