why it’s good news for HR, employees and the bottom line
Salary sacrifice schemes and cycling to work
—a winning combination for employers and employees
Drawing on international research and personal cycle-commuting experience in Hong Kong, Paul Arkwright, Publisher, HR Magazine shares the pros and cons of cycling to work from an HR perspective. Decide if cycle-commuting is for you, and learn how HR can enhance productivity and save the company money by encouraging staff to cycle to work each day.
What has cycling got to do with HR?
Now before you start laughing about the idea of cycling to work in Hong Kong and wondering how it is linked to HR, let me tell you right now I have cycle-commuted on numerous occasions from my home in Sai Kung to our office in Jordan, next to Tsim Sha Tsui. Yes, it is dangerous, there are no two ways about it, but so long as you work to minimise the risks—cycling to work can bring a host of benefits including enhanced employee health and engagement, reduced carbon footprints and significant tax savings for employers.
Are you completely mad?
Yes—well almost. I’m no stranger to being ‘invisible’ on Hong Kong’s roads, as I frequently commute to work by motorcycle, however, being on a bicycle, takes things to a whole new level. As you mount the saddle and take to the roads for the first time in Hong Kong, it is a pretty daunting prospect. Many of us have hired bikes and pottered along next to the Tolo Highway for a day out to Sha Tin, Science Park, Tai Wai, Tai Po, Tai Mei Tuk and the like, and the Government is currently developing a 60km cycleway to link Tuen Mun to Ma On Shan by 2012. As they state, this will, “Provide a safe passage for cyclists to travel across most of the New Territories upon completion.”
This is great news for relaxing holiday bike rides, but when it comes to employees commuting to work by bicycle, this is not very relevant. Unless employees live and work along the Tuen Mun-Ma On Shan cycleway—their commute will involve a considerable amount of pedaling through traffic-ridden urban areas. So why on Earth should HR encourage employees to cycle to work?
Fitness perspective
Anyone who has seen me would easily know I would be much happier lifting a few pints after work than I would be lifting weights in a gym. So I am not promoting cycling to work primarily for health reasons—in fact with air pollution being what it is in Hong Kong—employees have to be in reasonable shape, and asthma free, simply to survive the ‘breathing part’ of a cycle-commute to work, let alone the vehicular traffic they share the road with. That said, when employees ride to work, painful as it sometimes can be during the journey, they tend to arrive at the office energised and ready to go. There’s plenty of truth in the old adage, ‘healthy body-healthy mind’, and a sharp jolt of physical exercise certainly helps get the grey matter churning in the morning.
A recent survey of over 44,500 employees in the UK, examined what motivated people to cycle to work and why employers might want to encourage cycle-to-work schemes to their staff. The survey indicated that 98% of employees would encourage other colleagues to take part in a cycle-to-work scheme.
Following the introduction of such schemes by the UK Government, the survey revealed that 87% of participants noticed health improvements, with 84% rating the scheme as an important and easy way to keep fit. The research found that almost two-thirds of people did not cycle to work before they signed up to the scheme—most classifying themselves as novices or, at best, occasional cyclists.
Cycling in a suit
One of the main drawbacks of cycling to work is the fact that you arrive at the office sweating—and so obviously cannot cycle in your suit. So, in the interests of remaining approachable to colleagues, cycle-commuters are going to need somewhere to shower and change into their business attire before they can actually sit down and start work.
And if, as is the case with our office, you don’t have the luxury of an A-grade building with showers in the bathrooms, cycle-commuting employees are going to have to make other plans. Aside from persuading the Board to move to a better office or booking a hotel room every day, there are more cost-effective options available. The option I favour is to make use of the Leisure and Cultural Service Department (LSCD) fitness centres, in which case, as well as having access to changing rooms and a shower; you also have the added incentive of doing a bit of gym work.
