How Much Should Businesses Pay in Remote Work Stipend

Thanks to COVID-19, life has changed drastically in these past couple of months, especially for the corporate workforce. With businesses forced to shut down and offices being closed, working from home became the lifeline of many companies during this time.

With no set date on when things will return to normal (if ever), many companies have gone fully remote and chosen to give their employees a home-office stipend and to reduce their downtime. According to a recent AON survey, 1 in 5 companies is contributing to work from home expenses.

Companies like Indeed, Shopify, Webflow, Buffer, Basecamp, and many others pay their employees anywhere from $100 to $1000 in monthly and yearly work-from-home stipends. In May, Google covered up to $1000 for its employees to purchase work from home equipment and invested heavily in updating the Google Workspace system to fill the need of the remote workforce surge.

Should you follow suit?

In this post, we will take a look at the work-from-home stipend, what kinds of costs it might cover, then we’ll give you a few tips for deciding how much to contribute to your own employees’ home office expenses.

What is a Work-from-Home stipend?

Work-from-home stipends are a set of amounts of money distributed to employees to make their remote work situation more comfortable and productive.

Depending on the employees’ needs and the employer’s stipulations, remote work stipends might go to purchasing anything from office supplies to standing desks to offering discounts and coupons to paying for massages.

These sums are generally paid out either at regular intervals (like monthly or quarterly) or as a single payment.

While it may seem counterintuitive to spend more money on employees’ home comforts, a work-from-home stipend makes economic sense even to the most frugal of managers.

Some might claim that businesses are cutting off unnecessary expenses that a workspace would usually require.

When your employees work from home, they may not have access to the supplies or equipment they need to return to the highest engagement and productivity.

Just picture it: someone crouched over their kitchen table at an old laptop with a slow internet connection is likely going to struggle to achieve the same results as they would at an appropriately outfitted office.

When employees are required to work from home, many would argue that covering their home office costs is a fundamental employee right.

This element is even more essential during the pandemic when emotional health is more precarious than ever, and it is increasingly difficult to remain productive.

Giving your employees the resources they need to be comfortable and supported will go a long way towards maintaining a stable, efficient team and cultivating a culture of care and compassion within your brand.

Employers can even include this in their employee onboarding strategy to help their freshest recruits feel welcomed and in an open workspace culture.

What Exactly Are Work from Home Costs?

Working from home has its ups and downs. While the majority of people prefer being home rather than an office space, it can be challenging to get things done when you have to balance work tasks and personal responsibilities all at once.

That’s why many think that having a home office space is essential to a successful work-from-home transition. However, differentiating work-from-home costs from personal ones can get tricky as the two intertwine quite often.

What constitutes a work-from-home cost depends on the employer’s standards, but a good rule of thumb is this: anything that contributes to an employee’s increase of productivity at work can be considered a work-from-home cost.

With that said, we can split remote work costs into three main sections:

  • Essential utilities — Things that cover the basic necessities like a phone, an internet connection, electricity bills, or even a coworking space rental.
  • Office equipment — Home office supplies such as an office desk, an office chair, tech equipment, office supplies, and relevant appliances.
  • Holistic employee wellness — Things that contribute to an employee’s wellbeing and productivity, such as a gym membership, massages, meditation sessions, etc.

According to a US Small Businesses study, 35% of employers provide their remote workers with $500 average stipends, but it remains to be seen if they expand their funds to cover the other areas.

How Much Should You Invest in a Remote Work Stipend?

The amount of money you provide to your employees for their home office should depend on three things: your employees’ needs, the nature of your work, and of course, your budget constraints. At the same, you need to keep a tab of their attendance, shifts, work hours as well.

If you are considering offering a remote work stipend, ask for employee feedback. You can even run a survey through one of the many survey sites and software to get a consensus on the best practices.

Generally speaking, there are two main questions you need to ask: What kinds of items do they need? What kind of payout frequency works best for them?

Think about the nature of your work, as well. If your employees are doing a lot of video conferencing, use coworking space software/app, or have heavy file transfers, fast internet is probably a must.

If your work involves a lot of creativity, you might consider paying for wellness items such as ergonomic office chairs. Prioritize paying for things your employees need to do their job well, and then cover whatever else you can.

If you’re using a CRM solution to help keep things organized, then it’s easier for you to cut out unnecessary things that might’ve been nullified to the pandemic.

Finally, your budget will determine a great deal of how much you can invest in remote stipends for your crew. But keep in mind that with a remote workforce, you’re likely saving the money you would normally spend on heating or A/C, snacks in the kitchen, sanitation, and other basic office maintenance.

Shelling out a few hundred dollars for employee stipends instead may end up saving you money in the long run.

Remote Work Stipends Are Becoming a Necessity

The culture of the work world is changing rapidly as the digital transformation keeps ramping up. The way companies operate keeps changing and evolving, and working-from-home seems to be the next phase.

Brands are outsourcing more than ever and transitioning into using freelancers and virtual assistants and getting creative with office retreat activities. 

Since we have yet to comprehend the full impact of the pandemic on the corporate world and the economy in general, the trend of working from home may be here to stay.

And while It might take us months, possibly years to recover, working from home provides a means for companies to stay in business, which is why it is imperative to start thinking about putting stipend regulations in place.


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