What's the Real Cost of Commuting, to the Workforce?
A desire to return to the workplace, suggests people want things to go back to some sense of normalcy. The workforce has proven that the office is nice to have from a control perspective, but isn't required when it comes to execution. So the question is, what level of agreement will employers and employees reach after this past year of remote work?
Undoubtedly, there are going to be many different solutions offered post-pandemic. Each company will decide how much their cultural and communication style revolves around a need for physical presence in the office. The efficacy of whatever environment is chosen, relies heavily on leadership and how they apply policy. This choice will have a massive impact on retention as employees decide to stay or go, when the call is made by management to return to an in-person workplace.
For the purposes of our analysis of commuting into a city for work, we'll look at our nation's capital - Washington DC. As one of the premier employment cities in the United States, workforce needs demand that a very large portion of the talent commute into the city from neighboring states Virginia and Maryland.
Our model is reserved for companies that can primarily accomplish their mission using technology for communications, coordination, and execution. Many firms in the government contracting, financial, business services, and IT services industry meet this qualification, as they comprise a large part of the employment base in Washington D.C. How will employers in the city create a new work arrangement that keeps attracting new talent, while at the same time offering them the flexibility needed for improved work-life balance?
Key questions to evaluate work arrangements
Which staff can have more flexibility to work from home, and why?
What level of oversight is required for remote staff vice office staff?
Should pay differentials be designed for workers who have the exact same job and responsibilities, but one works remote and the other must report to the office?
Is your team trained to manage disparate teams via technology?
Concerning an equal application of policy, how will staff who are present be evaluated over virtual staff?
While many are rushing to push people back into the office, employees are hesitant to make the leap because of how their work has evolved over the past year. Let's see if we can get this new approach to add up.
Commuting math (back of the napkin)
Time (1 hour / day)
The average city worker travels 45 minutes to and from work. Assume at least 15 minutes getting ready. That's 1 hour everyday, 5 hours a week, 20+ hours a month. Are you compensated for this time? It's normally considered part of the job, but if that's the case - then how do we calculate this advantage in the remote workplace? 20 extra hours a month is a life changing amount of extra space to tackle personal tasks. If an employee wants to work remote, should there be a change in pay because they get back more time in the day? How would employees who are required to report to work, view this disparity? Early indicators say the tension to all of a sudden bring the workforce back, lack of clarity or communication, or a quick shift back to traditional operations would be highly unfavorable.
"Washington DC drivers spend 102 hours each year in traffic delays, the third-highest amount in the nation."
Food ($24 / day)
Working in a city like Washington DC can cost employees at least an extra $120 bucks a week for coffee, lunch, etc. Even if prep time is done for meals brought into the office, that's still several hours of work. When employees can save $480 a month by not eating downtown, that's a major benefit. Conversely, without the foot traffic of high earning (out of town) employees at offices downtown - the supporting restaurant and entertainment industries sadly takes a massive hit.
"A meal at a full-service restaurant (in Washington DC), not including alcohol or tip, averages $40 for one. Lunches are less expensive, at around $15. A 10% sales tax is added to restaurant meals and takeout, which is higher than the usual sales tax of 6% on most other items."
Transportation ($7.68 / day)
Every major city has a multitude of ways for workers to make their way downtown. Car, metro, scooter, and soon enough autonomous personal drone. If you're driving a car in a 45 minute commute, that equates to roughly $40 dollars a week (even more if traffic is bad, which it usually is), or $200 a month. Imagine what you could do with all that spare change (and less spare tires destroyed by potholes)! Taking the metro won't necessarily save you time or cost either, given their reduced schedule in response to decreased ridership. Concurrently, these industries have been massively impacted by our public health crisis, so a car seems to be a better solution for the next few years from a health and flexibility perspective.
'The transit agency (DC Metro) referred to the changes as a way to “normalize” rail service — its response to a new normal that has prompted a shifting of resources during a pandemic in which many workers no longer commute to offices.'
The environment also wins with less commuting, which is important given how heavy pollution negatively impacts less densely forested areas and concrete laden cities like Washington DC, New York, Los Angeles, Detroit, Newark and many others.
