How does the rising cost of fuel affect recruitment?
You can’t help but notice the oil price headlines and the cost of filling your car up these days.
Let’s forget about the underlying costs of oil, the amount of VAT or the profits made by the retailers. That’s a subject for other blogs.
I’m interested in the impact this is going to have on corporate recruitment. Are you recruiting for an office that’s a good distance from your potential candidates? Are you based in a city centre, or London?
On the car front I’m very lucky – I live and work in London. I quite happily commute to work on the tube – better than that because of the hours I work and the location of our office and my home tube stop on my tube line I get a seat both ways, every day. My wife looks after our children and given that we do our best to lead as wholesome a life as possible, we seldom use our car. In fact, we fill it up about once every three months. Whilst lots of people complain about the cost of tube travel, my Zone 3 travelcard costs around £1,000 per year.
When I used to work at Microsoft I spent most of my time on a project commuting between Oxford to St Albans. This was a 50 mile trip each way – so, 100 miles per day, 500 per week, or about 20,000 miles per year. The car I had would average about 30 miles per gallon. At the time, fuel was about 60p a litre (x4.545 for gallons) or £2.72 per gallon. So, my rough calcs tell me that I must have been spending:
20,000 mile per year divided by 30 miles per gallon =
667 gallons of petrol = £1,814 per year.
In order to pay for this I need to earn about £3,500.
Not to bore you with the calcs, but today given the current cost of fuel, about £1.22 per litre, that same commute would cost me over £3,600 per year. So, again working from similar principles as before, I now have to earn around £7,000 to pay for my commute. And that’s just fuel. It doesn’t take into consideration the cost of the car, maintenance, insurance, etc.
For your average professional on £35,000 per year that’s 20% of your salary on commuting – assuming they have the awful commute that I had.
Is that going to have an effect on where you take your next job?
I’ve put together a ready-reckoner below to demonstrate the cost of certain commutes, but needless to say, that as a candidate you have the following choices when weighing up a job with a lengthy commute:
1. Negotiate a better salary.
2. Suck it and see.
3. You might be lucky and have good public transport links.
4. Get a more efficient car.
5. Take another job…
As a recruiter your choices (or those of your company) – maybe should include a fuel/distance weighting – a bit like a London weighting. This could help attract candidates who otherwise might not consider your company due the distance from home.
| Miles per gallon | Commute distance (in miles) | |||||||||
| 5 | 10 | 15 | 20 | 25 | 30 | 50 | 100 | |||
| 25 | £436 | £872 | £1,308 | £1,744 | £2,180 | £2,616 | £4,360 | £8,720 | ||
| 30 | £363 | £727 | £1,090 | £1,453 | £1,817 | £2,180 | £3,633 | £7,267 | ||
| 35 | £311 | £623 | £934 | £1,246 | £1,557 | £1,869 | £3,114 | £6,229 | ||
| 40 | £273 | £545 | £818 | £1,090 | £1,363 | £1,635 | £2,725 | £5,450 | ||
| 45 | £242 | £484 | £727 | £969 | £1,211 | £1,453 | £2,422 | £4,844 | ||
| 50 | £218 | £436 | £654 | £872 | £1,090 | £1,308 | £2,180 | £4,360 | ||
| 55 | £198 | £396 | £595 | £793 | £991 | £1,189 | £1,982 | £3,964 | ||
| 60 | £182 | £363 | £545 | £727 | £908 | £1,090 | £1,817 | £3,633 | ||
- Mike
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