This post is about the most boring topic possible: Buying equipment for your employees. It's definitely not what you want to spend your time thinking about, but it's unavoidable.
Nothing I share here is going to seem innovative. Or interesting. It's not either of those. But even boring and obvious policies still require a lot of thought to get right, so I figured I'd share our approach in the hopes that it can save you some time. There's even a full wiki article template at the bottom of this post which you can use as a starting point.
As is the case with most policies, this isn't really something we worried about in the early days. If someone needed equipment, we bought it for them. This worked just fine for a while, but as we hired more people, we needed a more standardized system. This was especially true once the first round of computers got old enough that they needed to be replaced.
Our first attempt at a policy for this was pretty simple: We'd buy each employee a new computer of our choosing (although we let people pick between MacOS, Windows, and Linux) every three years, and we had a standard set of other equipment (desk, keyboard, mouse, chair, etc.) for employees to use.
That worked ok for a while, but over time, it started showing cracks. For starters, some people wanted new computers every few years while others were fine using the same computer for 5+ years. At the same time, some people wanted to upgrade some of their other equipment. It seems like someone that is costing the company thousands of dollars less on new computers should be able to get a nicer chair, right? Even more than that: People are different! Giving everyone the exact same setup was overly restrictive and maybe even a bit paternalistic.
So now we have a policy that gives employees total flexibility.
The solution: An equipment budget
This is going to sound obvious, and yeah, it is: We now give employees an annual budget to spend on their equipment. They're expected to at least save enough of it to buy new computers when needed, but aside from that, they can spend the budget on whatever they want. Some people will buy new gadgets, some invest in ergonomics, some get decorations for their office.
Fundamentally, this is very straightforward. You set an allowance each employee gets at the beginning of the year. They buy stuff. It's counted against the budget. The end, right? Sort of, except as always, the devil is in the details. How do you keep track of all the balances? If someone new starts mid-year, what's their starting balance? What happens if someone's equipment breaks and they don't have budget left over to replace it?
Read on to see exactly how we handle all of these situations.
Tracking each employee's budget
The actual policy is included below, but one thing it doesn't address is how to actually track each person's budget. To do this, we use a spreadsheet that is set up sort of like a ledger. Each employee has a separate tab in the file. When they make a purchase, we add a row to record the expense. At the beginning of each year, we add a row for each employee to give them their new allowance. This lets us calculate an up-to-date budget for each employee easily.
If you want to take a similar approach, you can use this Google Sheet as a starting point. Just make a copy of that file and make a copy the "default template" tab for each employee.
The actual policy
Without further ado, here's the actual complete policy. You can copy it and modify it as you see fit to put in your wiki/employee handbook. Enjoy the most boring read of your life...
Note: This policy applies to full-time employees. If you are an intern, contractor, etc., this policy may not apply. Talk to your manager if you have questions about your situation.
- Each year, all employees are given $900 to purchase equipment for themselves.
- When a new employee starts they are given a budget of $2,900 plus the pro-rated amount from their yearly budget based on what time of year they start.
- Make sure you have enough money to buy a new computer periodically. We recommend saving $600/year so you can get a decent new computer every 3 years.
- Talk to the office manager anytime you want to get new equipment.
Read on for more details on how this all works...
The company still owns the equipment
While this document talks a lot about you buying things, what's actually happening is that the company is buying things which you can use. There are a lot of reasons this matters including that it prevents you from having messy personal taxes (if the company gives you a computer that you personally own, that would need to be reported as personal income).
This means that if you ever leave the company, everything you purchase with your equipment budget must be returned to the company.
When does your budget become accessible to you?
At the beginning of each year, we will add your annual budget to your balance. That is meant to last for the whole year.
You may occasionally find yourself in a situation where you want to borrow from the future (e.g. your computer breaks and you don't quite have enough saved up for a new one, but you're close). Talk to the office manager and we can probably work something out.
Maximum balance: $4,000
The point of this budget is for you to spend it to make your work life better. You shouldn't feel obligated to spend it (we don't want to encourage waste) but we don't want to create an incentive for you to save too much of it for the future.
Because of that, you can't accrue a balance of more than $4,000. Any amount above that will go back to the company.