The LSCD gyms are open to anyone with an ID card who has attended their ‘fitness (multi-gym) training course’. This course comprises 12 classes, covering warm-up exercises, practical fitness exercises, lectures and demonstrations on the proper ways of using the fitness equipment in their gymnasiums. At HKD 75 for the 12-session course, there’s little excuse for staff not joining, just remember expatriate staff will have to brush up a bit on their Chinese, as courses tend to be conducted in Cantonese. Alternatively, staff may join one of the many private gymnasiums in Hong Kong.
Environmental perspective
By cycling to work staff generate zero roadside emissions, which aside from walking is the most environmentally-friendly means of getting to the office each day. It is estimated that users of the cycle-to-work scheme in the UK save almost 150,000 tonnes of CO2 emissions per year—which is equivalent to removing around 20,000 cars from the road each year.
Financial perspective
Parking fees in Hong Kong along with petrol are exorbitant, and so a major advantage of cycling is savings in both these regards. Motorists can expect to save at least HKD 3,000 a month in parking and fuel expenses, not to mention the fact that repairing a bicycle is significantly cheaper than taking the car to a mechanic.
In 2009, the US congress enacted the Renewable Energy Tax Legislation that includes the Bicycle Commuter Act, a tax incentive for people who commute by bicycle. The Act allows employees to receive USD 20 each month to offset the purchase, improvement, repair and storage costs of bicycles used for commuting purposes. Other countries have gone even further, and in Belgium, employers pay employees per kilometre to cycle to work—up to a maximum of 15 km per day. This means employees can be financially incentivised to the tune of over HKD 600 per month simply for cycling to the office as well as having the cost of the bicycle, and its maintenance and storage fees covered by their employer. Employers, in return, receive a tax credit for all capital invested in the programme.
Saving HR money: salary sacrifice scheme
Nearly half a million people have already taken advantage of the cycle-to-work scheme in the UK since its introduction in 1999—involving over 2,000 bike retailers and 15,000 employers. Under the scheme, employers loan bicycles and cycling safety equipment to employees, which are a tax-exempt benefit for the purpose of cycling to work. At the end of the loan period, employers can then give employees the option of purchasing the bike and safety equipment.
The UK scheme involves several key steps:
- Step 1: Employers sign up to join the scheme.
- Step 2: Employees wishing to participate visit a registered bike rental shop to choose the bike and, if required, safety equipment. The employee will usually sign an online hire agreement at this time.
- Step 3: Once the employer approves a staff member’s application they then countersign the hire agreement and pay the full retail price of the bike and equipment.
- Step 4: The bike rental shop then issues a certificate to either the employee or the employer, wherever is requested.
- Step 5: Staff then redeem the certificate in the bike shop in exchange for the bike package. Salary sacrifice then commences over the hire period (usually 12 months).
- Step 6: At the end of the hire period the owner of the bike may choose to offer the employee ownership of the bike for full market value.
The salary sacrifice occurs when an employee agrees to give up part of their salary for an agreed period, in the case of the cycle-to-work scheme this is usually 12 months, in exchange for some kind of non-cash benefit, such as the loan of a bicycle and safety equipment. As salary sacrifice is taken from the gross salary—before tax—rather than net pay, it means employees pay less income tax. Employers also save, as the amount they pay in wages is also lower. Typical savings in the UK are between 40% and 50%, but the actual amount depends on the employee’s personal tax band and the way the employer runs their scheme.
These savings were by far the most important factor in staff deciding to join the scheme, which has proven extremely popular with employers. According to Towers Watson, in the UK it was the second most popular salary sacrifice-based employee benefit, with 82% of employers offering such schemes making it available to their staff. Mark Smith, a representative for the Cycle to Work Alliance said, "Employers are seeing the benefits of a healthier and more engaged workforce—vital as the country moves out of recession."
The realities of cycle-commuting in Hong Kong
I-just-can’t-be-bothered mentality
From experience, I know that waking up in the morning and contemplating a cycle into work is not something I relish. It’s all too easy to hop in the car or on public transport and say ‘I’ll cycle tomorrow’, instead of donning your cycling gear and getting out there and actually doing it. So, like any exercise, you have to mentally ‘force’ yourself into doing it, and even if you don’t really enjoy it, you have to try and focus on all the advantages it brings, while you try and forget about the pain in your leg muscles and your saddle-sore behind.
