6 ways to help manage employee transportation benefits

Headlines like "Car repossessions surge 23% as Americans fall behind on payments" highlight the rising financial strain on American households, especially among low-income families that spend 30% of after-tax income on transportation. Despite their essential role in bringing their employer's desired customer experience to life, only 13% of frontline employees are financially healthy. The rest live paycheck to paycheck and struggle with basic needs, including transportation. 

Without strategic employer support and a nudge from brokers or advisers, frontline workers' transportation challenges can lead to absenteeism, lower productivity and turnover. Here are a few ways HR and benefit professionals can help employees manage transportation expenses — and why doing so is a mutually beneficial investment. 

1. Address unique financial challenges of the frontline workforce 
Financial shocks impact 60% of people in a given year. When frontline employees experience a money emergency, 45% say it's due to transportation-related costs. Because financially sick employees lack savings and have poor credit, they have limited borrowing options. Without a place to turn, one financial shock could mean a loss of transportation, whether due to a critical repair the employee can't afford, missed payments that lead to auto repossession, or even the inability to pay for gas to get to and from work. Employees may have no choice but to find a job that's closer to home, accessible by public transportation or one that offers transportation support. 

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2. Connect employees with personalized, human-led support
Employees need non-judgmental, personalized support for their transportation needs and other financial struggles. That requires connecting them with an empathetic person they can trust with details of their unique situation. For example, an employee who is exposed to domestic violence with a partner who poured sugar in the gas tank has very different needs than an employee who had a car crash and isn't sure how to navigate the insurance claim process to begin repairs. Without human-led support and real solutions in moments that matter, transportation issues could linger, causing frequent absences, staffing shortages and turnover. 

3. Make it easy for employees to access all available resources
Low-income workers may qualify for free government programs that include transportation assistance, but more than 40% of people have trouble proving eligibility or getting benefits. In addition, many local nonprofit organizations help lower-income families acquire safe, used, affordable vehicles — but employees may not know they're an option. Financial health benefits that help them identify, navigate, and enroll in government programs and community resources can help address transportation needs and provide financial support for other challenges.

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4. Give employees vetted, safe financial options 
Lacking other options, financially vulnerable employees often turn to payday loans, auto title loans or other predatory products that make their already precarious financial situation worse. Employers can support them with financial health benefits that include safe, vetted paycheck-linked solutions. These options provide access to affordable loans and sources of emergency cash for transportation needs, but they also protect employee financial health. The key to doing that is tailoring how much they can borrow, and how much they must pay on the loan each month in an amount that's appropriate to their financial situation. Providing employees access to paycheck-linked high-yield savings accounts also can help them save automatically from each paycheck — even in small amounts — for future transportation expenses. 

5. Help employees make transportation more affordable
More than 70% of employees between the age of 25 and 44 believe their employer should help with commuting expenses. Employers can improve recruitment and retention by offering commuter benefits on a pretax or taxable basis. For example, Amazon supports its warehouse employees with access to public bus services as well as private coach buses, shuttle vehicles and sprinter vans at some locations. Employers also may consider paying for or reimbursing employees for expenses related to carpooling, transit passes and parking (which may be tax-free up to monthly IRS limits). Taxable benefits such as carpooling perks, ride-share service allowances, toll or gas card reimbursements, or a vehicle maintenance allowance make commutes more affordable.

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6. Get creative about the types of support offered
Flexible schedules can be an impactful way to support frontline employees' transportation-related needs. For example, employers can ask for transit schedules that work for their employees who rely on public transportation (which also helps increase ridership for the transit system). Employees who carpool to get to and from work also may benefit from more flexible shift start and end times that align with shared ride availability. Additionally, increased flexibility can provide employees with a buffer for dealing with unexpected transportation issues. This allows them to make up time without facing penalties or lost wages while positioning employers to benefit from their productivity.

Reliable transportation is essential for frontline employees, but financial illness has made it harder for them to get to and from work. When employers help employees overcome financial barriers, including transportation, they are helping them show up to work as their best selves while simultaneously managing real business costs.