Despite a few exceptions, organisations see the benefits of moving to blended working patterns in the post-pandemic world. But what if employees’ home setup is not ideal? Eddie Flanagan and Grace Strawford look at some options for offering home office loans.
With hybrid working hailed as the next natural step in the office worker’s journey, it’s now more important than ever that people have a well-equipped home office setup.
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Although the rise of hybrid and remote working has received a positive reception overall thanks to the flexibility it offers, it has left some people working in less-than-ideal circumstances.
Not every individual has the financial means to upgrade their home working situation, and as employers have a duty of care towards their staff, it’s important that they offer advice and support where they can. As a result, businesses should review how they can create the best working conditions for employees as we move towards a more hybrid future.
Safe and productive
There are a number of options available for employers looking to provide a safe and productive workplace for their employees.
One of these is the introduction of an interest-free home workspace loan as an employee benefit. Businesses can offer these loans to financially support employees with anything from a new desk and chair to a garage remodel, helping to make remote working conditions more comfortable.
In general, businesses should carefully consider how to approach the perk in a fair and inclusive way, ensuring workers are given the opportunity to make as many changes as needed for them to effectively work remotely.
The terms of home workspace loans, such as amounts, timeframes and eligibility, are at the organisation’s discretion, so these can be tailored to suit both employers and employees.
For example, businesses could offer the loan only to employees who have passed their probation period or who have completed a year of employment at the company. Employers should also determine how the loan should be repaid, such as by a direct debit or from a monthly salary deduction.
Type of loan
One thing to bear in mind is that this type of loan is and should be made different to those offered by banks and other loan providers.
As it’s not a regulated credit agreement and doesn’t fall under the Financial Services and Markets Act 2000 and isn’t regulated by the Financial Conduct Authority (FCA), offering the loan as an employee perk means the business can avoid certain levels of bureaucracy.
However, there are strict rules which have to be followed to ensure that the offering of the loan is not deemed a regulated activity, and therefore classed under the FCA regime. If these rules aren’t adhered to, the loan scheme will require authorisation.
The first major difference between the loan scheme and a traditional high-street loan must be in the structure of the loan.
This type of incentive requires the agreement to be between a borrower and a lender alone. For example, if the employee would like to use the loan to remodel a room, the employer can’t get involved with the contractors that the employee chooses to use.
Another major aspect to consider is the interest rate, as well as any charges on the loan. In most cases, it’s advisable that businesses offer interest free loans, this shows a high level of employer engagement in employee well being. This means that the terms are more beneficial to the borrower than the lender.
For companies wishing to help their workforce, providing smaller loans for a new chair or desk or offering to purchase some furnishings outright can be a good solution
The agreement also cannot be a ‘restricted use credit’ and employees should be free to use the money how they see fit within the purpose of the loan. As long as they are using it to make their homeworking environment more suitable, the employer cannot interfere.
Clear communication
When marketing the loan to the workforce, businesses should be careful as to how it is communicated.
The information should be transparent and not misleading, with the terms of the loan and the expectations of both the employee and the employer clearly laid out. Before signing, workers should ensure they understand the risks and the costs of the agreement.
Although the loan is an effective way of supporting staff during the transition to hybrid working, it won’t be the right fit for every business. For example, smaller businesses may not have the financial capacity to offer the loan to every employee.
However, for companies still wishing to help their workforce, providing smaller loans for a new chair or desk or offering to purchase some furnishings outright can be a good solution to boost employee wellbeing.
Remote ways of working have brought a variety of positives, creating a better work-life balance for employees, while also giving employers the ability to take advantage of improved productivity and even reduce their carbon footprint.
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However, some may have struggled with the transition due to unsuitable working arrangements. By offering home workspace loans, employers can step in and provide their teams with the comfort they need to do their best work.
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