Traffic terror
As a cycle-commuter you need to get psyched-up for heavy traffic in the urban sections of your route—which will make up 100% of the route for many in Hong Kong.
Despite riding in the gutter for most of my route, on average I get honked at about five to ten times a day during my commute, along with one or two near misses—minibuses and buses being among the worst offenders of seeing just how close they can get to your bicycle.
Having a 10-tonne bus racing past at around 30kph, two centimetres away from your handlebars is not for the faint hearted…never mind, you can always ring your bell!
To help minimise ‘traffic-terror’, where possible—and I appreciate this is difficult—try to select quieter routes, or off-peak times for your cycle-commute to the office. HR can help in this regard by providing flexible working hours for staff.
Can’t breathe
Another downside with cycle-commuting in Hong Kong is that with so much, if not all, of the journey being in areas of high traffic density—cyclists find themselves exercising and repeatedly inhaling traffic emissions—with their noses about two feet away from the exhaust pipes. I know of two ways of mitigating this.
Firstly, cycle-commuters can wear a face mask, to help filter out the worst of the particulates—although this is not a comfortable option, particularly in the heat of summer.
Secondly, cycle-commuters can try to select a route that avoids as much traffic as possible—something a lot easier said than done in Hong Kong. As I live in Sai Kung, there are a limited number of, all-be-them extremely steep, small lanes that help facilitate a relatively traffic-free route out of the New Territories and into Choi Hung. From thereon in I have no option but to join the main roads.
Convoluted city routes
In the city, rather irritatingly, cyclists have to follow convoluted routes—often longer than those by motorised vehicles—because cycles are banned from most of the key flyovers connecting arterial routes into the city.
The upshot is that cycle-commuters, rather perversely, can find themselves adding an extra couple of kilometers to their commutes, compared to those in motor vehicles.
They may also find themselves occasionally having to get off and carry their bikes over pedestrian footbridges and/or under subways to get safely to the road they want to be on. Unfortunately, things are not much better in countryside sections of Hong Kong, as one must be careful to select routes that are ‘allowable’ for cycles.
If staff living close to country parks plan to include a country park section on their commuting route, it should be noted that cycle access is extremely limited and apart from those ordinarily resident within country parks or special areas, others are not allowed to bring—by riding, pushing or even carrying a bicycle into country parks.
The exception is on designated mountain bike trails where cycling is allowed, but even then cyclists must apply in advance for a permit to ride—or risk a fine of HKD 2,000; wear a helmet and brightly coloured jersey; have wheels wider than 4.5cm; and avoid cycling at dusk or night time. The AFCD perform regular spot checks for any errant cyclists.
The whole situation creates something of a paradox for cyclists in Hong Kong. The Government GovHK website quotes, “Whether in urban areas or in the countryside, there are always some nice places for you to cycle safely and out of the traffic.” The reality is that those ‘nice places’ are far from helping most staff commute safely to the office.
Unless staff both live and work near one of the limited number of cycleways or designated mountain bike trails in the SAR, then most are forced to share the regular roads with the mêlée of vehicular traffic. Cycle helmets are strongly recommended, and required by law for those using designated mountain bike trails in the country parks.
Conclusion
So is it really possible to commute to work in Hong Kong by cycle? Yes it is, but it requires a bit of preparation and a lot of courage. Although, staff have to be prepared for riding on regular roads with heavy traffic, on balance, I would still say it is worth the effort because of the mental and physical benefits it brings.
In the short-term, this allows staff to be more productive and get more done when they arrive at the office, and in the long-run it helps enhance staff health—reducing absenteeism and healthcare costs. Moreover, if cycle-to-work incentive schemes are adopted by employers they can help save money for both employees and employers.
If you already encourage staff to commute by cycle, or you plan to, let us know and we’ll help share your story.
Paul Arkwright
Publisher
