Surface Ripples

Should Employers Pay for Work From Home Expenses?

 I responded to this question in LinkedIn, but thought I’d share here as well.  The concept of Work From Home (WFH) has become more prevalent as employers try to keep staff safe from potential infection by the COVID-19 virus, but this has given rise to a slew of other (unforeseen) issue, one of which is this one.

Let’s take the situation where people don’t work from home (WFH) as our starting point.  In this case, the employer provides: 

Additional facilities might consist of:

12. Meeting/conference/training rooms
13. Staff canteen (free or subsidised)
14. Gym
15. Childcare (in some cases) 

Employees are responsible for:

16. Cost of getting to/from work
17. Their own meals

Now shift to the opposite extreme: the home worker is responsible for #1-8 above, as well as #16 and #17.  They will still need IT support in the event that their PC/printer don’t function and still may need to look after smaller children.  They save on costs of transport.

The employer saves on #1-#15 above.  Major cost savings will be office space, contracted clearers, other contracted services and utilities.  

The employer’s responsibility is to provide the conditions and shoulder the expenses required to produce products or services.  Workers provide labour to create said products or services in return for a salary.  Employer sells said products/services at a cost that covers all expenses and allows for a profit.  

When you remove certain expenses, the following could happen: 

By the sound of it, some employers are choosing option #1, whereas others feel that they should be going for option #2.  I notice no one has suggested options #3 or #4…

Now the consequences.  If the employer chooses option:

1. Workers become unhappy and may leave. Customers realise employer has lower costs but is not passing these on as lower pricing and switch to a supplier who does.  Employer loses workers and business.

2. Employer retains workers at increased salary which workers allocate along with savings on transport to setting up office space in home.  Customers realise employer has lower costs, is not passing those on as lower pricing and switch to a supplier who does.  Employer loses business, has to reduce headcount.

3. Employer retains customers through reduced pricing and some of their workers.

4. Employer retains loyal workers at increased salaries and customers with reduced pricing, stays in business.

It all depends on the different markets and how easy it is to find new workers.  With the COVID pandemic seeing significant job losses, employers are in the proverbial driving seat.  They may also need to retain as much profit as they can to ride out the current storm and provide jobs for their current workforce.

Customers may exert pressure to reduce prices to them due to cost savings, assuming that they’re in a strong enough position to do so.

The worker, at this point in time, is not in a strong position unless they have specific skills that the employer cannot do without and that are not easily acquired or taught.  

Conclusion: the best strategy would be for employers to develop a “WFH Package” that might include some/all of the following:

1.      Desktop (not laptop) computer
2.     Printer
3.     Contribution to cost of calls and broadband internet access
4.     Contribution for WFH stationery items
5.     Access to IT support lines (paid or part of the employer’s workforce)

This could be by way of a one-off lump sum payment for items 1-2, and a small monthly allowance for 3-4.  Employers could even have arrangements with an approved IT supplier to provide, maintain and replace PCs and printers at regular intervals.

In the end, it all comes down to budget and what people are willing to spend.  With the money saved from commuting, employees have more disposable income, the employer may need less office space.  Both can afford to compromise.

I’ve spent more than half my life delivering change in different world markets from the most developed to “emerging” economies. With more than 20 years in international financial services around the world running different operations and lending businesses, I started my own Consultancy to provide solutions for improving performance, productivity and risk management.  I work with individuals, small businesses, charities, quoted companies and academic institutions across the world. An international speaker, trainer, author and fund-raiser, I can be contacted by email. My website  provides a full picture of my portfolio of services.  For strategic questions that you should be asking yourself, follow me at @wkm610.

Labels: Leadership, Strategy, Teamwork

posted by William Martin @ 10:51