Individual Liable versus Corporate Liable Phones, You Need To Consider These Six Facts.

Posted by Benny on Feb 3rd, 2010 | no comments home title

Not too long ago I was asked about the pro and cons between corporate liable and individual liable wireless phones and what is the best way for a company to go. Mostly, I get this question because it is a way for a company to control costs and reduce the need to deal with their cell phone carrier(s). By providing a flat reimbursement for any employee needing a mobile device, individual liable would seem to be the logical method and employees who typically have a cell phone already get money now. You know your exact costs that will show up on the general ledger every single month. But as a word of caution, we recommend you consider some other reasons NOT to use this method as it may end up costing your company more in the long run.

1. Missing out on discounts. When you pool your company’s total spend are you missing out on the newer discounted rate structures that the cellcos are throwing out nowadays? We’ve seen some dramatic discounts and additionally your company may be able to access added rate cuts by associations or rate plans that are available to your company. In some cases, we have seen that while the company was reimbursing their employees a flat dollar amount each month, if they had pooled their plan together, it would have been less costly to take advantage of a group plan that they qualified for.

2. Employees not getting a phone at all. In some cases, we’re actually seeing that some employees are either just pocketing the money and not getting a phone at all or trying to keep the spend below the reimbursed amount. In one extreme case the employee was trying to “game the system” by checking out a company-owned phone and still getting the reimbursement. Sometimes, employees are simply just not willing to actually use their phones because even though they are being reimbursed, the belief is that they are still paying for the phone and look to “profit” from the reimbursement, rather that view it as a business tool.

3. Security and liability. Phones have essentially turned into miniature versions of our desktop and laptop computers. Employees can easily access their email, applications and sensitive corporate information from their phones. With individual liable phones, regardless of what you put on paper, it is nearly impossible to standardize on handsets, carriers or implement restrictions on those phones. In one case, an employee actually gave a child their cell phone because his daughter was going to camp, and when it was critical that that employee be contacted due to an emergency, they couldn’t find him. Additionally today, many companies don’t consider that applications on smartphones can be downloaded just like software on your computers can contain viruses, trojans and worms that could potentially be a security breach for your companies “secure” data and make government compliance a headache.

4. The prepaid and/or restricted access phone. Depending on your employee and their personal view on the mobile phone reimbursement, they may opt for a phone with severe restrictions or be prepaid. Restricted phone can mean limited network availability, inability to make or receive text messages, poor network coverage when you need to access your employees. In the case of the prepaid phone, if your employee really needs to get in touch with you, or vice versa, and they’re run out of minutes – what do you do? Employees don’t necessarily view the best interests of the company when it comes to wireless liability.

5. Employee satisfaction and their viewpoint. In one case an employee pulled me aside to ask if their company was going through a tough financial crisis and if they were going to be okay. I was puzzled because he was asking me such a question, I ask him why he thought that. “Because they have been trying to reduce costs and when they did this making us get our own cell phones a lot of us started talking.” The employees perception was that the company was going out of business rather than simply trying to control costs, it doesn’t matter how you spin it, because how you implement and let the employees know, don’t assume everyone is on the same page. Additionally, many employees view this responsibility as a shortcoming of their employer because they don’t want to manage this. It’s not about the reality of the situation many times, it’s the perception, so be aware.

6. Lost revenue. In a case where one company told me about why they stopped the individual liable phones program came from a story that was quite costly. Every sales person was expected to carry their own cell phone and the company would pay them for a flat-rated unlimited plan. It made sense at the time to control costs, but when a few top sales reps left the company and headed out to the competition, they learned a couple of months later that along with that move the sales reps took the deals they were working with them too. They lost something to the tune of SEVERAL MILLION DOLLARS of ANNUAL revenue. In a paraphrased quote from my client, “That was the dumbest move I ever made, and now that we’re back to corporate liable, we issue phones that are approved by us and when an employee leaves, we keep the phone, the number and any sales that might happen.”

The truth of the matter is that as a telecom cost recovery company, our goal is to help our clients reduce their costs and eliminate headaches. For many clients, the perception that it is easier for THEM to manage rather than think about what an employee’s viewpoint might be. A professional organization such as our will show you how to eliminate that headache and still get the best bang for your buck. We enjoy showing our clients various options, make sure you choose what’s right for your company.

Individual Liable versus Corporate Liable Phones, You Need To Consider These Six Facts.

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