According to data compiled by the Economic Policy Institute, the average cost of living for a family with two adults and two children is $65,000/year. In today’s economy, the variables of take-home pay, regional living expenses and personal financial acumen all mean that a delay in reimbursement can have severe ramifications for employees. According to payscale.com, the average take-home pay of a homecare worker is $10.05 an hour. When gas and mileage are an additional expense, that margin gets even smaller.
A common struggle for many US employees is their cost of living outstripping their take-home pay. This is further impacted when companies delay reimbursements of travel and other expenses. One survey finds 3/5 of business travelers had problems paying personal bills due to these sorts of expense reimbursement delays. Scenarios like this can cause stress, which can lead to insomnia and other health issues. Those issues can lead to missed work, further impacting the problem.
An easy way to keep employees happy and motivated is by ensuring quick expense reimbursement. Clear, concise instructions regarding what are reimbursable expenses, as well as direct communication regarding expected turnaround times make all the difference. The problems of the reimbursement process begin with employee engagement and backend performance. Here are three tips in helping to keep employees motivated:
According to a survey conducted by TriNet, employees would prefer to do pretty much anything besides submit expense reports. Instead of submit their expense reports, employees would rather: pay entirely out of their own pocket (53%), pay taxes on things on which they shouldn’t be paying taxes (43%) or just to show how little they like handling expense reports, they would rather add an hour to their commute (53%). By incentivizing reporting, either by convenience or benefits, companies can ensure accurate reporting to their stakeholders, and employees are sure to have their expenses reimbursed.
In the event convenience isn’t a sufficient incentive for reporting, small rewards can be used to encourage compliance. Gift cards, raffles, team lunches, and the like are all incentives an employer can use. Acknowledgements like these are good for team morale, and encourage good reporting habits. These good reporting habits also ensure the cycle of expense, report submission and reimbursement keeps moving rapidly. Further, as an incentive to employers, it’s worth noting that 71% of employees surveyed said they would start looking for a new job if their company was consistently late with reimbursements.
Benefits to Everyone from Improved Reporting
Employees in a variety of different industries pay out of pocket for things like networking events, conferences, and continuing education. Even when they are aware of reimbursement programs through their employers, many employees often don’t take advantage of them. A hesitance around or resistance to paperwork has left many thousands of dollars on the table for employees. According to the same study, 53% of employees surveyed passed up professional development events because their employers had been slow on reimbursements in the past.
When employees feel they can rely on their companies to reimburse them in a timely fashion, the company benefits from improved network reach and a better trained workforce. Investing time, and yes, money, into your employees gives them a sense of appreciation and pride. An employee who feels supported in their long term goals is more likely to include the company in those goals. Expense management automation goes a long way to fostering that environment of support.