Employees are facing a hard time when it comes to personal finances. Hot off the back of the pandemic that saw many businesses having to make financial sacrifices to stay afloat, the workforce fell almost immediately into a cost-of-living crisis, and soaring inflation rates.
For today’s employees, everything from buying basic groceries to securing a mortgage is significantly more expensive and therefore more daunting than any time in recent history. Recent research from SAP Concur proves this point; the company’s new research revealed that a huge 70% of employees are currently worried about their personal finances.
HR professionals will know only too well that the solution to these issues cannot be simply indefinitely upping wages to match employee needs or expectations. Realistically, companies are under the same economic pressure that their people are feeling and budgets are therefore tight.
However, there is much that HR can do to ensure that their employees’ financial wellbeing is as healthy as possible, from providing the right kinds of support, to ensuring that processes such as expenses are as seamless and efficient as possible.
Doing so is not only a moral issue. Helping employees with financial wellbeing also demonstrates to your people that their employer understands their concerns in times of economic uncertainty. This could up retention, improve engagement and, of course, aid with workforce wellbeing.
Ensuring that employees are remunerated on time is the bedrock of building trust with your people. And, without trust, no workplace culture can flourish. A worrying 58% of employees in the research conducted by SAP Concur expressed concerns that delayed reimbursements resulting from poor expense processes would further impact their financial stability.
That’s a huge amount of the workforce who are almost immediately bound to feel that their organisation doesn’t consider their financial wellbeing a priority.
“In the midst of a cost-of-living crisis, this could strain the relationship and trust between both the organisation and employees. To avoid this, organisations must get the basics of financial management correct,” notes Cassie Petrie, Managing Director SMB EMEA at SAP Concur.
Similarly, a fundamental basic that employers seem to be getting woefully wrong is destigmatising the conversation around financial wellbeing. Without starting an open and honest dialogue, no employee will admit to facing issues that may well impact their working life.
Some employees are so concerned about their employer’s perception of financial conversations, that they’re even worried about the concept of being judged for expecting reimbursements for workplace expenses.
Data from the research indicates that 49% of employees fret about being judged negatively by their managers if their expense claims are high. This more than likely shows a culture of financial fear and taboo in many organisations.
Perhaps even more concerning is the finding that a huge 48% of respondents are worried employees might be accidentally committing fraud by making mistakes or expensing unauthorised purchases. If nearly half of all respondents are concerned that fraud might be taking place, but are too scared to bring this up, what does this say about financial wellbeing in these organisations?
Petrie states that the first step is initiating a conversation with workers to assuage fears, and create an open dialogue around financial concerns. She says this vitally includes “removing the jeopardy of getting in trouble if expenses are accidently claimed wrong.”
“Instead, being prepared to deal with mistakes around the expensing process is critical for businesses. This is why many are making their auditing processes more stringent. However, this will consequently consume much more of the HR and finance team’s time,” Petrie adds.
Petrie also believes that a key step in reversing these issues is to run regular workshops on processes, to ensure that workers are completely clued in to the correct practises, and therefore alleviate some of the pressure on the shoulders of workers who are concerned about the legality of their actions.
“On top of this there can sometimes be a ’them and us’ perception between finance and employees. When it comes to expenses, having a clear, transparent and enforceable expense policy in place can improve the relations between finance and employees, leading to higher compliance,” she continues.
Finally, and perhaps most vitally, it’s essential that organisations actually have robust processes that work. Getting the tech at the core of financial processes right is absolutely vital. Luckily, there’s currently a plethora of intuitive technology on the market to assist workers and businesses alike in making complex financial procedures easy and fast.
For those getting this right (the research states that this number sits somewhere around 62% of finance leaders) digital tools are helping them manage expenses more effectively across their entire organisation. “Most expense processes are manual and time-consuming. On top of it, many organisations also have complex policies on what constitutes an expense, which can be frustrating for employees,” notes Petrie.
She believes that the future of expensing processes will be driven by the AI and automation revolution. “We’re already witnessing it having a positive impact on organisations who have already deployed it.
“50% of employees pinpoint automating the expense process as the best way to simplify tedious tasks and processes. Overall technology is a game changer as it can analyse large volumes of financial data quickly and accurately, analyse in real-time to detect anomalies and follow all compliance and regulatory requirements.”
It seems, based on the research and Petrie’s insight, that organisations are currently in the midst of a quagmire of financial wellbeing issues. Uncertainty surrounding the economic outlook in the near future is undoubtedly compounding these issues.
However, the data also highlights that there is a light at the end of the tunnel. As Petrie states, businesses are witnessing a revolution in the technological capabilities at their fingertips. If organisations build on a foundation of trust and open dialogue, and support their staff with agile technology, we may soon see a fundamental shift in financial wellbeing for all.
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