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How to use stipends to ensure BYOD success

Josh Bouk, VP of Sales and Marketing, Cass Information Systems, Expense Management Division | Sept. 18, 2015
There are real differences between stipend options, and the success of your program will depend on getting them right

Stipends are a way for businesses to reimburse employees for a portion of their wireless costs and, if implemented properly, address these common issues: cost, eligibility, control and taxes. Here’s how:

* Costs. When businesses talk about costs, they generally are referring to either time or money. And companies opting to use expense reports for stipends will find the task occupies a good bit of both. It’s time-consuming for accounting departments to sort through individual expense reports and issue payments only after an employee’s usage has been verified. It’s no surprise, then, that an Aberdeen Group study suggests each expense report costs $18 to process. Compounding those costs, companies opting for this method will issue hundreds or even thousands of payments each month, so the benefits that attend stipends can be quickly outweighed.

More recently, a few carriers have started to offer a split-billing solution. Split billing attempts to categorize employee usage as either personal or work-related and, in turn, solves some of the issues that expense reports present. For starters, companies could avoid the need to process individual expense reports, as employees’ bills would obviate the need. Unfortunately, though, these split-billing solutions are only partial solutions, as they typically do not account for the voice portion of an employee’s bill. An even larger concern, however, is that split-billing forces employees to align with one carrier, a concept that is at odds with the heart of BYOD: autonomy.

A less discussed but potentially more complete stipend solution is referred to as direct-to-carrier credits. In fact, Gartner has called this process the most effective method for managing BYOD expenses. Simply put, companies determine payment levels based on employee role or any other relevant factor, and then have the stipends applied directly to employees’ bills as a credit.

This solution is typically tied into software that encourages employees to comply with mobile policies and alerts the employer and BYOD solution provider when a device is out of compliance. Plus, by integrating with HR Information Systems, the solution alerts the vendor when an employee’s role or status has changed within the organization.

* Determining Eligibility. Regardless of the stipend approach used, companies must determine which employees are eligible to participate, and many base the decision on roles. For example, an organization may decide to exclude hourly employees from its stipend program. That doesn’t necessarily mean those employees can’t access the network; it simply means they bear the entire costs themselves. If utilizing direct-to-carrier credits, companies may place eligible employees into one of three or more categories. An employee who rarely needs to be contacted outside the office might receive a $35 stipend each month. A salesperson, on the other hand, might receive twice that amount due to the demands of the position. In any event, employees would be assigned a tier by managers and then enroll in the BYOD program over a web portal.

 

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