Providing perquisites is one of the best ways to retain any employee. Most of the employees do not even consider it a part of their income and take it as extra services provided by the company for their comfort, which ultimately increases their satisfaction towards the job.

Although there are many perks you can provide, very few actually impact an employee’s daily lifestyle, transportation allowance is one such perk. But due to the increase in fuel price, the cost of providing this increases day by day, which is not suitable for an organization in the long run. You cannot stop providing it because it reduces employees’ overall stress and frustration level, which ultimately reduces the employee turnover ratio.

Apart from stopping it, we should focus on finding the solution to reduce the overall employee’s transportation costs so that your business can sustain itself in the long run without impacting the existing lifestyle of the employees.

This article will discuss some of the best tips you can implement in your company to reduce the overall transportation cost of employees. So a lot to know, a lot to discuss, and without wasting any time, let us now begin.

Disclaimer- There may be some affiliate links in this article. We earn some commission when you buy any product by clicking on that link. Read our Disclaimer for all details.

Ways to reduce employees transportation cost

If we analyze correctly, the employee transportation costs are nothing but car, driver, and fuel charges. When we reduce either of them, it will directly cut down the overall transportation cost. So some of the ways to reduce driver, car, or fuel charges are as under:

#1 Use electric vehicles

Electricity prices are much lesser than the price of petrol and diesel. Also, it is an eco-friendly source of energy, and the government also provides many subsidies to promote their use. 

 

So you can use electric vehicles or make a contract with taxi companies to use electric vehicles for their employees’ transportation and negotiate for charges accordingly.

#2 Offer cheap accommodation near the workplace

Transportation cost directly depends on the distance; more distance means more cost. So why not deal with a real estate company and provide cheap accommodation to the majority of the employees in the workplace. In this way, employees can enjoy cheap accommodation, and you can save the overall transportation cost, which makes it a win-win situation for both of you.

It also makes the employee more dependent on you, which reduces his chances of leaving the company.

#3 Implement sharing system

It is more likely that two employees in your organization live in the same area. So why not pick up both of them together? It will reduce their overall transportation costs by 50%.

This sounds to be an excellent idea but make sure that both the employees have good relations with each other otherwise they will not enjoy travelling together, it will impact their work, which is not at all good for you.

#4 Identify the shortest route

There are many routes from which an employee can come to the office, and most of the time, the taxi driver chooses the long way to increase its overall charges.

To avoid it, simply identify the shortest route from the employee’s place to the office and pre-calculate the charge. This method is very effective and can reduce employee transportation costs by 15-20%. 

#5 Change work schedule

Instead of doing anything above, you can change employees’ work schedules to reduce the transportation cost by 20-30%. Your company probably works on a 5 working days per week model, where employees work for 48 hours in total.

You can change into 4 working days per week, where employees will work 48 hours in total or 12 hours per day. By implementing this model, workers will come to work 4 days a week instead of 5, which means they will use the company transportation facility 4 times a week instead of 5. It simply reduces the transportation cost by 20%.

Most workers will be happy with this decision because it gives them one extra holiday per week, which means they get more time to spend with family and friends. It will increase their personal satisfaction in the job and help them maintain a work-life balance properly.

#6 Promote work from home

If your employees can work from home, why call them in the office? Analyze your organization and make a list of all the employees that can work remotely and ask them to work at their place. 

Some workers may want to work at the office, so respect their will and allow them to come. But suppose an employee regularly works from home. In that case, it will be very cost-saving for you because here you do not have to bear transportation charges, electricity charges, meal charges( In case you provide), peon charges, or any other charges that you bear if he comes to the office.

If that employee works well, then you must use some part of the saving to provide him extra incentives to keep him motivated and dedicated to his work.

Book to Read

If you are reading this article, it means you are facing a problem in cost-cutting and employee management. Since you are a business owner, it is not suitable for you long term. So, I recommend you to read an employee management and cost book by Harry. W. Kenworthy is an excellent book and is available for free on amazon kindle. 

Check it out

That’s all for this blog. If you have any questions then feel free to ask in the comment section. Till then Good Bye and as always God Bless You All.

Frequently Asked Questions