Inflation Complicates Return to Office Plans – The New York Times


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The cost of a daily routine — travel, coffee, food — is far pricier than it was when offices shut down two years ago.
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As the security software company KnowBe4 weighed whether to require a return to the office, executives knew to anticipate a certain set of concerns from employees. Less flexibility. More time in transit.
Then, in recent months, came a new set of worries about R.T.O.: the rising cost of gas and food, especially near the firm’s headquarters in Clearwater, Fla., one of the areas of the United States hit hardest by inflation.
Workers advised one another on their internal messaging system where to find cheap gas ($3.25!). The company tried to ease the transition by offering free snacks (pickles, Nutella!). But some employees, partly put off by R.T.O. expenses, including dog sitters and child care, told their managers that they preferred to keep working from home. In January, KnowBe4 informed its roughly 1,500 employees that most could stay remote indefinitely.
“If employers are like, ‘Hey, yeah, you need to come into the office, you need to spend this money on gas, you have to eat at the office,’ people are going to go, ‘This is too expensive,’” Erika Lance, the company’s head of human resources, said.
Employers’ plans to return to the office, already strained by concerns about the spread of the coronavirus and the demands of an emboldened work force, are now colliding with the pressures of inflation. The cost of a daily routine — travel, coffee, food — is far pricier than it was when offices shut down two years ago. Consumer prices were 8.5 percent higher last month than they were a year earlier, the fastest 12-month inflation rate since 1981. While office occupancy has crept up to its highest level since March 2020, above 40 percent, some workers have experienced R.T.O. sticker shock.
“It’s a perfect storm,” said Becky Frankiewicz, U.S. president of ManpowerGroup, a global staffing agency with more than 4,500 offices. “We’re ready to get back to work, and now can you afford to get back to work?”
Average gas prices in the United States hit $4.33 a gallon last month, compared with around $2.60 in 2019, according to AAA. The Sweetgreen salad that now costs $11.95 might have been $11.20 last year. A Potbelly sandwich for $7.65 was once $7.20. An iced latte at Dunkin’ might be $3.99, up from roughly $3.70. And with the labor market still tight, employers are fielding calls from workers asking for more flexibility or raises.
The talent shortage has boosted pay, but not enough to keep pace with inflation; wages grew 5.6 percent in the last year. Some employers said they were planning to give raises, recognizing that their workers could easily be poached. OrderMyGear, for example, an e-commerce platform based in Dallas, another city hit hard by inflation, recently tripled the budget it had allocated for compensation increases in previous years. Other businesses said they had not yet adjusted wages as they waited to see whether inflation cooled.
But for those companies asking their staff to give up the flexibility of remote work, the pressure to raise wages has grown.
“Remote work started off as a safety measure,” Ms. Frankiewicz said. “Now it’s a cost-containment measure.”
She noted that some workers her company had placed were now seeking short commute times to manage costs, and some companies were offering gas cards, transportation vouchers or ride-share options. ManpowerGroup has received five times as many comments from workers saying rising costs were affecting where and whether they worked as it did in the same period last year.
“It was: ‘I don’t want to make the commute,’” Ms. Frankiewicz continued. “Now it’s: ‘I can’t afford the commute.’”
Edith Jacobson, 29, a designer who commutes three days a week to Washington from Baltimore, used to be able to fill the tank of her 2006 Subaru for roughly $45. Now she pays nearly $70. When she takes the train, her employer often covers the cost of her ticket, but that means a commute of one and a half hours, with a 6 a.m. wake-up. Then there’s the impossibility of finding affordable lunches in Washington. She used to budget $10 for lunch; now she allots $15.
On a recent Thursday afternoon, leaving her Dupont Circle office in search of a sandwich, Ms. Jacobson tried to quiet her nerves as she prepared to ask her boss for a raise.
Four hours later she received good news — a $4,000 salary bump. “I just walked away feeling appreciated,” she said. “It sounds like something small, but for me it’s something huge.”
A recent analysis from Square, the technology company, quantified the “lunchflation” that workers like Ms. Jacobson were facing. The average price of wraps last month was up 18 percent from a year earlier, with sandwiches up 14 percent and salads up 11 percent. At the same time, fast-casual restaurants are drawing more lunchtime customers as offices fill back up. Orders placed at quick-service restaurants in the United States from mid-March to mid-April rose nearly 13 percent from a year earlier, according to the analysis.
Companies are trying to head off the clashing forces of inflation and return-to-office expenses with attempts to make transportation and food more affordable. The Bureau of Labor Statistics noted in its recent Consumer Price Index that the price of food at workplaces had declined even as broader meal prices went up, most likely a sign of companies’ “widespread free lunch programs.”
Take OrderMyGear, in Dallas, which recently told its 165 employees that by June many would be expected to begin coming into the office, at least part time. Jaclyn Unruh, the chief of staff, reminded employees that the company offered free passes for public transportation, which about 10 percent of them use, as well as free parking, and meals two or three times per week.
In other workplaces, inflation has become a factor that reduces the R.T.O. appeal. Cambium Learning Group, an education technology company based in Dallas, told its 2,300 employees in December that most would have the option to stay remote, but it reopened the office in January for those who wanted to use it.
“My food bill is really different from not going into the office, not grabbing coffee,” said Melissa Yates May, Cambium Learning Group’s head of human resources. “It’s helped a lot of employees manage their finances better.”
The company has not yet increased wages to the rise in consumer prices. “We’re waiting a little bit to see where it normalizes before we make those types of adjustments,” Ms. Yates May said, noting that the company uses market data to ensure its wages are competitive.
Still, many managers making decisions on return-to-office plans aren’t immune to the stress of rising prices. And they know that employees who are paid less than them are even more likely to feel pain at the pump or coffee shop.
Chris Harris, 53, who manages a team at an advertising company in Portland, Ore., that has encouraged but not required a return to the workplace, assures members of her staff that she understands their angst about the expenses of an office routine. Recently, she stepped outside for lunch and paid $12.50 for a brewery pretzel. She grimaced as she recalled pre-Covid lunches, when she could spend $5 at a discounted cafeteria that shut down during the pandemic.
At a recent work function, Ms. Harris found herself fielding complaints from a colleague about the daily cost of R.T.O.: “He was like, ‘Gosh, between parking, my gas and lunch, I’m paying $70 to go to work,’” she recalled. “It adds up when you’ve been saving that for two years.”
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