Today’s working world is almost entirely mobile. In fact, the global mobile workforce is expected to reach 1.87 billion workers by 2022. This isn’t a surprise. Innovations in mobile broadband and computing have made devices increasingly portable, easier to use, and affordable. With these adaptations, the ability to conduct business outside of the traditional office is more possible now than ever before. Naturally, the growth of the mobile workforce has become more prevalent.
It’s not uncommon for today’s organizations to be comprised of entire teams who aren’t anchored to a desk. Employees like field service technicians, delivery workers, sales representatives, and travel consultants are constantly on the move. They may visit multiple locations in a single day. In a world where the workforce is enabled to be more mobile, it’s paramount that employers set up programs that keep employees safe, satisfied, and focused on their work. If not? Productivity is likely to suffer.
Each year, we take a pulse check to get a sense of the key trends and challenges that affect the mobile workforce. For our most recent report, we surveyed more than 2,000 organizations to identify the three top challenges that businesses with mobile workers currently face. Those include visibility into vehicle programs, overspending on fuel, and driver safety.
Vehicle program visibility
According to our research, organizations’ average business mileage is on the rise. Most mobile employees are required to track and record this business mileage. And they have many different methods to do so. About half of all organizations (49%) leverage mobile apps for automated mileage tracking. But 42% of organizations are still manually logging and entering mileage information into a spreadsheet or T&E system.
These manual mileage logs can be a hidden expense for employers. Placing this responsibility on employees forces them to spend more time on administrative tasks and less time in the field – making them less productive and, therefore, less profitable. Our research found that adopting automated mileage tracking has proven to save an hour or more each week per employee. That means a mobile worker unknowingly wastes more than 52 hours logging and reporting mileage throughout the year.
A small number of organizations (20%) have automated mileage reporting that feeds directly into their T&E system. This emerging practice is another way to improve productivity as it reduces the administrative burden of keeping manual mileage logs and submitting expense reports.
The average vehicle program cost per mobile worker increased by 5% year-over-year. Businesses should look at their current programs to determine what type of program makes the most financial sense. At a high level, the most popular programs include:
- Cents-per-mile (CPM) (or mileage reimbursement) programs: Companies reimburse mobile workers for business travel in their personal vehicles at a fixed rate per mile traveled.
- Car allowance programs: Companies provide a flat rate (often per month) to reimburse employees for using their personal vehicles.
- Fleet programs: Companies provide their mobile workforce with a leased or company-owned vehicle.
- Fixed and Variable Rate (FAVR) reimbursement programs: Companies reimburse mobile workers for the business use of their personal vehicles based on how much they drive and the fixed and variable costs of where they drive (e.g., insurance, license and registration fees, gas, maintenance).
Our report found that most organizations use multiple types of vehicle programs to manage their mobile workers. While CPM is the dominant program, organizations usually pair it with another method for frequent/high-mileage mobile workers. Those generally include car allowances, fleet programs, and FAVR programs. While more companies opt for car allowances or fleet programs, FAVR reimbursement programs cost about 6% less per employee than the average vehicle program. This is due to FAVR’s more accurate approach to fluctuating costs, costs including gas and insurance, that can vary by region.
Overspending on fuel
Gas prices are constantly changing. Last year, they were on an upward trend, but this year prices are trending downward. Our report found that self-serve, regular fuel averaged $2.74 per gallon. This is a 14% increase over the previous year’s national average and the second consecutive year, where the national average price increased by more than 10%.
For any employee on the road, fuel is a necessary – and substantial – expense in business travel, accounting for 25% of the cost to own and operate a vehicle. But the cost of fuel affects companies differently depending on their vehicle programs.
Businesses that provide their drivers with company-owned vehicles may be spending more on fuel than necessary. This depends on how they track personal use of business vehicles. However, by comparing the cost of fuel at gas stations within a 3-mile radius, the average mobile worker can save the equivalent of three to seven tanks of fuel per year. Gas tracking apps are an easy way to collect and compare gas prices. With organizations reporting that an average business mileage of 16,752 miles per worker, these savings can add up.
Lack of driver safety
Despite fuel price volatility, organizations reported the highest average business mileage of the past five years. With mobile workers driving more miles for business than ever before, the risk of car accidents has increased.
Unfortunately, driver safety is often overlooked by companies. For example, only 29% of companies take corrective action – such as requiring driver safety training – when employees have multiple traffic violations on their recent driving record.
However, employers who do take steps to manage risk and improve the level of driver safety in their organizations stand to benefit from both a productivity and cost-savings standpoint. Whenever mobile workers are involved in car accidents, organizations suffer from productivity losses. Our report found that accidents cost employers with company-provided vehicles 94,967 lost workdays in a single year.
Employers can combat this loss by taking steps to identify risky drivers in their mobile workforce by conducting continuous motor vehicle record checks. Using a scoring system to measure driver safety could also help quantify an organization’s level of risk and identify areas for improvement. Unfortunately, only one out of every three organizations does this today. Finally, individualized safety programs can be implemented to help each employee focus on the specific skills they need to combat hazards on the road.
As the mobile workforce continues to expand, companies face challenges of managing fuel spend and ensuring driver safety in their vehicle programs. Understanding how to combat these challenges improves operations for businesses. What’s more, mobile workforces benefit through increased productivity, reduced risk, and better focus on the road.