One of the most often cited benefits of working from home, for the employer at least, is reduced overheads. While that’s certainly true for office utilities, organizational telecommunications tend to be slightly more complex. If you’re not careful, during widespread and prolonged periods of remote working, costs can quickly spiral out of control.
One of the main culprits is bring your own network (BYON) expenses. Reimbursing employees for network costs, paying for expensive VPN services, taxes – BYON costs account for a surprisingly large section of your telecoms bill.
We’ve experienced this ourselves in recent months in the wake of COVID-19. So, in this article, we highlight some of the most common costs associated with BYON and the steps you can take to manage them.
What is BYON?
Bring your own network (BYON) is the process by which employees use their domestic broadband services to facilitate and support workplace activities when working from home.
Due to the ongoing COVID-19 pandemic, a significant percentage of the world's population has been forced to work remotely – and will continue to do so for the foreseeable future. As things stand, three-quarters of Americans are currently subject to state or local stay-at-home mandates. BYON costs have increased substantially as a result.
However, even before the COVID-19 pandemic hit the headlines, the concept of remote working has been steadily gathering momentum over the past few years, driven by our need for a better work-life balance. The US alone has seen a 44% increase in the number of remote workers during the past five years, with as many as 4.7 million Americans working from home on a regular basis.
It’s almost certain this figure will continue to grow throughout the 2020s and that in itself will have a sizeable impact on telecom expenses at the enterprise level.
Common BYON Challenges and How to Overcome Them
To Reimburse or Not to Reimburse?
In California, employers are legally obliged to cover any network costs accrued by remote workers as per Section 2802 of the California Labor Code. It stands to reason: why should employees pay an increased premium on their broadband when the bulk of their internet usage is work-related?
For employers operating within California, this represents a substantial increase in network costs which must be taken into account when establishing a BYON policy.
Of course, this is by no means a universal standard at present. Outside of California, employers are free to offer full or partial reimbursements as they see fit; assuming they agree to provide some form of remuneration in the first place.
Nevertheless, as remote working becomes ever more commonplace, employers will find themselves under greater pressure to cover network costs. If they don’t, they run the risk of a frustrated and dissatisfied workforce.
Visibility and Consistency
For the majority of employees who receive some form of remuneration to help cover their network expenses when working remotely, claims are made through standard expense reporting systems.
The problem with this approach is that these inevitably end up being put through as standard business expenses. This makes it difficult to discern which charges are specifically related to telecoms and which aren’t and paints an inaccurate picture of your network finances. The result is reduced visibility and difficulties identifying unnecessary costs.
To make matters worse, the level of reimbursement for network expenses can differ wildly between divisions and even individual managers. Those in the accounting department may be entitled to a $50 stipend, while those in customer support receive half that amount.
The solution is to adopt an automated system that takes a role-based approach to telecom expense management. Not only does this provide greater visibility into your BYON expenses, it ensures consistency across your organization.
Tax
Generally speaking, US employers don’t pay income tax on reimbursements for remote workers. That extends to home internet costs, too, so long as it can be proved that these are genuine business expenses. Other countries take a different approach, however.
In the UK, for example, Section 316A of HMRC’s Employment Income Manual stipulates that tax must be paid on network reimbursements if the residence in question has an existing internet connection. The only circumstances under which the employer doesn’t pay tax is if an employee doesn’t have broadband access before they begin working from home. But this is seldom the case.
If you’re responsible for a large workforce and operate in a country where tax is charged on home internet reimbursements, you must factor this into your wider telecom spend as this could have a huge impact on your budget.
That being the case, it’s essential your finance department has complete visibility into network expenses, and reports can be submitted to your payroll department quickly and easily.
VPN Connection Costs
A key concern for organizations that support remote working is network security.
Away from the office, employees rely on their home internet and – in situations where their employer is unable to supply a work laptop – their existing anti-virus software to ward off potential security threats. This is far from ideal at the enterprise level, where a data breach can compromise significant volumes of potentially sensitive client information.
The alternative is to set up a secure, virtual private network (VPN) which individual workers can log into remotely.
There are numerous VPN solutions on the market. These range from basic free solutions, to high-end premium services that offer the maximum level of protection and data security. Of the latter end of the scale, one of the most popular, ExpressVPN, is priced at approximately $8.00 per month. That might not seem like much in the grand scheme of things but bear in mind that this only covers a maximum of five devices; additional users require additional licences.
Given the pricing structure, costs can quickly mount up. And, when they do, it’s crucial your VPN expenses are correctly allocated to the employee’s cost center. This allows you to retain visibility, track costs, and manage finances across your organization.
Staying Ahead of the Curve
Whether you’re instituting a widespread working from home policy in response to a global crisis or shifting to a more flexible rota to meet current employee sensibilities, you must have a clear picture of your BYON costs and how they fit into your wider telecom expenses.
A reliable TEM provider will prove an invaluable resource in this regard.
The ideal provider will help you embrace the remote working revolution, without fear of the challenges and costs associated with moving to a more flexible style of working. This will give you an edge over those of your competitors who are slower to adapt to the changing professional landscape and ensure you stay on top of your organizational finances.
