The price of gas has doubled over the past three years, hovering around $3 a gallon nationally. Wayne Hochwarter, an associate professor of management in the College of Business at Florida State University, recently conducted research to determine how increased gas prices have affected personal finance, as well as behavior at work. More than 300 employees across a wide range of occupations were surveyed.
"I was surprised to see how strongly gas prices affected personal finances," Hochwarter said. "We casually talk about the effects of gas prices, but we really haven’t gotten a handle on how it affects every spending. We also haven’t determined what role employers have in terms of helping employees manage the stress that comes with spiraling gas prices."
Findings from Hochwarter’s study indicated that most people have had to make drastic changes in the way they spend money. For example:
- 60 percent of respondents have to rethink the way they spend money.
- 41 percent have paid off debt more slowly.
- 43 percent have cut back on recreational activities.
- 25 percent have gone without basic necessities (food, heat, etc.).
- 44 percent are worried about how they are going to make ends meet.
"What was surprising was how changes in personal finance affected behavior at work," Hochwarter said.
Changes in personal finance were associated with lower levels of job performance, less enthusiasm, less willingness to help others, fewer positive feelings about the organization, higher levels of depression and an increased sensitivity to minor irritants at work.
"It is clear that the price of gas has caused significantly more stress at home which is carried over to opinions of work," Hochwarter said.
The stress caused by increased gas prices may be increased by employers’ failure to recognize the problem. The vast majority of employees (92 percent) indicated that their company has failed to even acknowledge that a problem exists, while 30 percent of employees felt that employers should do something to help. When asked, employees indicated that their company should offer financial support. On average, employees felt that a $30 a week subsidy would reduce much of the stress caused by high gas prices.
Interestingly, more than one-third (35 percent) of employees indicated that they would change jobs with comparable pay and responsibility if some form of assistance was offered. Finally, only 15 percent of employees felt that the price of gas would affect company profitability.
"Certainly, there are things that organizations can do to help," Hochwarter noted. "Subsidizing employees for their travel is problematic for a number of reasons. However, companies can help by developing carpool programs and offering tips on how to maximize gas mileage. Companies may also find allowing employees to telecommute may alleviate much of the financial strain."
Finally, Hochwarter found that employees who were affected the most were more likely to report that their company was unsympathetic to the problem. "Acknowledging the difficulties associated with high gas prices is important," he said. "So is communicating how gas prices affect the company’s bottom line."