Across the United States, office doors are swinging back open at companies like Facebook, Microsoft, and Goldman Sachs.
Break rooms buzz, water coolers hum, and lifeless office plants are swapped for fresh greenery without skipping a beat. Some workers dread the return; others look forward to it.
Either way, shifts in their routine bring big changes to employees’ financial lives.
When many organizations went fully remote in spring 2020, workers quickly had to balance their budget to work from home. Now that they are asked to go back on-site, it’s time for another overhaul.
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Six key financial factors that impact an employee’s financial situation when returning to the office
Here are the 6 key financial factors that impact an employee’s financial situation when returning to the office, part or full time.
Employer tip: Your return to the office is a window of opportunity to engage employees in positive financial behaviors. Offer a holistic financial wellbeing benefit to support this important transition.
Sweeping salary adjustments could soon impact workers’ cashflows in a major way. According to Business Insider, employers such as VMware and Facebook will be adjusting pay for workers who leave their headquarters in the Bay Area or Silicon Valley.
For example, a VMware employee who moves to Austin might get an 18% salary reduction, and a team member moving to San Diego could have their pay cut by 8%.
Employees could also choose to move to a higher-paying city. For example, a worker that moves from the midwest to Washington DC could see an average base pay increase of 10% due to significantly stronger outside offers and differences in urban productivity.
If big payscale adjustments are on the table, encourage team members to speak to a trusted Certified Financial Planner™ professional through your financial wellbeing program. It could be the difference between struggling or thriving with their new salary.
Childcare is one of the biggest monthly expenses that working families endure.
CNBC reports that the average American family spends $750 per month during the school year and $834 per month in the summer for childcare. Even for families that will continue to WFH part or full time, many are expected to have arrangements for their children during the work day.
Encourage employees to learn about and utilize a Dependent Care FSA (DCFSA) plan. This pre-tax benefit account can be used to pay for eligible dependent care services, such as preschool, summer day camp, before or after school programs, and child or adult daycare.
Employer tip: Look for a financial wellbeing benefit that offers custom lessons around your unique employee benefits. Interactive budgeting tools can also help employees understand the value of their pre-tax contributions.
Another big expense that will be back on the books as employees return to the office? Commuting costs.
According to the U.S. Census Bureau, the average American commutes 26.1 minutes each way to work, spending anywhere from $2,000 to $5,000 per year on commuting expenses. Slashing this cost from the budget might have been a welcome break over the past 18 months. With offices opening back up, commuting costs should be thoughtfully considered and added back into cash flow calculations.
To support employees in their return to the office, many employers are offering a commuting stipend or work-from-home stipend, depending on where employees choose to work.
One of the biggest hidden (or not-so-hidden) costs of professional work is the wardrobe required. Employees in law, finance, or big firm accounting/consulting professions often have the most expensive work wardrobe. Costs incurred include the expense of new items of clothing plus maintenance such as dry cleaning. After a year and a half of comfortable WFH wear, adding clothing costs back into the budget could come as a shock to many employees.
Heading back to the office could have a positive impact on employee’s utility budgets. When one or multiple family members are home 24/7, heating and cooling expenses can add up. Working from home can also spike water, electricity, and gas bills.
On average, remote workers saw a $40-50 monthly increase in their energy costs,— or as much as $600 a year. If they are back in the office, these expenses can be budgeted elsewhere.
Food and beverage budgets
Many employees became home chefs during the pandemic, cooking 3+ meals per day in their own kitchen. Their monthly household grocery bill may have seen a sharp increase of +$100 per month or more.
On the flip side, routine food and beverage expenses at coffee shops and cafes sharply decreased. As workers head back on-site, they could notice a drastic shift in expenses in these categories. Morning breakfast at home might switch to a breakfast sandwich on the go. Coffee from their Keurig could go back to that $4 latte.
What might seem like a small increase of $15 a day for food and drinks during the workday can quickly add up to $75 per week, or $300 per month. This shift in spending is important to plan for to keep employee’s cash flow.
Shifts in cash flow like these could make or break employees’ budgets. Think of your return to the office as a window of opportunity to engage employees in positive financial behaviors.
By offering a financial wellbeing program with access to Certified Financial Planner™ professionals, your workforce will feel supported and financially strong. Ready to learn more? Use the form below to reach out to our team.