Iran War is Lifting Gas Prices. Should Employers Help?

Employees are already stressed over their financial situations, but gas prices are only adding fuel to those concerns. 

The Iran war is lifting gas prices, with AAA reporting that the national average price per regular gallon of gas is $4.06 as of April 1, a jump of more than a dollar per gallon in one month. 

Those high prices are broadly a concern for all employees — especially considering financial confidence among employees is at its lowest level since 2012, according to recent data from MetLife — but particularly for workers who regularly make the trek to and from the office. 

“For employees commuting to the office, rising gas prices are a major concern right now,” said Frank Weishaupt, CEO of Owl Labs, a technology firm in Boston. He noted Owl Lab data recently found that employees spent on average $55 a day going to the office, including $15 on commuting. “Employees required to come into the office at this time may start feeling frustration as a result of these accumulating costs, and with the majority of employees now expected in the office three or four days a week, that’s a significant portion of the workforce feeling this pressure.” 

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That raises a couple of big questions for employers: Should they care? And what can they do to help? 

As gas prices take a bigger bite out of employee pay, concerns about fuel prices play out for employers, too, as financial stress takes a hit on productivity, engagement, and morale. For instance, roughly 1 in 4 of workers report that transportation and commuting challenges are a major issue hindering their productivity, according to data from Zety. 

“Employers should care because this doesn’t always show up as immediate resignations. It usually first shows up as disengagement, lower morale, and people quietly starting to look for work elsewhere,” said Volen Vulkov, co-founder of Enhancv, a resume-building platform headquartered in Sofia, Bulgaria.  

“In some cases, mandatory traveling to the office every day starts to feel less like a team decision and more like a financial burden employees didn’t sign up for,” he said. “And that shift in perception can have a lasting impact on retention and trust, especially since the situation doesn’t seem to be improving any time soon.” 

Allowing Remote Work 

In light of high gas prices, experts recommend that employers take steps to lessen the financial toll of commuting. That can include offering more flexibility as far as their time in the office “before the financial impact of commuting takes a greater toll,” Vulkov said. 

Allowing telecommuting more frequently — even for a short period of time — can be a big boon to employees feeling stretched thin by commuting costs, experts said. “Offering remote work options is one of the easiest ways for employers to support employees right now,” Weishaupt said. 

“Even allowing employees a couple more days a week working from home can make a big difference for employees in relation to their cost savings,” Vulkov said. If time in the office is not negotiable, employers wanting to help may consider more flexible start times so employees can save fuel during rush hours, he said. 

Commuter Benefits 

Now is also a good time for employers to tout any commuting, transportation, or parking benefits they already offer — or consider them if they don’t have any in place. 

Such benefits commonly include pre-tax payroll deductions for transit passes, parking, vanpooling, and subsidies for bike repairs, enabling employees to save on gas, tolls, and vehicle maintenance. 

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It’s important to note that workers are open to going into the office with the right incentives, Weishaupt noted. Owl Labs data found that 92% said they could be convinced if offered the right perks — 41% said greater compensation, 33% said their company paying for commuting or parking, and 27% said a shorter commute. 

Fuel stipends are another option to consider, Vulkov said, especially in regions where public transit is limited. Transport-related benefits, Vulkov said, “do a lot for employees because it shows them the company understands what they’re going through.” 

Return-to-Office Questions 

Gas prices are also prompting conversations about return-to-office mandates, which already have spurred much debate among workplace experts.  

“Rising gas prices put a clear number on something that used to be easier to ignore before the war happened,” Vulkov said. “When the commuting costs suddenly jumped, employees started questioning not just the inconvenience, but the actual value of being in the office.” 

Policies about time in the office that may have felt reasonable before can feel out of touch right now if they don’t account for these additional costs, he added. “Rising gas prices don’t just add pressure, they make the tradeoffs much more visible, and that tends to spark more open and sometimes more critical discussions around return-to-office expectations,” he said.  

Weishaupt agreed. “Rising gas prices may prompt employees to advocate more vocally for remote options and employers to reconsider in-office policies in order to retain top talent,” he said.  

Help at All Levels 

For all the problems that major events such as the Iran war, and soaring gas prices, cause for employees, from both a mental-health and financial perspective, such events also provide employers with a valuable opportunity to connect with their workers. 

“At the end of the day, it’s not so much about providing the right solution as it is providing a sense that the company understands the situation and is making an effort to meet employees halfway,” Vulkov said. “When employees feel this, they’re more likely to stay engaged and want to stay with the company.”