It doesn’t come as a surprise that employers want us to get back to offices and fill our business hubs again. Without daily commuting, grabbing a coffee at a nearby café, and dining al desko, businesses of all kinds and sizes are bearing hefty financial losses. But here’s the problem: employees who didn’t have to budget for day-to-day activities like travel, food, and coffee for over two years are now witnessing price hikes of more than 20% and analyzing how much it costs to spend a single day at the workplace. And, worse, these costs are continuing to rise.
On one hand, where companies are considering a return to work, employees, on the other, are weighing issues attached to it: from reduced flexibility to rising fuel costs, and drastic weather conditions to the potential spread of new variants of the virus. Interestingly, a survey conducted by Owl Labs found that remote employees were 22% happier than those working in an office environment. The same survey also reported that 59% of respondents said they are more likely to choose an employer who facilitates remote work as compared to those who didn’t.
So, are rising costs driving employees to take a back seat? If so, let’s understand how much it would cost employees to return to the office and whether they perceive that expense ‘worth it’.
Now that the markets have opened up, home prices are rising, mortgage rates are overheated, and rents are at an all-time high, not just in the suburbs but in the exurbs, too. Those who have to return to the office or even work in a hybrid model have no option but to find accommodation close to their workplace and bear the sky-high cost of living. Alternatively, some employees may also have to consider housing in the exurbs of the city to cut their expenses, meaning they would face a two-hour – or even more – commute each way. Add to it the rise in utility bills, property tax, and maintenance costs that workers will have to incur as a cause of return to work.
Indians spend more than 2 hours on the road every day, as per a report by office commute platform MoveInSync. Commuting to work is not only limited to incurring a time cost, but a financial cost as well. Fuel prices are at their very peak and public transport fares have increased, too. The average petrol and diesel prices in the country’s capital, Delhi, hit Rs. 96.72 and 89.62 a litre as compared to Rs. 72.9 and Rs. 66.4 in 2019. Auto fares that costed Rs. 18 per 1.5 km pre-pandemic have increased to Rs. 21, effective 2022. Leading cab aggregator, Uber, too has raised trip fares by 12% in Delhi-NCR and Kolkata, 15% in Hyderabad and Mumbai. Ola has also increased its fare rates by 16% in major cities for its mini and prime cabs. Keep in mind these numbers don’t include car payments, insurance, and maintenance. And if employees take public transportation, they still need to bear the cost of bus or train fares and two-wheeler maintenance costs, which they saved up on while working from home due to COVID-19 restrictions. The challenge is that they likely won’t be returning with the same regularity as physical workplace visits begin.
Employees returning to work are experiencing something that is now termed “lunchflation”, and the numbers speak for themselves. Food prices have leaped 75% since mid-2020, the Food and Agriculture Organization (FAO) stated. This spike in prices has brought about a major shift in the lifestyle of many. Some are cutting back on junk food and instead spending on fruits and vegetables, while some are dipping into their savings for after-work leisure with colleagues. Restaurant menu prices, for instance, have seen a 20% to 30% hike. These price hikes have triggered a breakpoint for those at the receiving end.
Deadlines and responsibilities at work are the biggest cause of your daily stress. This means, you will spend an equal amount of time de-stressing or indulging in entertainment activities like going to movies, shopping, sports, or travel, which comes at a hefty cost. Cinema ticket rates that once cost Rs. 200 have now more than doubled. Global flight bookings, too, have soared 25% above pre-pandemic levels in 2019. Not to forget, your health is also impacted when you work for long hours, travel in a polluted city, or work in an unhealthy environment. This automatically reduces your life quality, life span, and wellness, thereby increasing your health costs. To defray this expense, negotiate health insurance compensation and off-site team activities when you are changing jobs or with your current employer.
The highly-anticipated return to the workplace that many have keenly awaited is going to be a lot more challenging than what was expected. Some may be excited about returning to a “normal-looking” work environment and wearing “real” clothes, but some employees might be disproportionately affected by the expenses and changes in schedules. Even for those drawing the highest salary they can get, budgeting and making safe investments is more important than ever before. With costs going up and a recession looming in the ongoing year, the salaried class, particularly, needs to find the best investment options and manage wealth effectively.
Leverage professional guidance from the finance experts at Dezerv and safeguard your future!