With inflation, US workers going back to office face shock of higher prices

NEW YORK (NYTIMES) - As security software company KnowBe4 weighed whether to require a return to the office (RTO), 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 RTO: the rising cost of petrol and food, especially near the firm's headquarters in Clearwater, Florida, 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 petrol. The company tried to ease the transition by offering free snacks. But some employees, partly put off by RTO expenses, including dog sitters and childcare, 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'," said Ms Erika Lance, the company's head of human resources.

Employers' plans to return to the office, already strained by concerns about the spread of Covid-19 and the demands of an emboldened workforce, 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 per cent higher last month than they were a year earlier, the fastest 12-month inflation rate since 1981.

"It's a perfect storm," said Ms Becky Frankiewicz, US 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 petrol prices in the United States hit US$4.33 a gallon (S$5.95 for 4.5 litres) last month, compared with around US$2.60 in 2019, according to AAA. The Sweetgreen salad that now costs US$11.95 might have been US$11.20 last year. A Potbelly sandwich for US$7.65 was once US$7.20. An iced latte at Dunkin' might be US$3.99, up from roughly US$3.70. And with the labour 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 per cent in the last year.

Some employers said they were planning to give raises, recognising that their workers could easily be poached. 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 petrol cards, transport 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 is 'I can't afford the commute'."

Companies are trying to head off the clashing forces of inflation and return-to-office expenses with attempts to make transport and food more affordable. The Bureau of Labour 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 programmes".

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. Ms Jaclyn Unruh, the chief of staff, reminded employees that the company offered free passes for public transport, which about 10 per cent of them use, as well as free parking, and meals two or three times per week.

Many managers making decisions on return-to-office plans are not 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.

Ms Chris Harris, 53, who manages a team at an advertising company in Portland, Oregon, 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 US$12.50 for a brewery pretzel. She grimaced as she recalled pre-Covid-19 lunches, when she could spend US$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 RTO. "He was, like, 'Gosh, between parking, my gas and lunch, I'm paying US$70 to go to work'," she recalled. "It adds up when you've been saving that for two years."