Commentary: Why employers should cover WFH expenses
To attract and retain talent in this post-COVID world of work, employers should seriously consider reimbursing remote workers’ expenses, says PeopleSearch Singapore’s Jaime Lim.
SINGAPORE: From Apr 5, more employees have been able to return to the office as workplaces moved to a more flexible way of working.
Immediately after the easing of restrictions was announced, many expressed concern that this might herald an eventual return to pre-COVID working arrangements.
However, public discourse, several surveys and employers’ actions since then have shown that this is less likely than thought.
Many employers have reportedly continued allowing their employees to work remotely and others have implemented hybrid and flexible work arrangements which allow employees to work remotely for a certain number of days a week.
In a survey released in September 2020 by recruiter RGF International, among 95 per cent of local employers who had flexible work arrangements in place, 61 per cent said they intend to offer such arrangements even beyond the pandemic.
According to a recent Deloitte report, over a multi-year horizon, Singapore could have a potential remote workforce of up to 45 per cent across all sectors.
Reduced real estate, travel and infrastructure costs are the key drivers of this phenomenon.
Considering these cost savings, employers should begin seriously channelling funds to enable their employees to work effectively from home.
Several began doing this soon after work-from-home (WFH) arrangements kicked in around the world.
E-commerce company Shopify, which employs 5,000 people worldwide with the majority of its workforce in Canada, announced in March 2020 that its remote employees would receive US$1,000 to set up their new home office.
Twitter provided its teleworkers the same amount for this purpose in order to make the transition easier.
Since then, various other companies have also announced allowances for phone and internet bills.
Some Singapore companies with whom we work have started at least partially subsidising remote employees’ utility bills and intend to continue doing so.
ARE REIMBURSEMENTS REALLY NECESSARY?
Some might argue that since those who work from home enjoy savings in terms of, for example, commuting costs, employers should not have to reimburse other costs. Surely, employees can channel cost savings in certain areas to cost increases in others, is their rationale.
In addition, in June last year, the Inland Revenue Authority of Singapore announced that workers who incurred WFH expenses last year may claim tax deductions against their employment income in this year’s income tax filing.
This covers expenses such as electricity and telephone bills if they are not reimbursed by employers.
There are limitations though. For instance, those who had already set up Wi-Fi routers prior to working from home will not be able to make claims. Also, one-time charges such as installation or connection fees cannot be claimed, as they are “capital in nature”.
A MATTER OF PRINCIPLE AND PRACTICALITY
Notwithstanding tax deductions and employees’ cost savings on other fronts, companies need to seriously consider this as a matter of not just principle, but also practicality.
If one is to argue that employees are already making cost savings in other areas and therefore do not require additional employer support, then the counter-argument could be that companies are also squaring away further savings through remote working - notably in office rentals, transport allowances and other investments in staff welfare such as pantry supplies and meal vouchers.
Companies should channel these savings to other currently relevant benefits for employees such as Wi-Fi and electricity allowances, so they have everything needed to be productive at home.
Moreover, such a gesture will help build employee morale and send an important signal that the bosses are sincere in making working from home comfortable, feasible and long-term.
Our straw poll of white-collar professionals shows that these are among the top five determinants of a positive employee experience.
While companies have been addressing various other aspects of the employee experience such as more frequent virtual check-ins to engender a sense of belonging and ensure a spirit of collaboration while working remotely, it seems that allowances and reimbursements of WFH expenses could contribute just as much.
In turn, a positive employee experience has the potential to significantly contribute to the bottom line.
An IBM study based on data collected from 45 countries and territories in 2016 and 2017 showed that organisations that score in the top 25 per cent on employee experience report nearly three times the return on assets compared to organisations in the bottom quartile.
Such organisations also report double the return on sales compared to those in the bottom quartile.
SHOULD SUCH PROVISIONS BE ENSHRINED IN LAW?
Last year, a top court in Switzerland decided that companies must contribute to a portion of their employees’ rent if they are working from home. While we may not go down this path in Singapore, there are certainly areas that could do with more clarity, even through legislation.
How much support employers should provide in the context of a post-COVID world is uncharted terrain, so it is no wonder that employers and employees alike have questions and are mulling their options.
For instance, the Singapore Parliament recently clarified that employees are eligible for work injury compensation should they sustain injuries while working from home.
In public forums, some have suggested that other WFH provisions such as reimbursements for equipment and other work-related expenses should be similarly enshrined in law.
BENEFITS IN THE HUNT FOR TALENT
Whether or not they are, employers must realise that doing so has the potential to benefit them in the long-term.
In fact, whether an employer provides such allowances and reimbursements is among the top questions job candidates ask us when presented with employment opportunities that enable them to work from home.
It is not just a “nice-to-have” but an important consideration for them.
They routinely say a company that has such benefits enshrined in their HR policy comes across as being more progressive and interested in its employees’ welfare.
Candidates would easily choose to work for such a company as opposed to one that does not provide such support.
You might think that in a crisis, workers would be less discerning about who they choose to work for.
But this is clearly not the case in many rapidly transforming industries such as digital healthcare and info-communications and technology that are experiencing talent shortages, where top talent can afford to be more discerning.
Especially in an era of prolonged economic uncertainty, making reasonable adjustments to offer relevant employee benefits that serve to enhance their overall experience can boost talent attraction and retention to a meaningful degree for companies’ bottom lines.
Jaime Lim is Group Business Leader of PeopleSearch, an executive search and outplacement services firm with a presence in six cities including Singapore.