The UK has officially entered a recession, and inflation has exceeded 11% – a forty-year high. The European Union is not far behind; inflation in the euro area has reached 10.6%.
High inflation rates are creating a cost of living crisis. SAP Concur UK managing director Matt Clementson tells UNLEASH: “Our research shows that 70% of employees are concerned with how the increasing living costs are affecting their personal finances.
“This is understandably having an impact on their expectations of their employers, with many wanting more support.”
78% of the 2,500 European employees surveyed believe their employer is responsibility for their job satisfaction, and their wellbeing (which includes financial wellbeing).
Thankfully, 57% of employees believe that employers understand their worries. But that doesn’t mean that organizations know what action to take.
While some are embracing one-off bonuses or pay rises, this isn’t affordable for other companies – remember, companies are far from immune to economic shocks.
EX, expenses and the cost of living crisis
In these challenging economic circumstances (which are complicated by a continuation of sky-high attrition rates, dubbed the ‘Great Resignation’), rethinking expense management could be the secret to successfully retaining and engaging your employees.
Clemenston comments: “Expenses have an under-appreciated role in employee engagement: they signal organizations’ appreciation for the employee and its willingness to take care of employees’ well-being.”
Plus “with less disposable income, employees may not be able to wait as long for expenses to be reimbursed as they did before the pandemic”, stated the report.
The report continued: “Failure to meet these employee needs here threatens to cause a disgruntled workforce, especially if salaries can’t be raised in line with inflation.
“Businesses who can invest in easier processes to encourage employees to expense, increase expensing budgets as well as reimburse employees quickly will have the opportunity to cement employee loyalty”.
The data proves this. 58% of the 2,500 European employees surveyed told SAP Concur that delayed reimbursements because of poor expense process would affect their financial situation even further.
And employees are right to be worried. 36% of the 750 financial finance and HR leaders surveyed by SAP Concur from across the UK, Spain, Italy, France, DACH, Benelux and the Nordics said that the current economic situation may result in more late payments.
The issue is that processes are too manual (51%) and 59% of finance and HR leaders waste time reviewing expenses to ensure they are compliant.
Clementson shares with UNLEASH: “Automation can help accelerate processes, yet many businesses rely too much on manual processes.
“When asked about how their company could simplify the process of claiming expenses, 45% of employees pinpoint automating the process – the most popular option found by our research.”
Therefore, for organizations, the secret recipe to a good employee experience in the cost of living crisis is to invest in automating expense management.
Technology can ensure that businesses have “an expense process that’s intuitive and makes it easy to file a claim” and this “can go a long way in making employees feel appreciated and cared for”.
HR leaders, it’s time to make a business case for new HR tech in expense management tech or face disengaged workers who may at first quiet quit, but eventually resign all together.
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