As Gas Prices Rise, So Do Demands On Employers

Tweet

Arthur Pascuzzi, the CEO of Milwaukee Crane, based in Tigard, Oregon, is caught in this bind. "Every one of my suppliers is putting a surcharge on deliveries of product to us," he says. A recent quote for an electrical component used in his cranes, for example, jumped from $4.40 a foot on a Friday to $5.80 a foot the following Monday, thanks to a fuel surcharge. Rather than passing along costs to customers, Pascuzzi has turned down employees' requests for raises and told his salespeople to set up phone calls instead of driving to visit clients. Even so, he thinks he'll resort to a price hike soon. "I can't see any way that we can avoid it," he says.

Meanwhile, about 28 percent of employers are helping employees with gas prices, according to a recent study by the Society for Human Resource Management. Many of them are taking modest steps like increasing their mileage reimbursement rates to the maximums established by the Internal Revenue Service, but others are proving both generous and inventive, handing out gift certificates for gas stations, offering cash toward the purchase of bicycles, and awarding bonuses to employees who walk to work.

Allowing more employees to telecommute is another common response: 9.1 million people worked from home at least three days per month last year, according to research firm IDC. Their ranks will swell to at least 10.2 million by 2009, says Merle Sandler, a senior analyst at IDC, owing in part to fuel prices.

Coping Mechanisms

What else can companies do? Large corporations can work with energy consultants, who hedge energy, negotiate rates, and coordinate state rebates and credits. But these agents typically serve only companies that spend a million dollars or more a year on natural gas and electricity, says Frederick Pickel, president of Wilshire Energy Consulting Group in Los Angeles.

For smaller companies, he suggests directing expansion plans to states with cheap electricity, such as Kentucky, Missouri, and West Virginia. A short-term solution this isn't, but then again, energy costs are a long-term problem. In the meantime, Pickel encourages companies to take care of the basics, such as improving insulation, installing energy-efficient lights, and regularly cleaning or replacing old equipment.

At Lathem Time, the vanpools have been a hit. Perry, Lathem's HR director, plotted where employees lived on a map and created two routes. She appointed a driver for each route--the worker who lived farthest away and had access to parking--and rewarded them with weekend custody of the vans. Each vehicle stops at two or three park-and-ride lots. A nonprofit called the Clean Air Campaign pays a stipend of $425 per van per month, the rental-car company covers maintenance costs, and each rider chips in $14 a month, which the company deducts from their paychecks.

Nila Rose, the inventory-control manager, is putting the $180 a month or so she saves by vanpooling toward retirement. Many of the other workers in the vanpool use the savings "just to pay the bills each week," she says. Sharing a ride, she adds, has been surprisingly fun--one co-worker brings McDonald's biscuits on some mornings.

The telecommuting policy has gone smoothly too. Fourteen of Lathem's 50 office employees work from home at least once a week. Calls are forwarded to their home phones.

It's the Fridays-off policy that worries Lathem. Plant workers come in early four days a week to complete a week's production. By adding the extra time in the morning, Lathem figures, workers are less likely to get tired and make mistakes or suffer injury. He also extended break times to 15 minutes from 10.

Still, when a stamping machine operator caught his finger in a press recently, Lathem suspected that the new 10-hour schedule was to blame. The worker is back on the job after three months on short-term disability, but the episode was unsettling. "If gas prices went back down, we would be very encouraged to go back to the five-day week," Lathem says. "It's gas prices that're holding me to it right now." They may be holding him there for a while.

Stephanie Clifford can be reached at sclifford@inc.com.

 PREV  1 | 2 

Read more:

Sign-up for our Leadership and Managing Newsletter

Email Address: