As COVID-19 drove American workers into their homes, a significant partnership was formed between employers and their employees. Just as employers have taken on increased expenses due to technology investments and sterilization regimens, employees have also seen their expenses grow.
As employees seek financial assistance from their employers to make their home-based work environments workable, many companies are revisiting policies that were never designed for a home-based population.
Your platform partners know what you and other businesses do
As companies revisit their terms of service, their SLAs, and the value provided by the myriad of platforms they rely on, these partners can also be a resource. In the finance and expense auditing space, AppZen, who provides AI-driven software for finance teams, looks closely at shifts in expense administration and expense policy. Today they issued a study on trends in expense activity entitled, “How employees feel about company expenses during COVID-19.“
The survey of employers with headcounts over 250 employees found various new behaviors and attitudes about expense reimbursement. Among these were:
- Upwards of 69% of employees were submitting home-based expenses before COVID-19 even hit. Home expenses are now being submitted by 75% of employees.
- 46% of companies have a policy that reimburses for home internet during COVID-19; actual claims for internet expenses have risen by 6%.
- Only 29% of employees feel they are fairly compensated for work from home expenses. Included in this category of work from home expenses was childcare.
- 26% of employees say they feel uncomfortable about claiming these types of expenses.
- There were also interesting differences between genders and corporate levels on the org chart related to expectations, norms, and expense behaviors in the study.
Some trends point to divides between the corporate “haves” and “have nots.” Executives often have company credit cards, whereas most staff had to pay their expenses and await reimbursement. The study also highlights the differences between what people “will expense” and what they “will feel comfortable” expensing. We have all been on a roller-coaster ride, and emotions do play into our ability as employers not only to extend benefits but to make employees comfortable in a new paradigm.
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According to Anant Kale, CEO of AppZen, “We are all experiencing changes to working habits in 2020, and that has had a clear impact on company expenses. The data shows it’s in the best interest of companies to have clear policies and communicate them effectively to their employees, so there are no inconsistencies or perceived disparities in how companies are handling employee expenses.”
Larger enterprises versus small businesses
No one wants perceived or actual disparities, but there are disparate realities on what each business can do. Particularly in small companies, it is essential to be flexible with employees while being realistic about what the business can financially bear, particularly in these rapidly changing times.
While broader policies and norms about “what a company should reimburse” take hold, the 250+ companies from this study are different from many small businesses. Larger companies typically have a broader base of cash, access to capital, and potentially even shareholders to help them make the shift to picking up the tab.
When you’re a small business, decisions about taking on employee’s home-based expenses are not merely a matter of policy or fairness. Many small businesses—particularly in light of COVID-19—are simply in no position to pay for their employees’ internet, ergonomic chairs, and even something as potentially critical (and expensive) as child care.
If you own a business that employs exclusively working moms, you may need to look seriously at whether childcare burdens impact their ability to be successful. If you own a business where a small team requires expensive hardware and computer configurations to do data science for a large customer, they may be unable to do this with their home setup. They may have gotten by in the short-term, but you may need to look at redundant computer systems and more significant hardware expenses to set the team up for an extended lockdown. Your policies must be shaped not just by new norms; they must also align with what you must focus on to sustain your business.
The first step is watching where the crowd is moving. The second step is being honest about whether it is a crowd you can afford to be in or how you afford to ready your business for what’s next.
We spent the first half of the year worrying about the shifts in our business’s revenue sides; it’s now time to take an honest look at the future expense side so we can continue to thrive in this brave new flexible world.