Embedded finance specialist, Weavr has raised a serious cause for concern amongst employers as it found that employees in the UK lost an estimated £690million in unclaimed and unpaid expenses, with 81 per cent stating they were left out of pocket by their employer for more than a month, leading to financial and mental health concerns.
The Weavr report, The days are numbered for using employees as a credit line, explores how employees are paying for work-related expenses, highlighting the inadequacies of traditional expense management systems. Not all hope is lost though, as it also spotlights how embedded finance can be utilised to remove expense management burdens.
It reveals alarming stats on the time it takes from claim to payout – if those claims are even paid out at all – and the sums employees effectively loan their employers until they’re reimbursed. Sixty-three per cent of 500 respondents, surveyed by Censuswide, the polling firm, said they felt let down when their claims weren’t reimbursed. Four per cent added they suffered significant losses, totalling £500 or more, while 11 per cent said failed reimbursements happened “often” or “all the time.”
UK field workers have been particularly affected, with 76 per cent saying they’ve permanently lost money due to employers failing to reimburse them. It’s a clear sign that many organisations need to rethink how they support their teams financially.
In addition to employers failing their employees, 75 per cent of workers admitted that they had not actually put in a reimbursement claim, resulting in an average £90 loss per year. Across the UK’s blue-collar workforce, this adds up to an estimated £690million lost annually—money that could have gone back into workers’ pockets. The reasons are clear: overly complicated expense systems and confusing HMRC rules are making the process harder than it should be, leaving employees to shoulder the cost of inefficiencies.
Eroding engagement and loyalty
Warning of the potential downfalls of not relying on employees’s funds, Alex Mifsud, CEO and co-founder of Weavr said on the report: “More and more employees across the UK are finding themselves feeling like human overdrafts for their employers given how often they are made to cover company expenses.
“Whether the cause stems from employers withholding or delaying expenses or employees finding the expenses process overly complicated, the results are the same: negative feelings towards the business and the work required. It’s not just an issue of employees becoming out of pocket, it can also permanently damage the reputation of the employer.
“In the current economic climate, where cost-of-living increases have put pressure on the personal budgets of many workers, this reliance on employees’ own funds erodes engagement and loyalty.”
Is there a solution to this problem? According to Weavr, company-funded expense cards can be a lifeline in ensuring loyalty and better feelings towards a company. Utilising embedded finance, these cards eliminate the need for employees to cover costs out of pocket and work seamlessly within the tools they are naturally using at the time they plan expenses, such as accounting apps, business travel booking platforms, and ERPs.
They ease the personal financial strain they might otherwise face. In fact, according to the report, 83 per cent said they such a card would improve their cost of living challenges while simultaneously removing the hassle of navigating complex expense rules. Over four in five (77 per cent) said this sort of solution would also have the benefit of boosting job satisfaction. By integrating card-based expense management, the process stays within one platform, providing data consolidation and process efficiencies for employers.
