How Far Is Too Far When Commuting To Work?

02.13.2018 / Zachery Tweddell

Director, Marketing & Innovation

The Math Behind Commuting
by Zachery Tweddell, Director of Marketing
 

How far am I willing to commute?
How far is too far?

 

These are just a couple of the many questions we ask ourselves when starting a new job. That said, are we answering them based on what we deem to be convenient vs. inconvenient, or are we taking into account the potential financial ramifications of pushing our radius too far?
 

Let’s take the average American as an example. According to Quicken Loans, the average American earns a gross salary of $35,000 and takes home $2,110/month after tax. Removing transportation costs, they also estimate that the expenses of that same average American will break down as follows:
 

– 30% ($634) Housing
– 10% ($211) Utilities and other housing expenditures
– 15% ($317) Food (at home and away)
– 10% ($211) Debt repayment (student loans and credit cards)
– 10% ($211) Saving
– 5% ($106) Clothing
– 5% ($106) Entertainment
 

Let’s do the math. With an after-tax income of $2,110 and average monthly expenses of $1,585 (excluding transportation), we’re left with $525/month before commuting starts to impact savings or lifestyle. Since we’re using averages for this example, let’s use the standard business mileage rate of 53.5 cents per mile in the U.S. (IRS) to calculate the maximum number of miles you should consider traveling to work each month.
 

$525 (leftover income) / 0.535 (cost per mile) = 981.3

 

What this tells us is that your 982nd commuter mile will tip you into the negative. With an average of 21.75 working days per month in 2018, that leaves you with a maximum daily commute of 45.1 miles. That’s only 22.55 miles each way.
 

Now, the math will be different for each of us, but the formula stays true. If you’re currently in a job with a long commute or looking to take a job with a long commute, it’s important to think beyond the convenience factor of how it affects your life.
 

If you’re an employer and looking to compete in markets surrounding your workplace, factor commuter costs into what you’re willing to pay your employees. We’ve seen many organizations miss out on top talent by not doing so.
 

For example, we came across an organization with the challenge of hiring Occupational Therapists in DeRidder, Louisiana. Of the first five responses they received, one candidate was offered higher pay, for the same job, in Texas and two others switched to a different profession because they could not find feasible OT work in the region. Additionally, the remaining two candidates claimed that refineries are paying top money for OT roles, so they decided to engage in additional training and wait for the next openings.
 

Does the cost of making your job more attractive outway the cost of multiplying the number of applications you need to make a hire? It’s important to know or at least have an estimate of this when forecasting your recruitment spend.
 

For information on how to get geo-targeting right and more accurately forecast your spend, reach out.