Contributor: Andrew Foster, VP consulting EMEA – AppZen |
Andrew Foster, VP consulting EMEA – AppZen
New data* reveals how the pandemic and remote work has impacted company expense reports. In addition to a 57 per cent increase in expense claims for internet, UK respondents’ claims for electricity and gas have risen 50 per cent, possibly impacted by colder weather and evenings getting darker, earlier. The findings shed new light on shifts in expenses during the pandemic and uncovers differences in reimbursements based on genders and roles.
Surveying 1,000 UK and US-based workers of companies with at least 250 employees, the data provides insight into how companies have adapted new expense policies and how those changes have impacted employees.
Remote work policies
Research shows the drastic shift from office to home working and the importance of clearly stated policies. Amongst UK employees who are working from home, 93 per cent switched to working from home because of Covid, with only 7 per cent working remotely prior to Covid.
The volume of work-from-home expenses grew with the arrival of Covid – from 69 per cent to 75 per cent after lockdown – but not as significantly as expected. This is potentially because employers were slow to react, with only 51 per cent of organisations updating their expense policies as a result of Covid, according to survey respondents.
- Failure to update expense policies leads to employee confusion
Updated policies made a significant difference to employee’s understanding of updated Covid expense policies. 92 per cent of employees whose employers updated their expense policy due to COVID said their organisation’s policy was clear, compared to only 61 per cent of employees whose employers did not update their policy.
- Clearer expense policies increase perceived fairness
Updated Covid expense policies led not only to greater clarity for employees; 83 per cent of employees who received an updated policy due to Covid said their employer fairly compensates them for work from home-related expenses, compared to only 29 per cent of employees at companies where the policy was not updated.
Disparities with Positions, Gender and Location
Research shows several notable differences among executives and non-executives in the expense report process and a gender divide.
- Women vs. Men: Women are less likely (59 per cent) than men (80 per cent) to feel fairly reimbursed for work from home-related expenses. This could be due to a whole host of factors, including that women are more likely to work in industries, such as education and healthcare, that cover fewer remote-work-related expenses, as well as the fact that women are less likely to hold executive positions for which expenses are more often reimbursed, and less inclined to claim expenses in the first place. In general, women claim less than half the business expenses of men, per Allstar research.
- Positions Matter: The C-suite and company executives are more likely to have company credit cards and expense accounts than non-management employees. (48 per cent vs. 25 per cent), while the majority of employees pay for work-related expenses with their own money, and are then reimbursed. In the UK, 78 per cent are reimbursed for work-related expenses versus 22 per cent who use a company credit card or expense account.
- Jobs and Roles: The COVID lockdown had a disproportionate effect on the shift to work from home for specific jobs and roles. 91 per cent of middle management switched to working from home, as compared to 64 per cent of sales staff who made the switch.
- Differences between UK and US expense claims: Remote-work expense trends were largely consistent between UK and US workers, with a few notable differences.
- US respondents reported more than twice the amount of monthly work-related expenses than those in the UK. However, this could be attributed to the fact that UK workers who have to work from home can claim tax relief for costs like heating, water bills, home contents insurance, business calls or a new broadband connection, as well as for equipment such as a laptop, chair or mobile phone under certain circumstances.
- Also, a greater percentage of UK employees feel more uncomfortable submitting expenses for items that would have been unusual to request before COVID-19, as compared to their US counterparts (56 per cent vs. 51 per cent).
“As the UK enters its second lockdown, alongside colder weather and darker days, the costs of remote work could rise noticeably,” said Andrew Foster, VP consulting EMEA, AppZen. “As the research shows, businesses need to devise consistent, clearly-communicated policies and to automate processes so that expense reimbursement is both fair and uniform – instead of coming down to the generosity of the particular person approving your claims.”
The survey was fielded on the Pollfish platform in August 2020 with a sample size of 1000 participants employed by organisations with 250+ workers who work for wages and are eligible for expense reimbursements. Geography of survey takers was broken down 90 per cent from the United States, 10 per cent from the United Kingdom. Z-test criteria (95 per cent confidence level) are used to validate the statistical significance of observed differences.