The cost of living has been rising steadily in the UK since 2022 and this has had a direct impact on employees, especially when it comes to transport. Capterra investigates how these costs affect workers when simply turning up for work and what companies can do to help the situation.

Transport costs affect on return to the office

Attending work incurs costs for employees in all circumstances; whether it’s petrol and parking for in-office staff or utilities and internet costs for remote workers. However, initiatives like return to the office mandates or full-time remote work can unintentionally exacerbate rising expenses for staff.

Some employees with the choice may weigh up the cost of working from home vs the office and make their decision based on the financial impact. However, employee benefits can help companies to support employees in the face of the rising costs that affect them.

We investigate these factors in Capterra’s 2024 Cost of Work Survey. We surveyed 2,716 employees from 11 countries, including 248 employees in the UK, on their experiences with the expenses incurred from attending work. For this article, we considered how transportation costs affect UK employees and discuss what employers can do to work around these concerns. In our second report, we will consider the overall global picture of the cost of work today.

When assessing remote working vs office working, more UK employees surveyed work hybrid (47%) than fully onsite (43%). Only 9% work fully remote, making this an outlier in our findings. How does this impact the costs Britons face to work?

Our full methodology for this survey can be found at the end of the article.

UK employees are feeling the effects of increased work costs

Most UK employees surveyed have seen their costs rise over the last year across a range of necessities. The most profound cost increases are from basic expenses like food shopping and household bills, although eating out and car-related costs like petrol and insurance have also shot up significantly. 

Some of these costs, such as groceries, will affect employees regardless of whether they work from home or not. However, transportation related costs like petrol and car insurance may disproportionately affect staff facing a commute, especially if it is by car.

Graph showing the increasing costs of work for employees

Regardless of whether they are working remotely, hybrid, or fully onsite, the UK sample has experienced an increase in the costs related to working, with 69% saying their costs to work have become higher over the last 12 months. Salaries also don’t seem to be keeping up, with 68% saying their pay hasn’t kept pace with the rate of increasing costs.

Whilst the cost of work is higher now than ever for UK employees, some expenditures may represent particular barriers to in-office attendance. The most important is transport, which could represent a cost imposed on employees who have to commute. This may engender resistance against in-office initiatives.

Making financial wellbeing a priority for staff

Financial wellbeing support is becoming an increasingly important perk for staff as the cost of living crisis drags. It can help to offer financial wellbeing programs to employees to enable them to access support and manage their money more effectively.

Some of the benefits of financial wellness programs to employees may include:

  • Advice on financial planning and household budgeting
  • Access to expert advisers and budgeting tools
  • Financial goal-setting guidance

Higher spending on commuting could push employees to look for a new job 

Employees may see the benefits of working in office vs remote if they can avoid some of the steepest cost rises, like utility costs. Despite this, the additional costs of commuting to work may not offset the savings made by being at home less, undoing any potential advantage. 

This matters especially as higher costs for commuting can also potentially have an adverse impact on employee retention and productivity for businesses. We observed that 66% of UK employees in our survey would consider looking for a new job if they were required to spend an unreasonable amount of their own income on commuting to work if required to commute to work by their employer. Also, nearly half (48%) would ask for a pay rise and 21% would reduce their productivity in these circumstances.

Keep an eye on employee sentiment when making policy changes

It is important for companies to monitor employee satisfaction levels to understand any difficulties they are facing, especially if this may impact their motivation to stay at the company. 

Keeping an eye on employee satisfaction can help managers spot problematic trends appearing before they become an issue for employee retention. For example, this can help managers proactively identify whether increased costs of work resulting from company policy are affecting staff. 

Human resources software can help in this mission by providing tools to analyse employee data, receive feedback, keep detailed records on staff, and provide possible insights on how staff use the office. It can be especially important to create a culture of open communication when considering elements regarding payroll. Survey tools can also help gather feedback from employees to understand the pressures affecting them.

Petrol is the top cost for commuters

As already examined in the data, transport costs —such as petrol and car insurance— have increased for many employees over the past year. 

In our sample, we noticed that most commuting employees need to travel short-to-medium distances to reach their workplace: 74% of onsite and hybrid workers say they must travel 15.5 miles or less to get to work. A major proportion of this group are people who travel more than 3 miles. This would normally necessitate public transport or a car in order to arrive.

Graph of the distances travelled to onsite workplaces

Most hybrid and remote employees highlighted transport costs as the highest overall expenditure they have when attending the workplace. In total, over half 53% of the sample identified petrol as their highest expense in this regard.

Graph of the highest employee costs when attending the office

This is also not likely to change. We asked employees if they would be willing to move closer to their workplace to cut down the journey time and probable costs. Our findings show that 92% of workers who work hybrid or onsite at a single workplace have not considered moving to be closer to their company. So although commuting costs are high, employees aren’t yet considering moving to cut these costs or reduce time commuting.

