Work from Home vs Office: What are the Financial Implications for Employees?
Reviewed by: Fibe Research Team
- Updated on: 10 Apr 2023
- Published on: 8 Jun 2021
Reviewed by: Fibe Research Team
Compiled by: Alapinee Deshmukh, Human Capital & Sustainability Evangelist.
About Alapinee: A Human Capital & Sustainability Evangelist, she is ER Lead at eCW.
It has been almost a year since the outbreak of the COVID-19 pandemic, and our life still is far from what we used to consider ‘normal’. One of the most significant changes that the pandemic and the consequent lockdown has brought on the entire country is the shift to remote working, also called the work-from-home format, in almost all industries. This is a significant shift that has had an impact on all involved – employers, employees, and the economy at large.
The impact of shifting to a WFH setup has been felt in almost all domains of life. Several individuals were found to have seen a negative change in their mental health or with respect to work environment and collaborations at the workplace or its financial impact on both the employers and the employees.
Specifically from the employer’s perspective, on one hand, the work from home setup is diluting the corporate culture and team building. But on the other hand, there have been several benefits as well. For instance, several employers have benefited financially by cutting down costs on utilities like electricity consumption, travel allowance to employees, etc. In addition to this, with most employees having traveled back to their hometowns, their productivity has considerably improved. Not only do they require lesser holidays, but the overall increase in productivity of the employees also has both efficiency and financial related benefits. While this has been the case, eCW ensures that even while the company is cutting down on costs, they’re not adding to the financial burden of their employees. This is why they offer incentives like internet allowance and free transportation for employees for medical needs. These incentives are provided to all of their employees who are now working from home.
As discussed above, the implications of the work from home setup, mostly due to the COVID-19 pandemic, are manifold – social, physical, mental as well as economic.
Strictly speaking about the financial implications of the WFH setup on the employees, it can be said that it has been a mixed bag. Some of the positive implications upon the employees are listed below:
1.Traveling time and other associated costs have gone down
One of the major components of any employee’s monthly expenditure is traveling. This includes the money spent on fuel, fares for public transport, etc. According to a report by Awfis, An average working professional in India is saving Rs 5,520 per month and 1.47 hours of travel time everyday while working from home. Therefore, a huge chunk of their income and time is saved with the WFH setup.
2.Decrease in childcare expenses
With all schools shifting to an online teaching mode, the WFH setup has been a boon for working parents, especially working women. Having a toddler at home generally makes it very difficult for parents to manage to go to work without using a daycare, which is one of the major reasons for fewer women in the workforce, alongside reducing household income.
With the work-from-home setup, not only will more and more women be able to retain their jobs while taking care of their child, they also are managing to save all the money they would otherwise have spent on sending their child to a creche or hiring a nanny. The WFH setup also allows both parents to spend quality time with their children during their most important years.
3. Increase in productivity
The WFH setup gives more comfort to the employee and coupled with lesser commute hours and travel fatigue, employees are seen to be more productive overall. In fact, the CEO of TCS was reported saying that since 90% of their employees started working from home, they are “seeing increased levels of productivity in certain instances and an increased level of engagement.”
In addition to this, there is a lesser need for taking holidays and hence the overall productivity of the employee increases, which would have a direct effect on the performance-based financial incentives given by the employers, like bonuses.
However, the financial implications have not all been good. There have been some aspects of the WFH setup which have burned a hole in the pockets of employees. Two of the most significant expenses are:
Since all the work is happening through cloud computing and other allied virtual workplaces, there is a constant need for a stable internet and electricity connection. All of these services are, in most cases, being paid for by the employees themselves in the WFH setup. In fact, as many as ¾th of employees believe that they should be compensated for electricity and internet bills while working from home, according to a survey by TravelBank.
For working long hours from home, it is now almost mandatory to have a proper home office setup – with an ergonomic desk, chair, and other such needs. Employees also require a decent pair of noise cancellation headphones and webcam setup for all the virtual team and client meetings as well.
Even though initially people made do with makeshift arrangements for these things, with working from home becoming a permanent feature in a lot of organisations, the ergonomic needs of the employees are the need of the hour. The expenses related to all this also have to be borne by the employee themself.
While working from an office setup or from home comes with their own boons and banes, it is important to recognise that both of them come with a huge cost, pun intended.
Even though work from home is the need of the hour and is also expected as a norm in a lot of industries now, the rise of employee expenses also needs to be taken into account. Coupled with salary cuts due to the economic slowdown as a result of the COVID-19 pandemic, these underlying expenses can be a source of worry for a lot of employees.
