Employee expenses have changed a lot in the last three years. Take, for example, our imaginary salesperson Layla. In 2020, she was expensing things like an ergonomic chair, new SaaS tools, and tech equipment to help fulfill her role at home. In 2022, the SaaS remains, but Layla’s now booking flights and attending conferences as travel and networking opportunities resume.
For businesses, understanding Layla and her colleagues’ spending is vital. Organisations need to know what everyone is spending, where, and how. And they need to track spending efficiently so they can appropriately forecast, budget, plan, and optimise their efforts.
It’s clear that businesses need good spend management visibility and control. But what about employees? For most companies, their people are the biggest asset (and expense), and they must be appropriately equipped to do their jobs with minimal friction. This is where getting spend management and employee satisfaction right can be a real balancing act. But it can be done. Here are the three most important things to consider.
1. Employee empowerment
It’s a given that employee empowerment encourages employee satisfaction which in turn promotes productivity and results. Zenger Folkman “found that only 4% of employees are willing to give extra effort when empowerment is low, but 67% are willing when empowerment is high,” in a study cited by The Wharton School.
Empowered professionals feel trusted by their employers to make decisions within their own roles to push the business forward. This trust, coupled with removing many bureaucratic obstacles, helps people feel satisfied at work and produce better results.
So, if professionals feel empowered by employers who trust them to make decisions, including financial decisions, then letting them spend for work should be a no-brainer, right? Individuals and teams should be free to spend as needed, and the companies can have cohorts of happy, productive team members. Right?
The problem for businesses is that complete freedom can become extremely costly, hard to track, and in extreme cases result in misuse. The answer to a balance of a satisfied workforce and a healthy, transparent business budget can never realistically be complete freedom over expenses. Instead, it needs to be ‘freedom within a framework.’
2. Offering freedom within a framework
The ideal situation will be one where a company has a robust expense policy, and Layla and her colleagues have an easy way to spend without breaking it.
The expense policy could include limits on per diems for travel, class of hotel, mileage allowances, and levels of approval for spending certain amounts on equipment. It should clearly outline what equipment staff can purchase and what tools they can sign up for. The policy should also clearly define spending limits and what to do when they need to be broken.
A company’s expense policy should also include approval workflows. Some companies, like Netflix, have scrapped expense approvals in recent years, and people have been given a policy that boils down to the strapline, “act in Netflix’s best interests.”
Of course, a relaxed to non-existent expense policy may be the winning formula for some companies, like Netflix, but for most companies, it isn’t. Most companies will find they need to give their people certain rules about spending to provide them with the freedom they need to spend without denting the company’s financial health.
The question is, how can people easily keep within the rules and ensure their spending is compliant with their company’s policies?
3. Removing expense management friction
Here’s where company card and spend management solutions like Payhawk come in. Solutions like these provide people with access to physical and virtual company cards via platforms and apps with pre-approved budgets. Businesses can build their spend policies into the platform so people can’t overspend.
In this scenario, companies can give people a certain amount of spending power to go out and move the needle on business objectives through their work while still maintaining control and visibility over spend and making it easy for everyone to stay compliant. The business is happy, and its people can avoid the frustrations of lengthy expense processes and constant fund requests. It’s worth remembering that unengaged employees can cost businesses millions. It’s estimated that disengaged employees in the UK alone cost the national economy £340 billion annually.
Gone are the days of dusty folders full of policies fading away in some folders somewhere (even virtual ones). These days, most companies have concluded that employee compliance and satisfaction are inextricably linked. Companies that design policies for their people to follow will achieve much more via a built-in, user-friendly process than a strict set of rules. And they can really nail compliance if the rules live within the tool they use to execute their tasks.
From disgruntled professionals with packed wallets of receipts and afternoons expensing to stressed-out finance teams who are fed up with chasing invoices, the friction points can be many and complex when it comes to expense management. So, to achieve a frictionless, people-centric experience, the process (and compliance) should feel easy.
People feel empowered when they are trusted to get on with their jobs. But empowerment isn’t the end of the story. Employee satisfaction will be heavily influenced by the processes involved with necessary, regular admin tasks like expensing for work.
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The bottom line: Empowered employees are more satisfied
When people are satisfied, they stick with their jobs for longer. It may seem strange to link expense management to retention, but it makes sense. Trust, support, and the right financial tools make people’s professional lives easier, tasks quicker, and interactions more friction-free.
This is a guest post by Trish Toovey, content director at Payhawk, a leading company card and spend management solution.
From Trish Toovey
Trish Toovey is the content director at Payhawk. She's been writing stories and articles since she could hold a pen. When she's not writing or managing content, Trish stays busy paddle boarding and listening to podcasts.