Should a Company Provide a Cell Phone?
Updated: Oct 23
There are certainly pros and cons of a BYOD (Bring Your Own Device) employee-owned cell phone plan versus a company-issued phone plan. Every company is different and there may be many more things to consider than what is mentioned here. A company’s goals and circumstances can greatly impact the organization’s decision to choose which phone plan is best for them and their employees. Let’s explore both options and then do some math.
The information provided on this page does not, and is not intended to, constitute legal advice; instead, all information, content, and materials available on this site are for general informational purposes only. Readers of this article should contact their attorney to obtain advice concerning any particular legal matter as cell phone policies, the employer’s ability to manage and dictate employee cell phone loss prevention and data security, and the employer’s obligation to reimburse the employee a personal phone stipend may vary from State to State. No reader, user, or browser of this site should take legal action or refrain from taking legal action on the basis that this information is legal advice. Only your attorney can provide assurances that the information contained herein – and your interpretation of it – is applicable or appropriate to your particular situation in an effort to meet your business goals and meet your legal obligations.
What is a company BYOD phone policy?
BYOD stands for “Bring Your Own Device”. A BYOD policy will outline the guidelines by which an employee will be asked to use their personal mobile cell phone for work purposes. Just as the name implies, the employee brings their personal phone to work and is asked to use it for work purposes. A BYOD policy can extend to other mobile devices beyond just the phone, such as laptops, tablets, smartwatches, etc.
How does a company BYOD phone policy work?
Typically, a company’s BYOD phone policy opens the door to the employee being able to use their own mobile cell phone rather than use a company-issued phone. This allows for the employee to use a device that they are already familiar with rather than having to carry two phones or switch all their data over to a company phone. The personal phones and their text and data plans would then be managed by the employee rather than by the company. If an employee is asked to use their personal phone for business purposes, most likely it will be required by law (check your local labor laws) for the company to pay the employee a reasonable stipend for the use of their phone.
Employee-owned phones will share a combination of both personal data and company data. Because of this, there may be employees who would rather opt out of a BYOD plan and therefore the company would have to provide additional phone options. And, there will need to be measures to secure data on the employee’s phone. Some organizations require software that will wipe the phone clean of corporate data if it detects any potential security breach. Employees will need to know that the employer may have access to their phone’s data including, but not limited to, tracking information depending on the apps being used.
Some Apple iPhones allow for data partitioning which allows for the personal data to be kept separate. (See your cell phone dealer for details.)
Benefits of a company BYOD phone plan
Under a BYOD phone plan, the employee can use their phone in a way that they are most familiar and comfortable with. This may yield greater employee productivity. And companies can host a proprietary application in the cloud that can be accessed through the employee’s personal phone, limiting security risks. This can be done without the employee downloading anything on their personal phone.
With the company merely paying the employee a monthly phone stipend of $30 to $50 per month, the burden of maintaining a phone plan falls strictly on the employee.
The negative aspects of a BYOD phone plan
“Some employees may not want to participate in a BYOD program, especially if the mobile device management (MDM) policy requires that certain apps be blacklisted”. Keep in mind that BYOD personal phones cannot be monitored which may or may not pose security risks.
When an employer requires the employee to download a company specific app on their phone, there may be issues with compatibility depending on the model and OS version. These apps can be used for employees to clock in, adjust work schedules, login to platforms, verify data, etc. There will need to be a clear definition of the phones which are compatible with these apps.
What is a company-issued phone policy?
A company-issued phone policy will outline the guidelines regarding how the company phone shall be used. This policy can clearly outline the corporate goals concerning personal and business cell phone use, outlining when it is appropriate to use the cell phone during business hours and when the employee is “clocked in”.
Benefits of a company-issued phone plan
With a company-issued phone plan (subject to local legal privacy and labor laws) the phone may be able to be monitored as property of the company. In addition, having company-issued phones keeps a consistent phone OS platform throughout the company, thus simplifying IT maintenance of any download applications and their compatibility on the phone among other things. It might be fiscally beneficial to employ company-issued phones depending on the final price negotiations with the phone vendor and the cell phone carrier for the monthly text and data rates.
Negative aspects of a company-issued phone plan
Employees may have a tendency to use their personal cell phone (intentionally or unintentionally) regardless of whether or not they have a company-issued phone. Therefore, having a company-issued phone (when the employee is using two phones) won't fully solve the company’s data security issues.
With company-issued phones there is an initial capital cost of the phone (unless it is baked into the phone plan). A financial analysis would have to be conducted to determine the additional savings or cost of this option.
The simple math of BYOD or company-issued phone plans
- BYOD monthly stipend: $40/month
- Annual interest rate: 5% (based on the company’s current bank borrow rate)
- Initial cost of the phone is: $350 (The cost of the phone paid upfront)*
- Company negotiated phone plan: $22/month
PV = Present Value
PMT = Monthly payment
r = Annual interest rate
n = Number of months payment is made
C = Capital cost of phone
*There is no need to calculate the financial comparison of a phone stipend to a monthly fee paid for a company-issued phone if the initial capital cost is included in the monthly payment. That would be a simple payment to payment comparison.
Below is a Present Value cost (PV) calculation of both options with the phone being paid upfront:
PMT = $40
r = 5%
n = 24
C = $0
PMT = $22
r = 5%
n = 24
C = $350
Note: These figures are based per phone. The difference must be multiplied by the number of employees.
Under this scenario, and these assumptions, if the company were to make a decision on which phone plan option based solely on a financial decision, it would be better for the company to issue phones to their employees (if they could control company-issued cell phone loss and theft and keep it at a minimum).
Note: There may be other financial considerations to take into account based on tax consequences, accelerated depreciation, etc.
To help manage and keep company work phone loss at a minimum, there are new phone separation alert devices (phone reminder devices) that can help. They don’t require a download app and they don’t track employees (100% private).
The Prox PRD® is a great solution. Although the cost of the PRD added to the company-issued plan above is still a cheaper option, the added benefit of preventing employees from leaving their phone behind and losing productivity is an extra added bonus. Although employees may believe they don’t forget their phone, studies show they leave their phone behind more often than they realize.
The Prox PRD is a great solution because it has patent pending Advance Alert Technology, which helps employees remember their company cell phone before it is left behind on the charger, or left in a restaurant, at a meeting, or on the counter at the hotel, all of which can easily lead to theft.
The Prox PR Advanced Alert Technology allows for the employee to adjust different aspects, if necessary. For example, the alert distance is user-adjustable, but can be shorter or further depending on the surrounding environments. The employee can choose an alert tune that works best in their office or home environment (industrial alert options available). The PRD can be toggled between “Home Mode” and “Travel Mode” depending on whether your employee is on business travel. Home Mode alerts ONLY when the PRD is moving out of proximity of the phone (this is the default setting and works great for home and office settings), whereas Travel Mode ALSO alerts if the phone is picked up and moving out of proximity of the PRD. Travel Mode works well for business travelers who are out of town, out eating, leaving a hotel, etc.
Company cell phone loss can be greatly reduced with a Prox PRD for any company-issued phones (iOS or Android). Your business name and logo can also be printed on the front of the PRD. When the PRD is attached to your employee’s keychain (or purse), your employees can help advertise your brand 24/7 wherever they go.
Your employees’ company-issued cell phones and time are both valuable assets. Consider protecting your investment with a Prox PRD® Phone Reminder Device for every company-issued mobile cell phone.
The Prox PRD Phone Reminder Device – Separation Alert
No App | No Tracking | No Registration | No Subscription
iOS & Android Compatible | Replaceable 1-year CR2032 Battery