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Rethinking Work-Related Expenses during WFH

HR may need to rethink work-related expenditures in the age of remote work

by Elle Mason

As we’ve surpassed the first 365 days of working from home, for many of us, what used to count as personal expenses would now be better considered work-related expenses. As homes double as an office space, employees around the country are finding that there are unanticipated costs that they’re now forced to pay for. This article is meant to cover how HR may need to rethink work-related expenses – especially if businesses continue to stay home.

What types of expenses are there that may not previously have been covered but might need to be covered now?

Internet is a major expense. While many leaders might assume “everyone” has internet at home – this is not actually the case. Almost 1/3 of US households don’t have broadband internet access. And beyond access, it’s possible that many employees intentionally opted out of using internet and smartphones in their home and personal lives for personal or financial reasons – meaning that work-from-home initiatives required them to start from scratch in setting up and accessing these services.

Additionally, remote work expenses can include:

  • Increased electricity usage
  • A need for a space upgrade – for example, someone moving from a studio apartment to a one-bedroom apartment
  • Remote work station equipment including desks, chairs, monitors, cables, keyboards, printers, ink, paper, storage centers, headphones, smartphones, laptops and more.

What types of expenses previously WERE covered and may not be as relevant now?

While the most obvious expense might be office space, mainly people overlook the smaller costs that accompany a physical office beyond just rent and utilities. There are also general maintenance, cleaning and upkeep costs, parking, and any building management fees to consider.

Being in the office also compels people to spend money on socializing – often based on food and drink activities, like: Monday morning coffees, Friday morning breakroom bagels, team lunches, birthday cakes, lunch meetings and beyond.

The decision to support employees by revisiting work from home expenses will have a massive impact on their experience – leaders should be sure to consider employee sentiment, and allow them to weigh-in on this – whether through 1-to-1s or surveys on the areas where they are spending money that they used to not spend. To highlight this how important feedback is, a number of businesses decided that whatever employees were now spending was accounted for through the cost of commuting being saved – but commuting costs aren’t made equally! An employee who intentionally moved around the corner from the office and walked to work is now spending more. Not to mention, some employees may take public transportation, drive long distances, or carpool. Without employee feedback, there’s no way of understanding what they’re saving, what they’re spending and how their remote work expenses have changed.

But once the feedback is gathered, many leaders may find themselves having a hard time deciding what to cover and what to exclude. To start, there are a number of factors that should be considered by leadership when deciding whether or not to reimburse for particular items. For example:

What does the budget currently look like? And what are the anticipated costs of adding a proposed remote work benefit? Supporting a major expense when a business has 10 employees looks drastically different if they grow to 100 employees or 1,000 employees. Rolling back benefits or taking back a perk if it becomes too costly can be perceived as a reduction in pay – so leaders should think carefully before introducing anything new, or if needed, make it clear up-front that it’s a temporary benefit.

What is a reasonable expense?

Ah, the question of the decade. While this is often at the discretion of leadership, a reasonable expense is generally one that is incurred during the course of performing job duties. This can include equipment like phones or computers, business travel, meals during that travel period, and much more.

GoCo’s workflows feature allows you to streamline any HR checklist into an automated process, INCLUDING expense reports. As you think about what to include in expenses, it’s also important for your employees to be able to easily start an expense workflow, and get it acknowledged quickly. Manual processes for expenses often get lost in the cracks and make your employee feel unvalued or less likely to be willing to request a reimbursement. GoCo workflows let you build a custom expense report workflow, assign approval tasks, and track the progress of the reimbursement.

How do you balance supporting your employees with being financially responsible?

There are a few approaches that businesses can take to manage the costs of expanding benefits into remote work expenses. One model is by issuing the necessary equipment (including machines, cables, etc.) that employees need – rather than allowing them to purchase it and apply for reimbursement. Additionally, setting a stipend per employee is another way to avoid any surprises or hidden costs. While you may not be able to cover everything, even a good faith effort will go a long way towards making employees feel supported, and after all – a cost that might be negligible to a business could be life-changing to a family.

How do you update the policies and guidance?

Ultimately, it’s up to you and your business to determine what expenses should be covered, but that remote work is now part of the Future of Work, so regardless of which way you lean, it’s time to reconsider more broadly. Certified HR advisors in GoCo’s HR Support Center can give guidance on the future of work expenses, what they may be seeing across the board, and how you should approach rethinking your processes.

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