The COVID-19 pandemic has already radically altered the global workforce, putting many laborers out of work, shutting down office spaces and conferences, and shifting many employees to remote work. This is not only compelling employers to rethink the traditional office environment—it’s forcing them to face a new set of financial considerations.
AppZen, an AI platform for finance departments, has been analyzing how COVID-19 affects expenses. As the public health crisis continues to grow, these costs are showing no signs of slowing down. A new report from AppZen examines global expenses, detailing the most critical changes since the outbreak began, and offers suggestions for creating a flexible expense policy at your company.
According to the AppZen blog post, “Work-from-home expenses are increasingly common, and will likely continue to increase over the next few weeks as more companies continue to temporarily close their offices.”
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Here’s how global expenses related to COVID-19 have shifted since the start of the outbreak:
- COVID-19 expenses continue to escalate
After the initial spike in employee expenses, AppZen expected these costs—many due to trip cancellations—to slow down. This is not the case: In fact, from March 7 to 14, expenses related to the pandemic doubled—due mainly to canceled work trips and work-from-home costs.
2. Different industries have different expenses, from mask purchases to travel changes
The vast majority of the COVID-19-related expense claims are due to travel changes—even across industries, it accounts for over 50% of expenses. And for the hotel and entertainment industries, it’s close to 100% of the global expenses. Finance and software industries also are expensing half of the total on remote work. Consumer goods, manufacturing, and pharmaceutical departments are submitting 15% to 20% of their expenses on the purchase of masks.
3. Mask expenses fall while work-from-home expenses rise
As remote workers scramble to set up their home offices, buying printers, ink, headphones, and cables, this category of expenses is the fastest-growing—in the last week alone, it increased 3.5 times. These expenses are critical—not just to keep employees safe, but to ensure that they are comfortable and productive at home.
On the flip side, spending on masks has dropped from its high in mid-February, and as of March 14 made up just a few percentage points of total COVID-19 related expenses.
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This data can help your company figure out the best way to allocate funds, keeping in mind that the situation calls for flexibility. AppZen has compiled best practices to help organizations manage remote work spending policies. Companies may opt to create specific expense categories for COVID-19, to track spending more precisely, or to make room in the budget to hire temporary employees, if needed.