Businesses Must Act Now To Ensure Their Employees Aren’t Short-Changed

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Businesses Must Act Now To Ensure Their Employees Aren’t Short-Changed

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Over the years, the British have become well-known for all sorts of things. There are Great British Bake-Offs, Sewing Bees and Railways, while no one kicks off a queue or a conversation about the weather quite like us. Yet, according to recent research, there’s been an unwelcome new addition to the list, in the form of business expenses—the Great British IOU.

Everyone is familiar with the concept of workplace expenses and it’s fair to say that the concept isn’t entirely positive for most workers. Whether it’s employees turning their homes upside down looking for receipts, the migraine-inducing forms to fill out that are harder to get right than today’s Wordle, or the degree of justifications needed to convince an employer that a brownie is business critical.

But beyond the fact that outdated, legacy expense processes are a nuisance for everyone who comes into contact with them, the reality is that according to our latest research, almost 7 million of Britain’s workers use their own money upfront for business purposes, forking out over £130 on average per transaction.

With this happening 4-5 times a month, employees are facing a huge burden of over £7000 in out-of-pocket work expenses every year. These figures would be wholly unwelcome at any time, but it is particularly so when inflation has risen from just 0.7% at the start of 2021 to over 10% in August 2022.

This threatens to erode the relationship between employee and employer at a time when businesses everywhere need their teams focussed and performing at their best. To worsen the situation, according to the Mercer Financial Wellbeing Index 2022, as little as 37% of companies had a financial wellbeing strategy in place last year. This means there is a huge blind spot when it comes to anxiety and financial stress.

To ensure the workplace remains filled with trust, transparency and empowerment, UK businesses need to act now to ensure their workers aren’t short-changed, and that starts with enhancing the role technology has to play in your business.

How technology tackles the IOU one letter at a time

At Pleo, we have long recognised the power of technology to transform the workplace, and the world of workplace expenses. Not only does it restore trust and fairness to expenses through transparency, but it liberates CFO’s from the mountain of admin that comes with the territory. UK businesses now find themselves in the midst of a financial crisis and their CFOs need to be liberated from the nitty gritty to become a strategic business partner to the CEO.

Together with the right technology, they can bring about the culture change workplace expenses management is long overdue. This means that instead of secrecy and red tape; the system is transparent, simple and, dare I say it, a pleasure to manage.

With rising costs across the board, the need for workplaces to adopt smart spending solutions is more urgent than ever before. With 74% of employees increasingly concerned whether they will be able to claim back any out-of-pocket expenses, and over half (53%) saying they’re more anxious than ever to use their own money in the first place.

To help find a way out of this especially costly (in more ways than one) situation, let’s first look at the pain points of expenses, before exploring how businesses can alleviate each with technology.

Let’s keep pockets out of this

The most direct way of addressing out-of-pocket employees is to not involve the pockets at all. There’s often a stigma in the workplace around company cards; an assumption that every employee who has one is a click away from booking that all-expenses trip to New York. But it doesn't have to be like this.

Much like expenses management, the world of company cards has come a long way and businesses are now able to create personal allowances depending on people’s spending habits, with your CFO having an overarching idea of the money potentially outlaid by the business during that month.

Company cards also work in tandem with smart spending solutions to help encourage visibility into how your employees are spending the business’s money, and give them access to their spending habits as well. So no more waiting around for credit card statements or feeling compromised about sharing the company bank account details. In fact, most spending solutions make this level of information available on an app that’s open and informative.

An end to month-end

Nearly half (43%) of UK workers say that waiting on repayments from their employers has prevented them from paying personal outgoings. When energy bills and rent are set to skyrocket, not to mention—oh, everything—it’s crucial that if you are a business where employees are expected to use their own money for work purchases, that you move quickly to reimburse them.

This is not only crucial to employee bank accounts, but for businesses to successfully navigate the current economic climate, they need to have a good understanding of their bank balance, without money yo-yo-ing between themselves and the workforce.

Employees shouldn’t have to make ends meet until payday, especially when the average wait time to be reimbursed is 25 days! By adopting a more streamlined solution, there’s no reason why employees can’t be reimbursed in a fraction of the time, in turn meaning the spending in the first place is done with the assurance they’ll soon see their moola again.

Forget the faff

Besides money, what a smart spending solution gives back to your team is time. Reimbursement forms, paper receipts—this setup is far too prehistoric for modern businesses.

By digitising your expenses with a smart spending solution, it becomes far easier for a business to track what’s going on and what money is owed between employer and employee. But with employees spending their time every month filling out these forms and then jumping through hoops to submit them, they’ll get time back to focus on the work that makes a real difference.

An expenses process that encourages autonomy, real-time data and visibility, can help teams become more aligned and more compassionate to one another. These are values that should be prioritised by businesses at any time, never mind during an economic crisis. This way, your workplace functions as you need it to, and your employees aren’t out of pocket or out of patience.

James Keating, Chief Marketing Officer at Pleo.

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Businesses Must Act Now To Ensure Their Employees Aren’t Short-Changed

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