In a world where the daily commute can sometimes feel like an epic journey, organizations are increasingly exploring commuter benefits as a way to attract and retain talent. In fact, approximately 23% of U.S. workers quit a jobbecause of a difficult commute. And 85% reported they would be willing to take a pay cut if it meant having a shorter commute.
Whether your employees are subway surfers, bus riders, bike riders, or avid walkers, a well-crafted commuter benefits program can make their journey more enjoyable and less stressful.
But the question remains—how can these benefits fit into your broader HR strategy? Let's delve into the world of commuter benefits, how it works, and how you can use it to bolster your organization.
What are Commuter Benefits?
Commuter benefits, often known as transportation or transit benefits, are offered by employers to alleviate the cost and stress of commuting to work. These benefits can be part of a comprehensive employee compensation package. Examples include reimbursements or subsidies for public transportation, cycling-related expenses, and carpooling or vanpooling services. Some organizations even offer parking benefits at or near the workplace, which is particularly valuable in urban areas where parking can be expensive.
How do Commuter Benefits Work?
The structure of commuter benefits can vary widely depending on the organization and its specific needs. Some employers may provide a fixed monthly allowance to cover commuting costs, while others may offer benefits in kind, such as shuttle services or company-provided bicycles. There may also be tax incentives available for employers, which is another positive reason to provide these benefits to your employees.
One of the most significant advantages of commuter benefits is they are typically pre-tax. According to the IRS, employers can allow employees to use pre-tax dollars to pay for qualified transportation costs. This means that these costs can be deducted from an employee's gross income before taxes are calculated, effectively reducing their taxable income.
As a result, both employees and employers can save on taxes. For the employees, the more they spend on commuting, the more they can deduct from their taxable income, leading to substantial savings. For employers, providing pre-tax commuter benefits can lead to payroll tax savings.
The Perks of Commuter Benefits
Cost savings aren’t the only potential boon of commuter benefits. Depending on their structure, such programs can also:
- Provide flexibility to the employees who may now have more options for how to get to work.
- Encourage employees to carpool or take the train with coworkers. This gives them a chance to bond and enjoy the company on an otherwise long and boring ride to work.
- Further corporate environmental commitments by making incentivizing lower-carbon transit options, such as providing public transportation subsidies.
- Improve employee health by making it easier to opt for an active commute, like purchasing bicycles for staffers.
Implementing Commuter Benefits in Your HR Strategy
Incorporating commuter benefits into your HR strategy requires strategic thinking and careful planning. Here are a few steps you can take to set yourself up for success.
- Evaluate Commuting Needs
Start by assessing the commuting patterns and needs of your employees. Understand what modes of transportation are most commonly used and what challenges employees face.
- Align with Organizational Goals
Ensure that your commuter benefits program aligns with your company's broader goals and culture. For example, you can consider focusing on promoting eco-friendly commuting options as part of your broader CSR strategy.
- Budget Consideration
Determine your budget for the program. In this calculator, remember to factor in how commuter benefits also generate savings through enhanced employee satisfaction and reduced turnover.
- Research Legal and Tax Implications
Consult with a legal or tax expert to ensure compliance with all relevant regulations, and how to maximize the program structure to maximize possible tax implications.
- Plan Logistics
Program logistics include deciding which transportation options and vendors to work with and negotiating their contracts. This might include deciding whether to offer pre-tax benefits, reimbursements, or company-provided transportation services. You’ll also need to set up user-friendly platforms for enrollment, tracking, and reimbursement plans.
- Communicate With Employees
Develop a communication strategy to inform employees about the program. Consider using various communication channels to ensure your message reaches everyone.
- Monitor and Evaluate
Regularly monitor and evaluate the effectiveness of your program. You can use employee feedback and participation rates as key performance indicators. Making necessary adjustments helps the program continue to meet employee needs and organizational goals.
Real-World Commuter Benefits Programs
Across industries, organizations of different sizes are leveraging commuter benefits. The following examples can provide inspiration and practical know-how for organizations considering implementing their own.
- Microsoft's Connector Bus: Microsoft operates a shuttle service known as the Connector Bus, which serves employees in several major residential areas.
- Patagonia's Drive-Less Program: Outdoor clothing company Patagonia offers cash incentives for employees who choose to walk, bike, carpool, or use public transportation for their commute.
- Clif Bar's Cool Commute Program: Clif Bar & Company offers financial incentives to employees who purchase clean, fuel-efficient cars or bikes, encouraging a lower carbon footprint.
- Genentech's gRide Program: Bio-technology firm Genentech operates a comprehensive commuter benefits program that includes carpools, vanpools, shuttles, and subsidies for public transit and bicycling.
Benefits That Woo Your Workforce
Commuter benefits are just one benefit HR departments can use to boost employee morale and satisfaction. One of the most powerful tools available to HR departments is an employee wellbeing program: There’s a reason 100% of HR leaders say wellness programs are important to employee satisfaction.
A wellbeing program can include benefits like gym memberships, app subscriptions, and mental wellness support. It can also involve providing or subsidizing healthy snacks, organizing educational events on wellness topics, and offering flexible work schedules for work-life wellness. By taking a holistic approach to employee wellbeing — from communing to nutrition — employers can create a workplace environment that is conducive to both productivity and personal growth.
Take the first step in boosting employee satisfaction — reach out to a Gympass wellbeing specialist!
- Clif Bar's Cool Commute Program Helps Employees Put the Brakes on Climate Change. Clif Bar. Retrieved July 25, 2023 from https://www.clifbar.com/stories/clif-bars-cool-commute-program-helps-employees-put-the-brakes-on-climate-change.
- Employer's Tax Guide to Fringe Benefits. IRS. Retrieved July 27, 2023 from https://www.irs.gov/pub/irs-pdf/p15b.pdf.
- gRide Team Wins National Award for Best Commuter Program. (2021). WeDriveU. Retrieved July 25, 2023 from https://wedriveu.com/gride-team-wins-national-award-for-best-commuter-program/.
- Microsoft’s upgraded transportation experience arrives in Puget Sound. (July 21, 2023). Microsoft. Retrieved July 25, 2023 from https://www.microsoft.com/insidetrack/blog/microsofts-upgraded-transportation-experience-arrives-in-puget-sound/.
- Nearly One-Quarter Of Workers Have Left A Job Due To A Bad Commute, According To Robert Half Survey. (September 24, 2018). Robert Half. Retrieved July 25, 2023 from https://press.roberthalf.com/2018-09-24-Nearly-One-Quarter-Of-Workers-Have-Left-A-Job-Due-To-A-Bad-Commute-According-To-Robert-Half-Survey.
- Patagonia’s founder just gave the company away — the latest unusual step in a history of corporate innovations, from being an early adopter of paid parental leave to donating $145 million to the environment. (September 22, 2022). Business Insider. Retrieved July 25, 2023 from https://www.businessinsider.nl/patagonias-founder-just-gave-the-company-away-the-latest-unusual-step-in-a-history-of-corporate-innovations-from-being-an-early-adopter-of-paid-parental-leave-to-donating-145-million-to-the/.
The Gympass Editorial Team empowers HR leaders to support worker wellbeing. Our original research, trend analyses, and helpful how-tos provide the tools they need to improve workforce wellness in today's fast-shifting professional landscape.