Debi O’Donovan: How increased fuel prices in are affecting employee total rewards in the USA

Debi O’Donovan, editorial director, Employee Benefits, blog on Total Rewards Conference & Exhibition 2008, Philadelphia, USA: Heading across the pond to see how reward (or ‘rewards’ as the Americans are wont to say) is evolving has been an interesting process. My first ‘take away’ (to get into US conference-speak) after day one of the annual WorkatWork Total Rewards Conference & Exhibition is the broad similarity between US and UK reward development. That is, in some cases the UK is ahead of the game while in other the US is, but there is not much separating the two.
However, it is the differences that are more intriguing. As expected the US economy and fuel price increases are a talking point during conference breaks, particularly the latter.
US compensation and benefits managers are concerned that there is an expectation among employees that pay should be increased to cope with increased fuel costs. This is not being dismissed out of hand with some employers already making the move to increase pay to help staff deal with fuel cost increases.
Unlike the UK, this is a country where the vast majority of people have to commute by car, often up to an hour each way (or longer in some cases). Public transport is very limited so there is usually no other way to get to work. So with gas (petrol) now costing over $4 a gallon in many places (about 50 pence a litre) many employees are being hard hit in the pocket just getting to and from work.
One HR manager of a large US bank that I spoke to explained that she was typical of many people who may be forced to either move closer to work or leave her current employers because of the impact of the increased fuel costs. She felt it was the latter option that should be most concerning to US employers – where ongoing high fuel costs could increase staff turnover rates.
However, not all US employers are looking to cash to mitigate the impact of increased fuel prices. Some are looking at introducing flexible working and homeworking options. However, according to a study released by Hewitt in April 2008, few (27%) US companies have formal written flexible working programmes.
This brought home to me how much UK employers have changed their own flexible working policies in recent years due to government legislation. In the UK most employers will have some sort of flexibility in place because most parents and carers have the legal right to request flexible working and current statistics show that on average 90% of requests are granted.
So looking at the UK from here in the States, it seems that all that nanny-state red tape we get in the UK is making a lot of business sense in a rapidly changing employment world (which was my second ‘take away’ for today).