New research reveals UK workers are out-of-pocket by £51.2 billion in expenses.*
Almost 6.9 million of Britain’s workers* use their own money upfront for business purposes; on average, forking out £135.22 per transaction 4-5 times a month (55 times a year). This equates to a huge £7,437 bill in average annual out-of-pocket work expenses per employee.
The impact of these employer outgoings have been found to have regular negative ramifications on the individual’s personal budget. With 43% of workers saying they’ve previously been unable to meet a personal financial obligation, such as paying for bills, rent and groceries, due to waiting on repayments from their employer. While 4% say this happens regularly.
Workers typically take 12 days to submit an expense claim, while a business generally takes 13 days to reimburse the amount, totalling 25 days from the transaction date to the money being reimbursed. In 23% of cases, employees wait one month or more to receive the money back from their employer from the date of the request. Employees also predict they spend an average of 1hr 14 minutes every month managing their expenses – taking up the company’s, and sometimes their own, time.
To add to that anxiety, nearly three quarters (74%) of employees admit to feeling concerned they might not be able to get the money back when making purchases for work. These factors all contribute to over half (53%) of employees saying they’re more anxious than ever to use their own money for work expenses. Yet with the right spending solution, employers can ensure the wait time for reimbursement, and other factors, are closed out.
Further, businesses have the added opportunity to work in tandem with their people to ensure out-of-pocket business payments don’t have an impact on worker’s mental wellbeing. Out-of-pocket spending is far from ideal for businesses too, as by restricting finance teams’ visibility, they only have half the picture when it comes to company spending, and may struggle to manage it.
To alleviate these issues, businesses must seize the opportunity to provide a more forward-thinking, autonomous and time-saving solution to company spending.
James Keating, Chief Marketing Officer at Pleo, said: “Without action, the state of business expenses will begin to eat away at the employer-employee relationship. This is why both businesses and their people need to work together to find a solution.
By switching from a legacy expenses management system to an inexpensive and simple spending solution, businesses can cut down on the likelihood of out-of-pocket employees and ensure they’re not adding to current financial pressures.
Businesses stand to see benefits beyond more efficient spending too, with processes that encourage autonomy, real-time data and visibility, helping teams become more aligned and more compassionate to one another.”
