Thinking About Subsidizing Gas Prices for Employees? Consider the Cautionary Tale of Facebook...
June 04, 2008
Gas prices keep going up. Does anyone really believe they are coming back down? Surely you jest...
Which means the pressure is on many managers and HR Pros to become advocates to assist employees
with the cost of their commutes. I wrote about this a few weeks ago and threw out some thoughts on the best ways - and the worst ways - you can help.
My vote for the worst way to help? Provide a guarantee on the price of gas, creating a program that states the company will reimburse employees for gas prices that exceed a specific per gallon cost for travel on their normal commute.
Why are subsidies a bad idea? Because if gas prices aren't coming back down, at some point you'll eliminate the subsidy, which by that time will have become an entitlement. Think it won't happen to you? It happened to Facebook recently, focused on housing subsidies in the pricey real estate market of Palo Alto, CA:
"Mark Zuckerberg (Facebook CEO) must be glad he's at the D6 conference in Carlsbad. Another reason the sensitive CEO skipped town? He may not have wanted to see the disappointment when his employees learned that the company would revoke a cherished $600 housing subsidy for those living near Facebook's downtown Palo Alto headquarters. Since reporting the news yesterday, more tipsters tell us the subsidy slash is real. According to one, new employees will get no housing subsidy and as soon as current employees sign new leases with their landlords or decide to move, they lose theirs too."
A subsidy is a subsidy. The danger in creating one in the workplace is the folly that it will be short-term, which it never is. At some point, the company or unit in question has a rough quarter/year, and you have to take the entitlement away. Then your good-willed gesture becomes an employee relations mushroom cloud. Which is what will ultimately happen to any company that initiates a gas price subsidy for commuters.
If Facebook pulled back a subsidy, what hope do you have? They have a CHEF, for crying out loud...
Think car pooling and telecommuting....
Congratulations! This post was selected as one of the five best business blog posts of the week in my Three Star Leadership Midweek Review of the Business Blogs.
http://blog.threestarleadership.com/2008/06/04/6408-a-midweek-look-at-the-business-blogs.aspx
Wally Bock
Posted by: Wally Bock | June 04, 2008 at 04:06 PM
Which begs the question, are any of the the outrageous perks that the cool kids in the tech sector get sustainable? Sure we know your employees are your competitive advantage, but after a few bad quarters the chefs, pet projects and stock options are tough to justify to your investors.
Maybe a company like Google will never have a few bad quarters in a row, but that's just crazy talk.
.... Maybe I'm just jealous.
Posted by: John Lee H | June 04, 2008 at 06:23 PM
Subsidies - definitely a bad idea. We're a small firm and have increase telecommuting days to two per week for employees. That's the way to go for services firms that have limited face-to-face time with clients.
Posted by: Kevin Grossman | June 05, 2008 at 06:46 PM