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Paying To Work? Gephardt Breaks Down Hidden Costs of Working From Home

WEST JORDAN, Utah – Jody Ware has been earning his paycheck from inside his West Jordan home since the pandemic began.

“I’ve been wanting to do it for years, so this is like a dream come true,” said Ware.

His bosses sent him home with a laptop, extra monitor and other equipment he needed to do his job. The company even kicked in a little extra cash.

“They give us a little bit of an allowance for the internet because it has to be at a certain rate,” said Ware.

His biggest expense so far has been a $100 office chair. He believes that has been more than offset by the added convenience.

“I don’t have the commute anymore. I’m saving a whole bunch of money on fuel,” said Ware. “Even groceries have been cheaper.”

The Hidden Costs

Working from home has been a win for many, but the KSL Investigators found it’s kicking other workers right in their wallet. One survey found four out of 10 remote workers spent between $100 and $500 on their home office during the pandemic, and 12% said they spent over $1,000.

It’s not just the furnishings. Space is also an issue. The National Bureau of Economic Research found renters working from home spend 6.5% to 7.4% more on housing because of the need for more office space. For homeowners, that number is between 8.4% and 9.8%.

Experts said the real expenses can be harder to calculate. Even if you already had a home with room for an office, now your company gets the use of that workspace rent-free. Does your company provide a monthly stipend to cover your internet and data plan? If not, that expense now falls solely on you. Being home all day likely means your utility bills have gone up. Researchers estimated energy expenses climbed $40 to $50 a month for the average remote worker last summer.

Don’t forget the lost perks: no more unlimited snacks or free gym at the office.

Financial Savings For Employers

At the same time, many companies are saving money.

CHG Healthcare is one of them. Jeff Freeman, CHG’s senior vice president of Culture and Engagement, told the KSL Investigators his company has provided things like computers, chairs, and most other physical amenities workers would have if they were in the building. CHG is seeing big savings in everything from office supplies and utilities, to cleaning services and food.

“We have a full kitchen that has not been in operation for the past 14 months,” said Freeman. “We’ve not had to heat or clean other floors.”

Hands down, the biggest savings has been construction. CHG was planning to expand its Midvale headquarters, adding a third building to help house all the on-site employees.

“We put that on hold at the onset of the pandemic,” said Freeman. Now he wonders if they will ever start that project.

Before the pandemic, the company allowed about 150 people company-wide to work from home. After sending nearly 3,000 staffers home and seeing their business thrive, CHG said about half of those workers don’t really want to return to the office, at least not full-time, and will now split time between the office and home.

Freeman said the money saved will be reinvested in their employees – paying for new remote technology, training, and collaborative space redesign.

“We know that this model is here to stay,” said Freeman. “You have to invest in resources, into helping them have the experience that you want them to have, or they deserve to have.”

Shifting Leverage

University of Utah David Eccles School of Business professor Glen Kreiner has studied work from home costs since long before the pandemic. He said a permanent widescale shift to work-from-home gives workers leverage.

“There’s a difference between trying this at-home work for a few months or a year, versus doing it for your whole career,” said Kreiner. “There’s a difference between, ‘Here’s something I want and I’m willing to incur the cost,’ versus something that’s being forced on me.”

Another potential cost of working from home: job advancement. In a pre-COVID-19 study, researchers at Stanford University found working from home lowered promotion rates by 50%. Workers feared they were passed over because they were not in the office.

Kreiner said managers must get past that bias by developing criteria to evaluate remote workers: What’s the quality of the work? Is it on time? Are they mentoring peers while at home?

“Figure out what those important criteria are rather than that sort of gut check of, ‘I know these folks because they’re around me all the time,’” he said.

Whether it is lost opportunities for advancement or more tangible costs, Kreiner said now is the time for companies and their workers to talk about which expenses have shifted.

“This is something that hasn’t been on the radar, pre-pandemic,” he said.

If the costs of working from home have added up, tell your boss. Do not assume they know. While making your case for why it’s in your employer’s best interest to help you with those costs, be honest about the benefits as well, like saving a ton on gas money.

“It’s a negotiation that should be occurring,” said Kreiner. “Whether it’s negotiating a new job or sitting down with their current manager and saying, ‘Look, here are the actual costs that I’m incurring from working from home. Which of these seem appropriate for the company to be reimbursing me for?’”

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