Work Expenses Driving Employee Dissatisfaction

One in five Australians aren’t reimbursed for work expenses and it’s making many employees disgruntled enough to walk out the door.

A new survey has found 67 per cent of employees are being left out of pocket for work-related costs, but experts say it’s an easy fix for CFOs.

The survey of 1000 Australian workers by expense management platform DiviPay also revealed one in five employees never get unclaimed work payments back. When asked why, respondents said it was either too much hassle, they weren’t sure if the expenses were strictly work-related, their reimbursement system was too complicated or they had lost the receipt.

Businesses without a streamlined reimbursement system for work-related expenses were leaving themselves open to employee unhappiness and worse – falling retention rates.

Almost half the surveyed employees (47 per cent) who have paid for work-related expenses out of pocket admit to feeling anxious or worried about getting their money back. More than a third (36 per cent) feel dissatisfied with their employer about reimbursements. Risking employee dissatisfaction in a low-unemployment economy could see workers being tempted to look elsewhere.     .

“There are currently more jobs being advertised than ever before with many Aussies re-evaluating their careers, current workplaces and future prospects. , said Daniel Kniaz, DiviPay founder and CEO. For business leaders, having a strong Employee Value Proposition (EVP) has become essential to attract and retain workers.

“Ensuring employees aren’t out of pocket, or worse, are never reimbursed, should not be overlooked. We’re not talking about just money here, but how employees feel about their company and their role in the organisation.”

In June, the nation’s unemployment rate fell to 3.5 per cent representing an extra 88,400 Australians finding jobs in the past month, according to the Australian Bureau of Statistics.

The current labour shortage, brought on by a lack of skilled migrants, is hitting some companies hard. Research by recruitment firm Hays found 91 per cent of employers were being impacted by the skills shortage with 34 per cent saying they felt forced to offer substantially higher salaries than otherwise planned to keep staff.

Although job ads dropped by 2.1 per cent from May to June for the first time in 2022, ad levels remained 23.3 per cent higher year-on-year, data from employment marketplace SEEK shows.

Businesses across all industries are offering a plethora of perks to retain workers, but somehow simple reimbursement schemes are being overlooked, said Russell Martin, DiviPay co-founder and CTO.

“I’ve met with many CEOs and CFOs in my time and there’s definitely a disconnect when it comes to the importance of a streamlined expense management process,” he said. “Employee wellbeing and job satisfaction have catapulted up the priority list with many companies offering a myriad of perks to bolster culture, engagement, trust and productivity – yet somehow work reimbursements seem to slip the net.

“Our research has shown that employees are experiencing high levels of anxiety when claiming back work expenses but this is something that is easily fixable.

“Having a robust, easy to use platform for corporate claims may seem like a small initiative but it can make all the difference to an employee’s job satisfaction and will be crucial for employee retention.”

DiviPay’s research found the pandemic worsened the problem of unpaid work expenses. Many employees felt confused and frustrated as to what is and isn’t considered a corporate expense.

The popularity of working from home has forced businesses to re-evaluate how they allow employees to spend company money. Pre-pandemic it was commonly managed by one of three ways: a credit card controlled by the business owner, employees were asked to pay out of their own pocket and then seek reimbursement, or employees received their own corporate credit card.

There are risks with each approach. In the shared card scenario it can put a lot of demands on an employee to approve each and every purchase. This can delay spending and ultimately, business growth. Hence why it is commonly used by small businesses. The employee reimbursement model fosters resentment among staff with many unsure how to claim their expenses and of those who do, 30 per cent told DiviPay they waited longer than two weeks for reimbursement. And although employee-controlled company cards give workers flexibility, the obvious danger lies in unchecked spending. DiviPay’s survey found 26 per cent of Australian employees with access to a corporate card admitted using it for non-work purposes.

So it’s no surprise that many businesses are reviewing their pre-pandemic expense management tools and opting for virtual credit cards. Much like actual plastic cards, these virtual credit cards are software applications usually carried on card-enabled smartphones. They have a range of features that are unavailable on traditional cards, making it easier for employers to limit theft and wastage while doing away with employees having to dip into their own hip pockets.

With virtual credit cards a financial controller can add rules that ban spending on certain websites or with specific suppliers.

A virtual credit card can also be created and distributed to new employees instantly, just as it can be immediately blocked for resigning employees. Virtual cards can be replicated for hundreds or thousands of employees, with the same or unique set of rules to each card.

Overseeing a credit card using a digital platform gives businesses an unprecedented level of control over expenditure. It enables them to reconcile in real-time, which makes budgeting much easier.

This new-age way of managing work-related expenses also empowers employees to spend without the hassle of waiting for reimbursement. It also eliminates the frustration of not receiving work costs back at all and in today’s job marketplace, that’s a win-win for employers and employees.