Slow and Ineffective Expense Management is Harming Employee Wellbeing

By Gethin Nadin, award-wining psychologist and two-times bestselling wellbeing author

During the Autumn Budget statement earlier this month, Chancellor of the Exchequer, Jeremy Hunt confirmed that the UK was now in a recession. While the Office for Budget Responsibility believe this recession with last a year, the Bank of England think it could last as long as two years. But however long the recession lasts, there is one thing we can be very sure of – employee financial resilience will continue its decade long erosion.

Back in 2019, despite encouraging signs of falling unemployment and low interest rates, the impact of Brexit meant employees were struggling more than they had this century with their finances. Consumer lending was high, and we had developed a stagnant savings habit which led employees to be exposed to the generation-defining events that were about to come. As the pandemic took hold in early 2022, employees’ financial wellbeing hit the floor.

Throughout the pandemic, despite the largest physical threat to most employee’s wellbeing, more than half reported that their biggest wellbeing concern was money. As the pandemic eased, the war in Ukraine and the energy crisis compounded the nations’ finances and we entered a global cost of living crisis. SAP Concur’s latest report shows us just how impactful the last few years have been on employee’s finances, and subsequently their money.

Seven in ten respondents told SAP Concur that they were concerned about their finances - that’s a significant number of people. So significant are these concerns that they are changing the way people work; almost half say they are now aiming to spend more time in the office to avoid running up energy bills at home. Which means employers need to admit the role they may play in worsening employee wellbeing.

Employers have to be the solution, not the problem

All of the recent global events that have been harming employee wellbeing have had a substantial impact on employee financial wellbeing too. According to Lloyds, in 2022, 80% of us have less than £500 in savings – with nearly one in five having less than £100. Most employees are now living on a knife-edge with little to no buffer to cover expenses themselves while waiting for them to be repaid by their employer. A delay of just a few days is now enough to push employees further into the red.  

I’ve experienced first-hand how slow and poor expense management can affect an employee. At the start of my career, I was asked to work 200 miles away in another location for a few months. I was expected to stick to the monthly expense process which meant a month’s worth of food and travel had to be put onto my credit card. At the time, I didn’t have the credit or funds available to actually do this. The impact of this was having to borrow money from my parents and go without to ensure I had money to cover my working expenses for the month ahead. This secondment eroded my financial resilience so much that the stress made me lose weight and it began a long battle to rebalance my finances which ended when I volunteered to do paid medical testing to clear my debt. 

At this time of significant financial stress, employers cannot afford to be contributing to the situation through slow or inaccurate expenses management, and leaders seem to agree. Almost 40% recognise that their expense management and policies need to be updated at this time, and more than half say their current expense management system is too manual to work in a hybrid environment.

According to CEBR, poor financial wellbeing at work is costing UK employers £1.56 billion every year through increased absenteeism and presenteeism. Over the last 12 months, it is estimated that half a million British workers have taken time off due to their financial wellbeing – that’s over 4.1 million lost days of work. Investing in better and easier ways for our people to complete and submit their expenses not only benefits the employer but eases the pressure on employees too.

Better expenses management eases the pressure on employees

For me, one of the most surprising stats to emerge from SAP Concur’s latest research was how employees were putting additional financial pressure on themselves because they were worried about what their employer might think, or because their expenses process is too difficult. Almost half admit to not reclaiming all of their expenses and are worried they are losing out financially because of unclaimed expenses. Employees also admitted that the current financial situation was making them more concerned about submitted expenses because of their employer thinking badly of them for just claim what they were entitled to.

For more than a decade, I’ve been writing and speaking about employee financial wellbeing. It is without a doubt, one of the primary pillars of our wellbeing at work. Worrying about money is the number one reason why most of us don’t sleep well. When financial pressure increases, our work suffers, our mental health declines, our relationships become strained and even our IQ has been found to drop. I think we can therefore state with confidence that slow and ineffective expense management is driving poor employee wellbeing.

We must ensure our processes aren’t harming employee wellbeing

In 2022, Benefex found that 99% of global employers put employee wellbeing is a top priority. For global employees, they too say wellbeing is also their top priority. However, according to Zellis, just 12% of employees believe their employer is supporting their financial wellbeing during this crisis. It’s clear that for employees who feel their organisation is failing to support them at this time, or worse, causing them to struggle more, they will seek to find work elsewhere, or worse, continue to work while disengaged.

While many employers can’t afford to give generous pay rises that will buffer against the cost-of-living crisis, they can make sure that they don’t add to, or cause unnecessary stress and worry by investing in better expense management technology. Real and effective wellbeing at work begins with ensuring you as the employer aren’t putting unnecessary pressure on your people.