As more firms adapt a data-supported approach to HR decision-making, new data is revealing that commute issues can have a major impact on hiring success and retention. Now you may have assumed that commute issues were an obscure factor with only a minor impact, but you would be wrong.
You probably already know that long commute times frequently increase new-hire tardiness and absenteeism rates, but data now reveals that commute time can have a major negative impact on new hire retention. Firms like Xerox, KeyBank, and Gate Gourmet and advisory firms including Kenexa, Workday, and Evolv have found a connection in many jobs between commute time and new-hire retention and new hire success. Research by consultant Jeff Parks found that at one manufacturer “at 13 miles, which is about a 30-45 minute commute, the probability of quitting jumped to more than 92 percent.”
A Minimal Commute Has Extra Benefits
Research by Evolv (now merged with Cornerstone) found that even having an extremely short 0-5 mile commute distance “leads employees to remain at their jobs 20 percent longer.” Acknowledging the value associated with living close, Facebook in the past offered a $7,000 yearly bonus for employees who lived within a mile of its headquarters, making it easy for workers with new ideas to stop by at any time. The messaging company Imo offered a $6,000 annual bonus for living within five miles of its office, and most employees have taken advantage of it.
A Case Study on the Impacts of Commutes on New-Hire Success: Gate Gourmet
Gate Gourmet, which does Airline catering at O’Hare airport, had a turnover rate among new hires of nearly 50 percent. Then it used both external and internal data to precisely determine the real factors that led to poor new hire performance and turnover. Rather than finding out that traditional selection factors were the key predictors to new hire success, it instead found that commute times (that averaged nearly 35 minutes) to be the major cause of the new-hire performance and turnover problems. As a result, the firm changed its hiring criteria to put more weight on an applicant’s “accessibility to public transportation” and “how far the employee lived from the job site.”
As a result of this new focus on commute time, the firm reached “fully staffed” status for the first time and it was able to lower unwanted turnover to 27 percent.”
Revealing the Many Negative Business Impacts Resulting From Commute Issues
Before you brush aside the need to consider commute issues, consider this long list of the many potential negative business impacts that may result from commuting related issues that are not addressed.
Decreased productivity issues
- Increased absenteeism — missed work days are expensive, especially if you add the cost of hiring replacements to fill in and the higher error rates that fill-in labor can have.
- Frequent tardiness — bad commutes increase lateness and it requires a lot of management time to handle each one.
- Higher turnover rates — over time, data reveals that long commutes that are not mitigated will cause more to quit.
- Reduced employee engagement — commute time or distance may also hurt employee engagement (Xerox Services found that commute distance “is strongly associated with employee engagement and retention”).
- Increased error rates – travel-weary employees are likely to be distracted in the morning after their long commute, and in the afternoon as a result of anticipating their upcoming long commute home. This distraction and stress will likely increase error rates and safety issues.
- Less employee productivity due to stress — increased levels of commuter-related employee stress will also negatively impact employee productivity. There may also be increased stress on the employee due to family issues because the employee is away from them for more hours (one study revealed that couples in which one partner commutes for more than 45 minutes have a 40 percent higher probability of divorcing).
- Reduced team and manager performance — the increased turnover, tardiness, and absenteeism taken together may negatively impact overall team performance and it will take up a great deal of a manager’s time.
Recruiting and other impacts
- Negative employer brand impacts will reduce applicants — current and former employees complaining about the commute and your firm’s efforts and support to make it easier will discourage future applicants.
- Offers rejected — more job offers will be rejected if affected applicants see that major commuting issues are not mitigated by the firm.
- Reduced employee health — research has shown that the prolonged sitting and less time for exercise as a result of long commutes can lead to “less physical activity, excess belly fat, and higher blood “pressure.” These issues can also increase the medical costs to a firm. Living close also makes it easier to walk/bike to work and to visit family and pets.
- Less free income to spend — the high costs of commuting will reduce an employee’s discretionary income, which essentially makes your jobs appear to pay less.
Some Potential Manager and HR Actions to Consider
Commute issues can be mitigated, so here is a list of potential actions that might reduce commuting issues. They are separated into two categories: recruiting and retention.
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A) Recruiting actions — steps for mitigating commute time issues related to recruiting
- Identify whether it helps to predict on-the-job success — Conduct your own statistical analysis to identify if and by how much does commute time reduce the on-the-job success of recent hires in each job family. Even when you include commute issues as one of your assessment criteria, remember to also fairly weight the other factors that also predict on-the-job success.
- It is a frequent candidate job acceptance criteria — applicants will consider the commute as part of their job acceptance criteria, regardless of whether you consider it. Job applicants also need to be aware that putting a ZIP code on their resume may have an impact on whether they are selected. If the new hire must work during off hours or late shifts, commuting issues may be an even larger issue because public transportation may simply not be readily available during non-peak times.
- The impact varies with the job — the commute time may have more of an impact in lower-paying jobs and those jobs where there are many more similar work opportunities that are physically closer to where most workers live.
- Commute time may be more important than distance — be careful of using the ZIP code from a candidate’s resume to determine potential commute issues because the commute time (rather than distance) and the availability of reasonable public transportation may be better predictors of upcoming commute issues. When inquiring about commute time during the interview, ask if the time fits into categories of less than 15 minutes, 15 to 30 minutes, or over 30 minutes. If the firm has an effective transportation support plan for its employees (i.e. help for car/van pools), the negative impacts on job acceptance and new hire work performance may be reduced.
- Be aware of any potential adverse impact — because diverse individuals and those in protected groups may be concentrated in certain geographic areas, track any potential adverse impacts that result from using commute times and access to public transportation as a hiring criteria.
B) Retention actions — steps for reducing commute issues under retention efforts
- Identify the cases when it actually increases the odds of turnover — conduct your own statistical analysis to identify if, and how much of an impact that commute time has on employee retention in each job family. Also do a “flight risk analysis” to identify the specific individuals where commute issues may soon result in turnover.
- Flexible work options can reduce commuting turnover issues — offering “flight-risk” individuals (and new hires) proactive flexible work options have proven to have a significant impact on commute driven turnover. Consider offering four-day workweeks, flexible job starting times (less traffic may reduce commute time), subsidizing public transportation costs, and of course, the ultimate solution, remote work options.
- There may be a delay in turnover impacts — turnover issues relating to commuting may occur right away. But in most cases, they become aggravated over time. Improved local freeways and transportation may mitigate problems. However, commute issues and turnover may get worse when an employee changes residence, when there is an increase in urban growth, when there is an increase in job openings and finally, when a competitor opens a facility with similar jobs that is closer to where most workers live.
Commute times and issues are unfortunately often off the radar of most managers and HR professionals. Even though the average commute time in the U.S. is over 25 minutes, 90 minutes are not unusual. Not paying sufficient attention to commuting issues is a mistake, because commute issues have so many potential negative business impacts that at a large corporation, their related costs could be in the tens of millions of dollars each year.
A focus on commute issues is also critical because many potential retention problems can be identified early on, so proactive actions can be taken by management to mitigate most commute time issues. Finally, if you need more proof of the negative impacts of commuting, survey a sample of applicants, new hires, and current and former employees to assess how impactful commute issues actually are on hiring, productivity, employee health, and retention. And if you are a potential job applicant, the perception of your commute time or distance may negatively impact your job chances.
This negative impact was recently illustrated when a student from my university was recently rejected for a great job with an NFL team for one single reason, and that was “with a 45 + minute commute each way, you will surely quit within two years, wasting all of the training that we would have invested in you.”