Reno gasoline prices have reached a record high and are among the highest in the nation.
To some people, this is an inconvenience, a discomfort on the monthly credit card bill. To others, it might mean their job is in jeopardy because they can no longer purchase the fuel necessary for the daily job commute. For them, a breaking point has been reached.
So gasoline is up 30 or 50 cents per gallon. Does that really matter? Is $5 to $10 per week truly going to prevent someone from going to work? Or is it just another convenient excuse that alleged poor performing workers in our society are using to frustrate employers?
The answers to these questions are as complicated as today's workforce. Workers at higher ends of pay scales have less disposable income remaining when filling up with higher priced gasoline. Because of this irritant, they may have to reduce comfort purchases until gas costs fall.
Workers at the lower ends of pay scales often live at some distance from work centers, away from public transportation, with dependence on older, less fuel efficient cars. Their disposable income often transitions into necessity as prices for gasoline rise. They may have no comfort purchases to postpone.
If an individual lives 20 miles from the workplace, and the vehicle driven averages 20 miles per gallon, then at $3.50 per gallon, the daily cost of driving to work is $7. If the mileage per gallon slips to 15, then the cost rises to $9.35 per day. If the specter of $4.00 per gallon gasoline arrives, these numbers become $8 and $10.65 respectively.
As covered in my last Northern Nevada Business Weekly article, many individuals in our area earn $9 per hour ($18,720 per year), an effective minimum wage in this region. For these people, the cost of gasoline at $9.35 per day plus their individual portion of Social Security totals 20.6 percent of their daily regular wages. If gasoline hits $4 per gallon, this percentage rises to 22.4 percentage. How many individuals in this salary range can give up that percentage of their gross, pre-income tax income, and not be adversely affected?
Thus, higher-priced gasoline does put many individuals' jobs in jeopardy. When gasoline peaked in the $3.20 per gallon range last summer, many employers complained about no-show employees. Employees would stop arriving for work and the employer suffered. How will it be any different this summer if our gasoline actually reaches the $4 level? Will employers face a massive cost increase in hourly wages? Will employers on bus routes benefit from their location to the detriment of employers not as fortunate? Will unemployment increase?
What is the fracture point in gasoline cost that will cause possible long lasting employment issues in this region? Will the effect of the highest regional gasoline cost in the nation stymie our current new initiatives to attract additional workers to our area?
Fortunately, there are positive answers to these vexing questions and many progressive employers are already implementing them daily. They are carefully looking at their operations and changing long set procedures as needed and wherever possible. For example:
* Employees telecommute some days rather than work out of the office. As convenient as face-to-face contact is, in this high tech age, these are acceptable cost effective alternatives;
* Traditional five-day work weeks are changing to four day weeks with flexible start and finish hours;
* Human resource departments are posting bus route maps in employee break areas and adjusting hours to accommodate employees dependent on using public transportation;
* Work schedules are being adjusted to encourage cross department carpooling.
Additionally, companies can offer various incentives to their employees that will help ease the gas cost crunch. These incentives include:
* Investigating the possibility of van pooling and implementing it as possible.
* Encourage car pooling between individuals at different companies in the same area.
* Buy discount bus passes at company expense for employees who switch to using public transportation.
* Permit employees to work one day or more per week from home.
* Switch to non-traditional work days and/or hours so employees are commuting to work in less traffic dense times.
* Award prepaid gas cards to individuals who devise effective ways to reduce company and individual use of gasoline and diesel fuel.
Not all employers can adjust to these options. Production schedules, customer needs and government regulations among other items, might prohibit innovative thinking. As employers pay the same higher and higher fuel costs, they can ask where their money will come from to keep their vehicles running.
Nonetheless, all is not hopeless. Employers and individuals can be wiser consumers and shop around. Boycott gas stations with the highest prices. Share information on which stations have the lowest prices and support their efforts to keep prices low.
Change driving habits. Do personnel errands during the drive time to and from work rather than creating separate trips after the work commute.
See this challenge as an opportunity to review business as normal and as a good time to try something new. Break old habits and routines.
Finally, consider raising employee pay. We live in a high-cost area. To keep the best employees, in addition to the changes suggested above, give strong consideration to significant pay increases to your best performers. In the long run, that will be far cheaper than the cost of training a replacement for the employee who could no longer afford to drive to work and ultimately fails to show up for work. High cost gasoline is here. Don't let it defeat you or your staff.
Tom Fitzgerald is chief executive officer of Nevadaworks.
