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How companies help staff with soaring travel costs

Earlier this month, employees at Grossbard & Associates in Houston found an extra $50 in their paycheques. The small accounting firm added the money — and plans to continue doing so on an interim basis — to help its 28 workers cope with rising gasoline prices.

"This is our way to recognise they're facing a much higher cost than any of us anticipated," says Paul Grossbard, a shareholder at the firm, adding that all of its employees commute to work by car.

Grossbard is among a growing number of employers that are going out of their way to help workers grapple with the increasing cost of getting to and from the office. Companies are launching a variety of relief initiatives such as providing alternate ways to get to work — including purchasing buses and vans to give employees free rides — and changing corporate policies to accommodate workers who travel for their jobs.

Some companies are increasing mileage rates, providing gas-related cost-of-living raises or even supplementing employees' paycheques to relieve the burden. Others are reconfiguring sales professionals' territories so they are more compact — leaving fewer miles to drive. And a growing number of workers are taking advantage of existing benefits from their employers.

The changes are a welcome respite at a time when the average price of gasoline is hovering around $3.79 a gallon, up significantly over $2.87 a gallon in 2006, and $2.01 in 2004, according to the Energy Information Administration. Today, the average person spends five percent of his or her annual income on gasoline, up from 2.5 percent in 2002.

Companies say while they can't control prices at the pump, they can help manage the amount workers pay to fill their tanks. That's what officials at EFC International are doing. Earlier this month, the St. Louis manufacturer began subsidising part of employees' fuel costs for the number of miles they travel to and from work.

The company is reimbursing gas costs over $2.50 per gallon based on a rate of 20 miles per gallon, an amount the company's chief executive Doug Adams considers a more reasonable cost for gas. That means an employee who commutes to work 200 miles a week by car (or 40 miles a day round trip), paying around $3.70 (the current local average) per gallon in gas, would be reimbursed just under $50 a month.

"I just got mad about these gas prices and wanted to do what I could to keep employees," says Mr. Adams. He feared that some workers felt they couldn't afford to keep their jobs due to the high cost of commuting and might seek employment closer to their homes, he explains. The firm, which has offices in Atlanta and Chicago, and will soon open an office in Toronto, is also subsidising the cost of public transportation for employees who commute by bus.

A recent survey of 553 human-resources professionals shows that companies have more than doubled some of their gas-cost-related efforts over the past year, with 14 percent doling out gas-card rewards, up from six percent in 2007, reports the Society of Human Resource Management. The same percentage also offers public-transportation discounts, up from six percent last year. Another two percent say they're now offering cost-of-living raises to help with pain at the pump.

In September 2007, Microsoft Corp. added a bus system called the Connector with five routes that service about 3,700 employees and run as far as 21 miles from the company's headquarters. The company has since added 11 new routes to accommodate another 2,300 workers.

Microsoft also leased two large office complexes last year in Bellevue, Washington, and another earlier this month, in part to ease workers' commuting costs. When the company's expansion is complete, around 7,000 employees are expected to be based in the Seattle suburb, which is located closer to many of the cities in which many workers live, says a company spokesman.

Employers have long helped cut the cost of getting to and from work by allowing workers to use pretax money to pay for parking and public-transportation fees, but organisations that facilitate this benefit for companies say they're seeing a significant increase in demand for their services. New York-based TransitCenter Inc. says it's providing pre-tax commuter benefit services to 23 percent more employers than it did in May 2007.

Expressing this kind of concern for workers' financial well-being may be critical, says Wayne Hochwarter, a management professor at the College of Business at Florida State University who studies workplace dynamics. Employees experiencing financial problems tend to be less productive due to increased stress levels, says Prof. Hochwarter.