How to spend money
It's often best for you to make the purchases with your company credit card. If this is difficult for some reason, you can ask the office manager to make the purchase for you. Either way, you should make sure that the office manager is aware of the expense so that it can be recorded as part of your budget.
Note: This is only for your personal discretionary equipment. If your job requires you to make a purchase (e.g. someone making videos needs video editing software, someone going to a conference needs a plane ticket, etc.) that will not be counted against your equipment budget.
What you don't need to buy (i.e. free stuff)
The company provides the basics for free. None of this stuff is premium or glamorous, but it should be fine to get the job done. This way, your budget can be spent upgrading the things that matter to you. Free equipment will come from our existing inventory, so you won't be able to choose the specifics (eg. brand, color, etc.).
Here's what you can get for free:
- Non-standing desk
- Office chair
- A headset for phone/video calls
- Two computer monitors
- Docking station
- All the stuff required to make those things work (various cables, power strips, etc.)
- General office equipment (paper, pens, etc.)
- A loaner computer - You shouldn't rely on a free computer, but we have them as backups.
Note: You can have one full workstation both at the office and at home, so you can 2x all of these things except the computer if you plan on setting up a home office.
What you can/must buy
The most important purchase: Your computer
There's a lot of equipment you might use to do your job, but the most fundamental tool is a computer. This is the one thing that you must buy with your budget.
You're expected to have a computer that can easily handle all of your tasks required to do your job (video calls, running our dev environment if you're a coder, etc.). You also may sometimes be required to use your computer in various places (e.g. a conference room) so it's important that you have a laptop with enough mobility that you aren't tied to your desk.
Our recommendation: Get a Macbook Air or Surface Laptop every three years
As long as you satisfy all of the requirements above, you can allocate your budget however you want. But if you don't feel like figuring out your own budgeting system, here's what we suggest:
- For most people at the company, the best computer is a Macbook Air or Surface Laptop upgraded to have at least 16 GB of memory. At the time of this writing, these cost about $1,800.
- It's unpredictable how long computers last, but most last for at least 3 years. You might get lucky and be able to get 4-6 years out of a computer, but you should budget for buying a new computer after 3 years in case your current one doesn't hold up well. This means saving $600 per year for your next computer.
- If, after 3 years, you have the $1,800 saved but you don't think you need a new computer yet, great. Go ahead and spend all your new budget on other things. By being able to delay buying a new computer, you'll have a lot more money to spend on other things, although you shouldn't delay so long that your computer gets in the way of you doing your work.
That's just a suggestion, but the point is, you're expected to have a good, working computer, so it's your responsibility to make sure you budget for that.
Other things you can buy
You can buy anything that is connected to your work or work environment. That includes tools (computers, tablets, mice, keyboards), decorations for your office, and items related to your comfort (a fan, lamp, etc.). It's fine to spend your budget on things for your home office as well.
Most people choose to spend most of their budget on upgrading the free items that they really care about. For example, you might want an adjustable standing desk or a premium chair.
"Buying" equipment we already own
An unfortunate reality of running an office is that we end up with a lot of equipment that isn't being used. For example, if someone buys a handful of things with their equipment budget and then they leave the company, what should we do with those things?
That's why we allow employees to "buy" items that the company already owns at a significant discount from what the list price would be. Generally speaking, you'll get a 50% discount (and sometimes more) for any item we already have. Talk to the office manager to see what is currently available.
Buying old computers
Computers are a bit different from other equipment because they get a lot worse over time, so the age of the device matters. You can still buy old computers, but they must be able to do the job well. We'll handle each item on a case-by-case basis, but as a general rule, you might expect the following discounts:
- 1 year old = 30% discount
- 2 years old = 50% discount
- Each year after that is another 10% discount.
Ask the office manager if you'd like to see what's available.
Repairs and replacements
If anything other than your computer breaks or is stolen, you can replace it with the free equipment until you have enough budget saved to buy something new. If you'd like to "borrow" money beyond what you have in your budget, we might be able to work something out.
If your computer breaks or is stolen, we'll handle it ad hoc. If the computer is nearing the end of its 3-year expected lifespan, we'll probably give you a loaner until you can buy a new one with your budget. If it's brand new, we'll probably replace it (using a loaner for 3 years isn't reasonable). If it's in the middle, we'll probably buy a new computer and split the cost between your budget and the company's money.