BYOD Reimbursements – Are You Paying Too Much?

By Matt West

Director of Telecommunication Services, NPI

October 23, 2014

Interested in learning more about NPI’s services?

Contact Us

According to a recent report from the Yankee Group, the growth of the BYOD is slowing and may have already peaked. The percentage of enterprises with 1,000+ employees that allow BYOD topped out at 81 percent in Q2 2012 and has steadily declined since.

The economics of BYOD have also shifted since 2012, especially those related to the calculation of stipends – a common method for reimbursing employees for corporate use of their personal devices. Gartner’s research indicates that there are currently no standard practices for BYOD reimbursement. Approximately half of today’s BYOD programs offer some reimbursement for the employee’s service plan, while only 2 percent cover all of the employee’s mobile device costs.

Today, stipends are commonly calculated by offering reimbursement of a certain percentage of the average monthly cost of the employee’s voice/data plan. For example, if the average cost of the device is $90, and the enterprise reimburses the employees for 80 percent of that cost, the employee is paid a stipend of $72 each month.

But, what happens when the average cost of using the personal device goes down? Shouldn’t the stipend also decrease? Pricing competition among wireless competition is fierce, and new plans are being brought to market all of the time. Yet, many enterprises are paying stipends that are based on outdated average device costs.

At the same time, BYOD reimbursements have been under increased scrutiny. The State of California recently issued a court ruling requiring employers to cover a “reasonable” portion of employee’s mobile device usage costs. This is a warning bell for companies that don’t currently offer reimbursements – they may be under pressure to do so in the future.

NPI’s advice is this – if you have a corporate BYOD policy, take time to re-evaluate and realign BYOD stipends based on current wireless pricing trends. In addition to protecting your business from overspending in this area, it will provide an updated view of how BYOD is benefiting your enterprise as the economics evolve.