Managing expenses isn’t just a hassle. A new survey of UK employees also shows how costly it can be for both workers and employers who require employees to pay expenses up front, then claim them later.
More than a third of respondents said they forget to claim expenses, and 58% routinely don’t claim expenses if they total less than £5 ($7). The survey of 2,000 British workers also indicates that as many as a quarter of workers have postponed or canceled meetings to avoid paying the cost out of pocket, while a third report that they have felt “financially unstable” because they had to absorb large or unexpected expenses.
Notably, women said they claimed far less in expenses: £76 per month on average, compared with £199 for men.
The disparity is a function of women either being more frugal then men, absorbing more of the costs themselves, or not having the same opportunities for business travel and dining as men. It’s probably a combination of all three: Women were far more likely to have average monthly meal expenses under £10, while men are almost twice as likely to claim meals over £100. More than 60% of the women said they had no monthly hotel expenses, compared to 47% of the men. Women were also more likely to say their expenses were too little to justify claiming, or they felt embarrassed asking for them.
While some large companies issue corporate credit cards to ease the burden on employees, a great many (Quartz included) require staff to pay for expenses out of pocket, then submit a claim to be reimbursed. Expense-management software has made the process less cumbersome, but there’s still enough friction that many employees fail to claim everything they’re owed.
The UK survey, it is worth noting, was commissioned by Allstar, which issues corporate credit cards and therefore benefits from highlighting the downsides of systems that require employees to pay for expenses upfront. But promotional interest aside, the survey exposes just how painful pay-and-claim can be.
It’s particularly rough on young employees and workers of limited means, who may not have the bank account flexibility or credit available to absorb several hundreds of dollars that even a modest overnight business trip might require. In the UK survey, a third of respondents under the age of 35 said they repeatedly postponed or canceled meetings because they couldn’t afford the expense. Fewer than 15% of workers over 35 said they canceled meetings for this reason.
Meanwhile, when employees do incur expenses and don’t submit for reimbursement, they’re essentially donating pay back to their employer. The more hoops workers are forced to jump through, the greater the likelihood they won’t file all their expenses, saving the company money. In that sense, they’re like mail-in rebate promotions used by retailers, who employ them knowing full well most shoppers won’t go to the trouble of claiming the savings.
Only a cynic would would accuse companies of creating a system to deliberately bilks workers out of money. But employers and employees alike would benefit from a system that doesn’t rely on the financial flexibility of its workers to function.
This story is part of How We’ll Win, a project exploring the fight for gender equality at work. Read more stories here.