Commuting consternation

The commute to work has been a big topic in return to office discussions for some time. We observed that having no commute was the biggest perk for staff working remotely due to the COVID-19 pandemic in Capterra’s 2021 Remote Work Survey

A lot has changed between 2021 and 2024, as return to office mandates or hybrid working has replaced a lot of remote work since then. However, greater flexibility exists in many workplaces than prior to the pandemic and it is likely many participants in this survey no longer expect to make their commute daily as they may have done before. 

Not requiring staff to make a daily commute may help some employees save on some of the costs of going to work.

Employees think employers should help out with some key commuting costs

It is clear from the data that commuting costs are a potential barrier to office attendance. However, on occasions where office attendance could prove useful, like brainstorming or strategic meetings, commuting may become necessary. What then can companies do to soften the impact of commuting costs in 2024? 

One possibility is to subsidise or cover the costs of some of the travel expenses employees are facing. We observed that most employees accept ownership of some costs associated with getting to and from work such as public transportation and petrol. However, there are a considerable number of our respondents who want employers to cover transportation costs, even if they simply share the cost burden.

Graph of employee preferences for the cost burden of transportation to the office

Whilst most employees accept paying their own way to actually get to work, they are also clear that parking costs are a company responsibility. 

Crucially, 69% say they would enjoy working onsite more if there were parking or transport reimbursements from employers. This adds further evidence to the idea that the cost of commuting is a major consideration when attending an office for employees in the UK.

Easing costs of travel

In a recent report by Gartner on company return to office (RTO) policies it is recommended to offer ways to reduce costs of work for staff with the introduction of useful benefits (full report available to Gartner clients). Therefore, offering benefits that can reduce the pressure of transport costs for employees can improve satisfaction among those who are required to be in the office.   

A possible solution is to consider a transport ticket loan system, whereby employers can mitigate the upfront costs for employees who purchase season tickets for trains, underground and buses. Alternatively, offering discount schemes on transport and other costs can help staff manage their financial resources with a little more ease and reduce the pressure of commuting expenses.

Remote work with a corresponding pay cut doesn’t seem to offer a solution

Employees seem very sensitive to the costs of work overall and this appears to influence how well they accept both in-office and remote work propositions. Some companies may attempt to address anxieties about commuting costs by proposing fully remote positions but with a pay cut to account for the savings. However, there doesn’t appear to be much support for this approach.

Amongst our UK sample especially, this idea didn’t hold much water. We found that 70% would not take a pay cut to work remotely. However, 23% said they would accept a drop in pay of up to 5%, and 6% of the sample say they would accept a cut of up to 10%. 

Therefore, there doesn’t seem much credence to the idea that offering a lower salary for remote positions to factor in savings made on public transportation can sway employees. This may be linked to the fact that the costs of working from home have also risen, suggesting that offering remote work options in return for a lower salary might not offer a solution.

Finding flexibility to reduce costs

When employee pay cannot go up to accommodate the rising costs of living and work, employers may consider other options to help staff cope. Flexible policies could prove practical in businesses where remote or hybrid policies don’t already exist. A few options in policy management may work in this situation: 

  • Flexible start and finish times allow staff to avoid higher costs of travelling at peak times. This can have the added benefit of softening a commute due to lower volumes of traffic outside of rush hour. This initiative proved very popular with our UK respondents, with 71% saying they would enjoy going to their workplace more if it were offered.
  • Operating fewer days in an office and switching to a hybrid system of work. This can reduce commuting costs as employees won’t need to spend money on commuting daily.  
  • Remote working arrangements in return for a lower salary for those who opt-in. However, as we’ve already seen, this is not a popular option and this might not have much uptake amongst staff as a result.

Supporting employees in the wake of rising transport costs 

As seen from our study, many employees in the UK are experiencing much higher work-related costs than in previous years. This is felt acutely amongst staff travelling to work by car or public transport at least some of the time due to the extra expenses involved.

It is crucial at this time to look at how employees can be supported with higher transport costs, especially if there is no way to increase pay alongside these price hikes. This is especially vital if they are required to make expenditures due to company policies, such as mandated in-office days.

Some options to take into account that can reduce these costs include:

  • Providing affordable parking options for employees commuting by car.
  • Considering the impact of the costs of petrol and public transport cost rises on employee compensation and in-office requirements.
  • Assisting employees with increasing transport costs via initiatives such as financial wellness programs, discounts, subsidies, and transport ticket loans.

In part two of our analysis, we consider the global picture surrounding the costs of work for staff. This will look more closely at how the UK staff have been impacted compared to other employees around the world.

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Methodology

Capterra's 2024 Cost of Work Survey was conducted online in March 2024 among 2,716 respondents in the U.S. (n=250), Canada (n=250), Brazil (n=244), Mexico (n=245), the U.K. (n=248), France (n=244), Italy (n=250), Germany (n=246), Spain (n=246), Australia (n=248), and Japan (n=245). The goal of the study was to learn about the costs employees incur to work whether remote or onsite. Respondents were screened for full- or part-time employment.