News: Nearly 1 in 4 employees is using work expenses to cover personal costs: Survey

Compensation & Benefits

Nearly 1 in 4 employees is using work expenses to cover personal costs: Survey

Spendageddon depicts the dilemma faced by leaders as they grapple with maintaining spending control amidst conflicting policies and employee financial worries.
Nearly 1 in 4 employees is using work expenses to cover personal costs: Survey

Several employees are finding themselves navigating financial strains that extend beyond the workplace. A recent survey has shed light on a concerning trend - workers resorting to using work-related expenses to offset personal costs. 

Emburse, Inc, an independent provider of travel and expense software, unveiled heightened employee worries about personal finances and the expenses associated with complying with return-to-office (RTO) policies. 

The findings suggest that many employees are categorising personal expenses as business expenses. Emburse cautions of an impending "Spendageddon," a scenario where finance leaders struggle to maintain control over spending due to the conflict between their policies and employee financial concerns. 

Emburse's survey, conducted by YouGov and encompassing over 1,000 workers, sheds light on the prevalence of expense fraud, signalling the onset of Spendageddon. 

Approximately a quarter (24%) of employees acknowledge resorting to passing off personal purchases as business expenses due to financial constraints. Surprisingly, instead of mitigating fraud, corporate expense practices appear to exacerbate the issue. 

As employees grapple with personal financial challenges and incur expenses on behalf of their employers, these out-of-policy claims reflect a phenomenon dubbed "revenge spending." 

Corporate expense practices impacting employees:

  • 62% expressed "somewhat" or "very" concern about their personal finances.
  • 40% incurred fees (overdraft, excess, or late payment) or interest on personal credit or debit cards due to business purchases.
  • 19% experienced interest on personal credit cards because of delayed reimbursement from their employer.
  • 19% had to postpone purchases or payments while awaiting reimbursement.

Financial strain from return-to-office policies:

  • 27% experienced higher commute costs.
  • 20% faced increased food expenses.
  • 12% dealt with elevated childcare or pet care expenses.
  • 13% relocated to adhere to their company's return-to-office requirements.

“Employers can - and should - lessen the burden on employees without compromising their own need for efficiency. Strong corporate spend and virtual card policies keep employees from having to dip into their personal finances, expense automation speeds up reimbursements so no one has to incur fees or interest, and giving employees greater visibility into policies builds trust– all of which improves productivity,” said Adriana Carpenter, Emburse’s Chief Financial Officer. 

“Emburse has worked with many of our customers to deliver card-based expense solutions to their employees. Corporate cards eliminate the need for individuals to wait for their reimbursements, offer deep spend visibility, cut out-of-policy transactions, and also provide cash rebates to the organization. There’s really no need for a conflict between providing a quality employee experience and maximizing bottom-line benefits for the organisation,” concluded Carpenter.

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Topics: Compensation & Benefits, #HRTech, #HRCommunity

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