How the Cost of Living Crisis is affecting Field Engineers and their employers

How much travel does a Field Engineer do and what is the cost?

The amount of travel carried out by a Field Engineer varies depending on the industry, the country and the company. It ranges from short daily trips within a 50 mile radius to multi week stays in another country.

The current challenge is that mileage allowances and subsistence allowances change regularly but not frequently.

Field Engineers are buying fuel at a price which is changing rapidly, almost on a daily basis. Whilst mileage allowances are fixed in advance.

The further challenge is that Field Engineers need to purchase food and accommodation that are rising in cost. At the same time subsistence/ per diem allowances are a fixed sum which is calculated in advance.

How are costs reimbursed?

I discussed the issue with Jorge Bolivar, a Field Service Engineer with Micro-Poise Measurement Systems. Jorge is based in the USA.
How has the sudden rise in cost of living and particularly fuel prices impacted you?
Jorge told me that the sudden rise in cost of living hasn’t affected him in a work context. He travels as a Field Service Engineer and uses a corporate credit card to pay for overnight accommodation, fuel, and, daily meals & incidental expenses (M&IE).
What happens if the per diem rate is not sufficient?
Jorge knows of a few Field Service Engineers who have been asking the company to raise the per diem rate/subsistence allowance. At the moment, the company is just covering the extra amount of cash they need on a daily ad hoc basis. He feels that this is a messy situation and not efficient.

An example

Do you know of Field Engineers who are being severely impacted by the rise in prices?
Jorge gave an example from a friend’s job interview process of a company offering their Field Engineers the following allowance:
$115 USD daily lodging, $50 USD for daily M&IE/subsistence allowance, and $0.58 mileage reimbursement.
He feels that $50 USD is not only outside the government per diem rates, it is also not up to par with the real cost of living.

It is not easy to eat healthily three times per day for $50. Jorge says that in his opinion trying to get a company to change rates is a tough job for a Field Engineer. He added that when companies revise allowances it is usually not fast enough. This is especially true in times like now, of rapidly increasing prices. For example, in the USA, per diem rates are revised and set each fiscal year with a cut-off date of October 1st. Meanwhile, Field Engineers and other colleagues are trapped in a situation of rising prices, and are out of pocket.

Jorge estimates that the price increase for cost of living on the road has spiked at around 18 / 25%. This is based on a rough calculation he made a few days ago.

Impact on the customer

How quickly will this impact the customer?”
Jorge feels that the increased costs are already being passed on to the customer. If costs continue to rise, he can see situations when they decide to stop using the field engineering service.

How are employers reacting to the challenge?

A solution from Sartorius

I asked Jerome Varvaro, Head of BPS Service, for Sartorius. Jerome is also based in the United States, with responsibility for the USA, Canada, and Puerto Rico.
Jerome told me that the costs associated with travel are definitely having an impact on their field team.
What is your solution?
In the short term our managers have the flexibility to sign off expenses that may exceed our per diem rates for meals as food costs have risen, especially in major cities. We are working on re-calculating the per diem guidelines for current market conditions.
Our mileage rates are tied to the IRS specification and that has gone up this year over 2021.
We are also looking at compensation, and are in the process of evaluating/adjusting for our incumbent field team and managers. We are also aligning our offers to new hires.
One thing left to look at is our car allowance. Fleet car costs are absorbed by the company but some employees elect to take a car allowance re-imbursement. This has to be looked at as the market for cars has been drastically affected by not only inflation, but by supply chain shortages.

A solution from Sealed Air Corporation

I also asked Esther Vera, Talent Acquisition EMEA for Sealed Air Corporation, for her view. Esther is based in Spain.
What is your policy for when your Field Engineers are travelling?
In Sealed Air all our Field Service Engineers have a company car and fuel is 100% paid by the company. The same applies for other expenses while travelling. To date, we have not implemented any measures to restrict those expenses because we prioritize the service we are delivering to our customers. We trust in the best judgement of our technicians and their managers. I do not know how the future will be if the cost of living and energy prices continues growing….

How quickly are your people reimbursed, and is this likely to create any issues going forward?

Esther says they use a Company Credit Card and a Company Fuel Card, so they are not out of pocket and there is no need to receive reimbursement.

Are you also facing challenges as Covid is still around?
Yes, Covid is still there, and our Zero Harm policy is strongly applied. That means that the health of our employees is first. So we are asking our customers to take all measures needed. If our employees do not feel secure, they do not have to continue with the visit.

What do you think? How is the cost of living crisis affecting you? What else could employers do to support you?

If you are an employer, do you have any recommendations?

Worth Sharing!

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