Younger staff hit by company expenses
Rachel Muller-Heyndyk, August 20, 2018
In the face of slow wage growth and high debt, Generation Z employees find being out of pocket from expenses unfair
Over a quarter (27%) of Generation Z employees (18-24-year-olds) have not been able to pay off credit card bills because they have outstanding company expenses unpaid by their employer, according to Expend.
The research found that 82% of UK Generation Z employees find being out of pocket as a result of unpaid expenses very unfair, and 42% would move jobs if a company had a poor expenses policy.
These findings come as university leavers now face debts averaging £50,000 and an average graduate starting salary of £19,000. According to the ONS, wage growth also slipped to 2.7% from 2.8% in the three months to May 2018.
But despite a slowdown in wage growth and an increased cost of living, younger employees are still expected to float expenses for the business, which can impact their personal finances. This appears to be making younger employees the least tolerant demographic for existing expenses processes, the research found.
Generation Z workers are the most likely to circumvent the expenses policies of their employers, with over a quarter (27%) stating they would spend more than they normally would to make a company expense worthwhile, if they could get away with it. Nearly one in five (18%) stated that they would profit from business expenses if they could get away with it.
Older age groups were found to be more tolerant of existing expenses systems. The 55-plus age group is the least likely to circumvent expenses because of a poor expenses policy, with only 4.9% saying they would expense items they shouldn’t if they could get away with it.
CEO of Expend Johnny Vowles confirmed the role of financial pressure, due to rising costs of living and stagnating wages, in young people's approach to company expenses.
“Younger employees have a hard deal at the moment with rising living costs, wage growth described as ‘anaemic’ by the ONS and higher than ever student debt. While the current expenses system is just the way things have always been done, for some employees this could be the straw that broke the camel’s back,” he said.
Vowles encouraged companies to revise their expenses processes to ensure they are attracting and retaining young workers.
“Organisations need to look at how all processes are impacting on their younger workforce, to encourage recruitment of happy workers but also to minimise the business risk. Disenfranchised younger workers are more open to circumvent expense policies and profit from them than even before, so employers also need to gain greater oversight over their company finances to protect themselves,” he said.
OnePoll conducted the research on behalf of Expend, surveying 1,000 office workers in full-time employment in the UK.