As companies drag their feet reimbursing business expenses, Gen Z feels the pain
As businesses continue to take a hard line on RTO, another burden has emerged for employees: they’re being forced to bankroll their own corporate expenses, with Gen Z workers bearing most of that load.
New research from Conferma, a virtual payments tech company, reveals that employees are fronting some $8 billion in work-related costs annually. The average worker now covers $320 monthly in business expenses, a 231% jump versus 6 years ago.
The impact is hitting younger workers the hardest. Nearly 70% of Gen Z employees report being expected to cover more costs since the pandemic, spending an average of $253 monthly on behalf of their employers. Despite 57% wanting more business travel opportunities, almost half avoid work trips due to the hassle of expense claims.
What results is something of a paradox, as more than half of Gen Z workers think halting business travel may harm their career prospects, yet 72% experience cash flow problems because of lax expense management.
“Employees aren’t choosing to lend their companies money; they’re forced to because corporate payment technologies are outdated and painful to use,” says Jason Lalor, CEO of Conferma.
Companies are taking an average of two and a half weeks to process reimbursements, leaving employees cash-strapped in the interim, according to the report, based on a survey of 1,000 workers in the U.K. The average employee loses nearly $300 annually through delayed or missed reimbursements, with some money never recovered at all.
The human cost is real, with 1 in 5 employees being forced to borrow from friends or family to cover their expenses and 7 in 10 reporting cash flow issues. For Gen Z, the problem is even greater, with many scrambling to cover the essentials while they await reimbursement.
Beyond the individual hardship, outdated processes related to expense reimbursement create inefficiencies across the entire business, the report points out. Employees spend the equivalent of one working day per month managing manual expense procedures while more than half avoid needed work purchases to keep from having to pay out of pocket for them, potentially delaying critical business decisions and disrupting operations.
In the U.S., airline tickets remain the single largest business expense, according to a study by SAP Concur, followed by lodging and meals.