The job market today is the tightest it's been in nearly 20 years, warn the analysts at the at the McKinsey Global Institute. This is significantly hitting employers' bottom lines. Not only is it hard to hire employees in a tight job market, but many HR departments are also struggling with employee retention and high turnover rates.
"Businesses large and small will need strategies to confront persistent labor shortages," recommends McKinsey. "Deploying and adopting technologies is one way they can power productivity growth." While some employers are turning to the latest trends and headlines (e.g., automation and artificial intelligence) to improve worker engagement, expand their hiring pools, and prevent burnout and turnover, there's one proven yet often-overlooked tactic: making it easier for loyal employees to get to and from work.
The Real Costs of Employee Turnover
In the last month of summer 2024, more than five million Americans quit or were otherwise separated from their employer. This, according to a recent study by Gallup, is the highest employee turnover risk since 2015. "Employees’ long-term commitment to their organizations is currently the lowest it has been in nine years," warns the organization, pointing out that more than four out of 10 employee turnover cases are "preventable but often ignored."
If you're a business leader or HR professional, ignore these startling statistics at your own risk — there are numerous hard and soft costs incurred by unaddressed worker retention and worker engagement concerns.
The Hard Costs of Employee Turnover and Poor Worker Retention
U.S. businesses spend nearly $1 trillion a year on costs associated with employee turnover, warns Midlands Technical College, such as the costs of recruitment, training, and conducting background checks where applicable.
This cost can vary based on the role you're trying to backfill, with Gallup estimating that:
- Replacing someone in a management role can cost approximately 200% of their annual salary
- Filling a professional or technical role can cost 80% of the previous employee's wages
- Replacing a frontline employee can cost upwards of 40% of their salary
The Soft Costs of Employee Turnover and Poor Worker Retention
Poor employee retention and high turnover also have soft costs (i.e., the intangible, often immeasurable impacts on a company that doesn’t show up directly on financial statements but significantly impact your business's success).
In a first-of-its-kind study, the University of British Columbia found that employee turnover causes a "ripple effect" across a business, such as increased feelings of job insecurity that trigger even more employees to leave. Similar soft costs include:
- Losing institutional knowledge, which can disrupt your teams' efficiency and increase the learning curve for new hires
- Poor employee morale and engagement (employee engagement and morale are at historic highs, costing the global GDP trillions of dollars)
- Disrupting team culture, collaboration, and cohesion
- Negatively affecting customer relationships, especially if turnover takes place in client-facing departments or roles
- Reduced innovation and agility
The good news: As Gallup's researchers found, most employee turnover situations are preventable. To this end, commuter benefits and transport solutions deserve a second look from retention-savvy HR professionals and business leaders.
How Commuter Benefits Can Increase Retention
Multiple studies have found a clear correlation between commuting and employee turnover.
"Research suggests that longer commute times may increase employee turnover probabilities by increasing stress and reducing job attachment and embeddedness," concludes an October 2024 study. In that study, every 5-minute increase in one-way commute times increased the probability of the worker leaving for another job by a whopping 1 percentage point.
That's why an increasing number of organizations are offering commuter benefits and transportation benefits — like public transportation subsidies and employee shuttle services — to reduce workers' transportation costs and commuting times, improve employee morale and job loyalty, and tackle the costly problem of turnover.
Level Up With a Corporate Shuttle Program
After analyzing 75 major business markets, Mercer found that while more employers are offering transportation subsidies to contribute to the cost of an employee using public transportation to commute to work, less than a third of businesses cover the entire cost of the commute.
Additionally, an employee shuttle service provides distinct advantages over travel stipends when addressing the most common commuter pain points, like traffic and unreliable public transportation. For example, one Louisville-based business struggled with an annual 100% employee turnover rate, costing them up to $145,000 per position. After rolling out commuter benefits with SHARE Mobility, they saw a 62% increase in employee retention in just five months.
Reliable Transport Reduces Stress
Unlike a stipend — which does not remove the stress of a long, congested drive or hectic public transportation transfers (e.g., subway to bus) — a company shuttle like SHARE Mobility's turnkey shuttle service enables your employees to relax, read, catch up on emails, or even sleep, improving their well-being before and after work.
And compared to driving themselves, a shuttle service:
- Gives your employees the convenience of a shared, professionally driven vehicle (SHARE Mobility's employee service uses a nationwide network of fleet operators and professional W-2 drivers)
- Allows them to avoid the mental and physical fatigue of commuting
- Consolidates the number of individual vehicles on the road, reducing traffic congestion and lowering your company’s carbon footprint
This also overcomes some of the most critical barriers to transportation. For example, many Americans don't have access to a car, only half of Americans have readily available public transportation, and millions more live in transit deserts.
Shuttles Make Commuting Affordable
Mercer's business analysts found that some businesses offer other reimbursements to make commuting affordable, such as subsidized parking. But most of these companies don't fully cover parking costs and make workers deal with onerous processes, such as keeping receipts and filling out reimbursement forms.
Such stipends also don't keep up with the times. In contrast, employee shuttles provide cost savings without the guesswork, so your workers don't have to think about the rising costs of parking, gas, or personal vehicle maintenance. SHARE Mobility's shuttle service eliminates these expenses for your teams. Our all-in-one commuting solution also makes it easy for HR managers to oversee the process, thanks to real-time scheduling, dynamic routing abilities, and other features to get your team to and from work. These also remove the need for your HR department to track and process reimbursements, stipend accounts, and other administrative tasks.
Shuttle Programs Improve Punctuality
Nearly a fourth of workers are regularly late to work, and that costs employers an estimated $3 billion annually in lost productivity (approximately $600 per worker per year). Delays in public transportation, snarled traffic, and other commuter problems remain a leading cause of worker tardiness.
SHARE Mobility's shuttle service solves this with:
- Convenient pickup points and door-to-door service close to your employees' homes or near key transit hubs, cutting down on “last-mile” commuting challenges
- Reliable scheduling with shuttles that operate on a consistent timetable (with real-time tracking) — no more unreliable public transportation schedules
- Detailed reporting on driver performance, on-time rate, and issue frequency for easy problem-solving
- Constant performance optimization, including real-time monitoring of utilization rates, on-time performance and rider satisfaction
Improve Employee Retention and Reduce Hiring Costs by Offering Employee Shuttle Benefits
Future-proof your hiring pool, boost employee morale, and significantly improve your HR costs by rethinking how your workers get to and from work. Contact our sales team today to explore SHARE Mobility's innovative ridesharing solutions and employee commuter solutions for businesses today.
