Seven in 10 (72%) UK employees admit out-of-pocket work expenses are impacting their personal finances, while six in 10 (61%) feel anxious as a result of having to cover business spend.
This has led to over half (52%) admitting to using credit cards at least once a week, 21% going into their overdraft and 19% asking for money from their friends or family – according to the latest report from Soldo, the leading European expense management platform.
The research also uncovers 67% of employees dip into their personal finances at least once a week to cover work-related costs and for 20% this happens on a daily basis. Of these frequent spenders, some (20%) wait more than a month to be reimbursed.
Along with household bills, inflation has increased the costs of business travel and entertainment exponentially. And employees of varying incomes are feeling the crunch.
Even those earning a whopping £100k+ – 200% more than the average UK salary – admit their out-of-pocket expenses have “increased significantly” (60%).
So, it’s understandable that over a third (39%) of respondents earning salaries of £20k to £50k – the medium income bracket – feel very uncomfortable paying for things like business travel. Carlo Gualandri, Founder and CEO at Soldo said:
The issues related to out-of-pocket expenses are clearly affecting all employees – making it difficult for businesses that are continuing to ignore the problem. No longer can they sit back and watch their employees use their own money for work-related expenses. Employees, just like businesses, are facing rising costs in the current economic climate and employers need to understand the dire impact out-of-pocket expenses are having as a result. In 2023, with technology at our fingertips to help eradicate such issues, there is no excuse.
Carlo Gualandri, Founder and CEO at Soldo
Impact on personal finances leads to expense anxiety
Out-of-pocket expenses are causing substantial financial disruption for workers. Over a quarter of employees said expenses led to them reducing personal purchases, both essential (27%) and non-essential (27%). Over a quarter (26%) have contributed less to their savings. Almost a quarter (24%) avoided social events.
For the 61% of those suffering from expense-related anxiety, they also admitted:
- Having issues with the expense process or it being too difficult (57%)
- Struggling to keep track of work expenses (65%)
- Worried they won’t be reimbursed quickly enough and it will affect other commitments (78%)
Employees looking to companies to overhaul expense processes
Employees are often waiting weeks if not more than a month (20%), to be reimbursed from their employer.
So it’s no wonder 6 in 10 (60%) would like them to change the process – including giving company cards to all employees to eliminate the need for them to be out-of-pocket (62%), providing tools to automatically capture receipts (50%) and require fewer approvals for low-value expenses (45%).
Large companies are the worst ‘expense offenders
And it seems to be the larger companies that are the worst offenders when it comes to providing solutions to expense management – with 4 in 10 (42%) employees of very large companies (5k+ employees) and a quarter (24%) of companies with 250-499 employees saying they haven’t made any changes.
Employees on lower incomes (£12k-£30k) were also more likely to say their employer hasn’t done anything to address the issue (47%) compared to a third (33%) in total.