'Washington, DC had already received a grade of F for ozone pollution, “also known as smog,” from the American Lung Association in a 2019 report. Local air pollution increases risk from asthma, chronic obstructive pulmonary disease, lung cancer, and cardiovascular disease.'
Family assistance ($40 / day)
When working parents enter the equation, they have to hire babysitters or put their children into some form of care while they're at work. When parents work from home though, they're able to supervise their children and this cost goes way down. After a year of operating this way, how do you think parents will perceive a request to return to the office full-time? The cost of more time with children can't be evaluated, but time away certainly can. If $800 a month can be saved (on the low end) by not having to report daily to the office, then employees will always choose a company that offers flexibility - over one that doesn't.
Again, yet another tension will rise if employers offer more flexibility to those who have a family - over those who don't. If careful balance and fairness isn't crafted from the leadership, corporate culture will significantly suffer from the imbalance.
Transportation safety is a major concern in densely populated metropolitan cities. Leaders are always seeking new ways to mitigate the negative impacts of commuting, but often times these solutions make roads more treacherous for pedestrians who are walking and cycling to reduce transit costs and pollution. If an effective balance isn't struck between the need to get workers in and out of the city quickly and safely, it ultimately makes that area less desirable as a destination to attract much needed outside talent.
"The District is currently on track to log about 45 traffic fatalities this year, which would be the most in D.C. since 2007 when 54 people died in traffic-related incidents according to Metropolitan Police Department data."
When we look at expenses to insure travel into the office, this cost can skyrocket depending on the type of car you have and where you drive. For drivers in DC, this costs is extremely high due to the amount of accidents that occur due to the commute and traffic. When workers have to travel less into the office, or can work mostly remote - this cost can change dramatically for the better. Another calculation that unless covered by employers or paid through the company, really hits the wallet of the employees that are required to show up in person.
"Washington D.C. also has some of the highest insurance rates in the country. According to one survey of auto insurance rates, D.C. ranks 6th in the country for highest average premiums. The survey found the average driver in D.C. pays $1,773 a year ($147 / month) in car insurance."
Mental health, quality of life, and the quest for purposeful employment
A larger, much more philosophical question is coming into play regarding the nature of work and how employees are seeking an improved balance for their personal lives. Before the pandemic, staff were willing to put up with a horrible commute, long office hours, terrible traffic, toxic management, and so much more. After being forced into remote work for a public health crisis, many began considering their mortality against the backdrop of finding purpose in their professions. In many situations, this cost didn't outweigh the benefit and we're just now starting to see how the workforce is at odds with those in charge. The end result of this shift can't be predicted, but strategies must be crafted now to analyze the changing employment landscape. If firms find themselves too inflexible or are unable to articulate rationale for certain work arrangements, then they risk missing out on the best talent in a highly competitive market.
This isn't to say that firms can't enforce whatever prerogative is best for their mission, it simply means that they'll be limited in their ability to offer the best prices and talent to the customer due to an increased cost of operations in the city or turnover of valuable staff looking for better employers. No matter what angle of analysis, the situation is difficult for everyone and the faster firms establish an attractive remote work policy, the better.
'Workers who want to “make it” have to be flexible and willing to take the punishment.'
There are many studies estimating that cost savings by not going into the office can be anywhere from $36,000 to $50,000 a year. It's a fact that major expenditures are associated with working in expensive employment areas like Washington DC. If employees are able to improve their quality of life and bank accounts by working more from home instead - then many will ultimately choose firms that offer this flexibility. Employees aren't the only one's benefitting from remote work though, tech companies like Google are saving $1 Billion a year by having staff work from home.
Many firms are coming to grips with the future of big city work, the high cost of having an office downtown, and how their ability to hire the best talent is directly impacted by financial and flexibility considerations. Washington DC will always be one of America's most treasured cities, but there are going to have to be modifications to the workplace if it hopes to retain its designation as a top employment destination.
Workers have had time to reflect on what is important. They realize the value of their time, and are going to be more intentional about what employer deserves that precious commodity. The employers that will win, are ones who value it even more so than their employee. How this will fall into practice, is something that we'll all just have to wait and see.
Health Policy Disclaimer: Trident Strategies fully supports all CDC Health regulations and recommendations. Follow your local guidelines without exception. A healthy workforce only happens when the community is united in a detailed plan for success.