Employers may be shortchanging employees when it comes to reimbursements
- Employees who pay for company expenses are often short on cash waiting to be reimbursed, according to new research from fintech company Conferma. More than a third of U.S. workers use their own money to cover work-related expenses at least once a month, for an average expense claim of $110.90. About 45% of employees are short on cash because of their employer's reimbursement deadline.
- The research showed that employees have to wait up to two or more weeks for their employer to repay them after submitting a claim. The majority of workers ages 18 to 34 (60%) said they had less money for personal expenses in the short-term, with work spending averaging $116.30 a month, the highest among all age groups.
- Nearly half of employees said they would stop paying for business expenses if they have to wait a long time to get reimbursed. Conferma said employers could be negatively affected by this lost opportunity; 20% of employees said they would stop going on business trips, and 51% said they would stop meeting with current or prospective clients and end marketing activities.
Conferma's co-founder and CEO Simon Barker summed up the problem for employers and employees: "It simply should not be the case in today's world that individuals, particularly the low-paid, are having to hold back personal spending due to the delay in expense repayment. Likewise, it is staggering that a single business opportunity should be missed due to an employee's decision to hold off marketing because of these inefficiencies."
This situation is one example of how outmoded technology can sour employee engagement and productivity (even if it is the responsibility of accounting to perform reimbursements properly). According to a recent Harvard Business Review Analytic Services report, 58% of business leaders surveyed said their technology offerings are a factor in candidates' decisions to work for them and 51% said outdated technology hampers their ability to compete for talent. Employers that act now could best their peers; only 42% of organizations are restructuring their HR operations or revising their strategies to leverage digital tools, a recent Randstad U.S. study showed.
Additionally, financial wellness is a serious consideration for employers that may be seeking ways to improve employee engagement. Stagnant wages and ballooning debt are two major stressors for employees that easily spill into the worklife, and company expenses likely don't assist matters.
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