Organizations have made significant changes to enable working from home, but what has it meant for employees, and, specifically, their expense claims?

AppZen, the leading AI solution for modern finance teams, released new data that reveals how the pandemic and remote work have impacted company expense reports. CEO Anant Kale provides insights into the findings and how companies should take note when it comes to handling employee expenses moving forward.

Why did AppZen conduct the survey and what were the primary findings?

We surveyed 1,000 workers of companies with at least 250 employees to gain insight into how companies have adapted new expense policies and how those changes have impacted staff.

AppZen’s research shows the drastic shift from office to home working and the importance of clearly stated policies. Seventeen percent of employees worked remotely prior to COVID, spiking to 83% during the pandemic.

We also found that 75% of employees submitted work from home expenses during the pandemic versus 69% of employees who submitted expenses pre-COVID.

The findings also shed light on the importance of ensuring policies are current. Eighty-three percent of employees who received an updated policy said their employer fairly compensates them for work from home-related expenses compared to only 29% of employees at companies where the policy was not updated due to COVID.

What are employees submitting expenses for?

Our research discovered that claims for internet usage at home rose 6% and 46% of companies are reimbursing their employees for internet during COVID.

While the pandemic has led to different kinds of expenses for workers, only 29% of employees feel they are fairly compensated for these new types of work from home expenses, such as childcare. Furthermore, only 26% say they feel uncomfortable about actually claiming these types of expenses.

How do gender and position play a role in expense reports and company reimbursements?

AppZen’s data shows differences among executives and non-executives in the expense report process and a gender divide.

Women are less likely (59%) than men (80%) to feel fairly reimbursed for work from home-related expenses.

Perhaps not surprisingly, the C-suite and company executives are more likely to have company credit cards and expense accounts while the majority of employees are reimbursed for work-related expenses paid for with their own money.

The COVID lockdown had a disproportionate effect on the shift to work from home on specific jobs and roles. Notably, 42% of business owners/business partners and 37% of sales managers worked from home prior to the COVID lockdown.

What can companies learn from this survey?

Our research has highlighted some of the challenges faced by organizations during the COVID pandemic.

Most have resulted from a lack of action or, to be more precise, a lack of proactive steps to adapt to the changing situation. Here are three recommendations for organizations to re-engage with their workforce and build a modern, repeatable structure for managing expenses and change moving forward. 

What shift do you see in work from home expenses?

Expense types have changed. Employees are not claiming classic travel and entertainment (T&E) expenses. However, they are claiming new types of work from home-related expenses. These include one-off items such as office chairs, external monitors and desks; subscription costs such as internet usage; and COVID-specific items like hand sanitizer and face masks.

Organizations need to adapt their expense policies quickly to embrace this changing environment. The new policies need to be clear, fair and configured in a software system that can apply them the second they are activated. 

Once policies have been adapted, what else should employers be aware of?

Crises come and go but what we have learned from COVID is that the ability to adapt and roll out new policies quickly and dynamically is the cornerstone of resiliency.

Best practice organizations will utilize their AI-enabled expense management platforms to automatically identify trends and changes in expense behavior. All enterprises should create adaptive policy frameworks to ensure policies receive regular reviews.      

With new policies in place, the organization should proactively communicate the changes and why the changes have been made. The first time such a significant change is made, the communication should be as visible and personal as possible. Webinars or video meetings are ideal in this situation. 

Communication should not stop after the initial flurry of activity. Reinforcement of the new policy rules and regulations is essential for ensuring maximum understanding and compliance.

What else does the research tell us and what should companies keep in mind?

We see several unexpected nuances in the research. From a perception that senior executives are getting preferential treatment to women feeling less well compensated for work from home expenses, these nuances can only be truly understood by talking to staff. 

CFOs understand the cost of perpetuating harmful industry and societal practices. This can cost the company valuable employees and put the organization at risk of blowback. Through analytics and rapid adaptability, finance leaders are equipped to change these practices and therefore the overall health of the business. 

In addition, organizations should create a regular cadence for feedback from staff. This ongoing dialogue should be at least quarterly and involve both the finance team and leaders from within the business.

By actively eliciting details of employee concerns, the organization can continually develop and refine policies that fairly compensate employees for out-of-pocket expenses.

For more information, recommendations and a look at the full report, visit: https://www.appzen.com/blog/four-ways-for-finance-teams-to-avoid-employee-disengagement-during-covid/