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Mobile phone stipends have become increasingly common in recent years as corporate and public sector organizations have adopted Bring Your Own Device (BYOD) policies. Today, according to a recent survey by Oxford Economics, the vast majority of organizations with BYOD policies provide mobile reimbursements to employees, with most paying between $30 and $50 per month.
Organizations wanting to gain a fuller understanding of average business expenditures for mobile stipends, as well as device purchases, carrier connectivity fees, mobile management overheads and Mobile Device Management (MDM) software, can use this mobile cost calculator to obtain a detailed analysis.
What is a mobile stipend?
Mobile stipends are payments made to employees to compensate them for the use of their personal mobile phone for work purposes. In some cases, the organization may provide compensation for the employee’s purchase of a new smartphone itself, but in most instances, the stipends are monthly payments that are intended to cover some or all of the user’s cellular service plan. Compensation may be made through a payroll stipend, or through a telecom expensing system.
Do most companies provide a mobile stipend to employees?
According to the same Oxford Economics survey, conducted in early 2018, 89 percent of organizations provide a full or partial stipend to compensate BYOD employees for their mobile phone expenses. The percentage of companies providing stipends was up from 75 percent two years earlier, indicating that companies increasingly view mobile devices as essential business tools.
In the survey of senior IT and business leaders, 31 percent said they provide a “full connectivity stipend,” while 58 percent offered a partial reimbursement for their employees’ device purchase and mobile services costs.
What is the average mobile stipend provided to employees?
Businesses and public sector organizations that provide mobile phone stipends for BYOD employees pay $36.13 per month on average, according to the Oxford Economics survey. This amounts to about $430 per year for each employee.
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While some organizations — especially smaller companies — provide stipends of less than $30 per month, more than two-thirds have opted for monthly reimbursements between $31 and $50.
How should you determine the amount of your mobile stipend?
In determining whether and how much to provide to BYOD employees as a mobile stipend, IT and business leaders should take a realistic look at their organization’s expectations around mobile usage. In the Oxford Economics survey, nearly 80 percent of respondents said employees cannot do their jobs effectively without a mobile phone, while three-quarters said mobile devices are essential to workflows.
If your organization views mobile devices as essential work tools and expects BYOD employees to be able to access work remotely from their personal device, that’s a good sign that you should be providing a stipend. Also, if you require BYOD employees to run an MDM client on their personal phone to enforce security protections, you should also strongly consider providing some form of compensation.
Time to Reconsider BYOD?
In instances where a mobile phone is essential to employees daily work, it may be more beneficial from both a cost and productivity standpoint to provide a corporate-owned smartphone, instead of opting for BYOD and a stipend. The Oxford Economics’ study found that organizations who provide phones to more than 20 percent of employees report seeing the greatest benefit from mobile in terms of workforce collaboration, information access and general productivity.
BYOD policies also typically mean less control of the device, as a heavy-handed MDM implementation on a personal smartphone won’t go down well with users. At the same time, BYOD generally entails managing a more diverse fleet of devices — with many different models and operating systems — which add complexity for IT admins.
Mobile stipends for BYOD employees represent a significant investment. A mid-sized enterprise with 5,000 employees, for example, would spend on average $2.17 million on stipends over the course of a year. Before committing to mobile stipends, take a holistic look at your mobile strategy, considering not just the costs, but the business value that you are able to derive.