Poor expense claim processes have a negative impact on employee engagement, to the extent that many do not always claim expenses they have incurred. This is according to recently released findings based on multi-national research into expense claims by Unit4, a fast growing leader in enterprise applications for service organizations.
Companies are benefiting from unclaimed employee expenses to the tune of more than €14 billion (based on data from only nine countries). The survey was conducted by Ruigrok ¦ NetPanel in August 2015 among senior and middle management professionals employed full and part-time, that submit expense claims in the US, Canada, United Kingdom, Spain, France, Netherlands, Germany, Belgium and Sweden.
The findings are based on responses from almost 2,000 employees with at least 200 responses from each country. As many as one in three employees surveyed across the nine countries say that they sometimes leave expenses unclaimed every year, that they would be entitled to claim back.
US employees give away the most to their employers with 17% not claiming an average of €347 ($390) every year, amounting to more than €8.7bn ($9.7bn) handed back to US companies based on the current working population figures. That’s almost two per cent of the country’s 500bn government budget deficit. 12% of German workers fail to claim all their expenses.
On an average €292 remains unclaimed every year adding up to €1.3bn for German corporations that they should be paying back. The other countries saw similar results – France (€0.6bn), UK (€1.3bn), Canada (€1bn), Spain (€0.5bn), Netherlands (€0.5bn), Belgium (€0.2bn) and Sweden (€173 million).
A number of reasons were cited for failing to claim expenses including expense claims being low value, forgetting to ask for receipts, losing receipts or simply forgetting to submit the expense claim.
One in four employees say they refrain from submitting expense claims because the process is too frustrating and time consuming. In many cases this has a negative impact on the feelings an employee has towards the company they work for leading to disengagement.
One in four also waits for more than one month for their expenses to be paid after making a claim in some European countries, though overall most expenses are paid within a month.
Corporate expense claim processes do not support employee engagement initiatives to the extent that companies are leaving employees short of money. Two out of five (37%) US professionals who regularly claim expenses say this is the case. In France (24%), Spain (23%), the UK (23%) and Canada (20%) approximately one out of four respondents sometimes find themselves short of money.
When asked if they feel their employer is gaining a financial advantage over them through the expense claim process, 42% US respondents said yes. In Spain (29%) and Sweden (26%), the UK (25%), France (23%), Canada (21%) and Belgium (20%) as many as two or three out of ten employees felt that way, compared to only one out of ten in Germany and the Netherlands.
Of the employees surveyed that said yes, as many as 35% (France) of employees feel this has a negative influence on their feelings towards the company.
“The one thing that creates sustainable competitive advantage and long-term strength for a company is the workforce. The people are the company. Research shows that employees who are engaged significantly outperform those that aren’t,” said Kara Walsh, Chief Human Capital Officer at Unit4.
“While employee engagement is driven by many factors, the companies that provide a caring and open workplace environment will win today’s war for talent. With recruiting costs running approximately 1.5 times annual salary, the ability to engage and retain valuable employees has a significant impact on an organization’s bottom line.”
The findings of the survey have been summarized in an infographic. The full report is available on request.