Could reward professionals be overlooking a fundamental hole in their financial wellbeing practices?

Expenses – usually managed by finance and payroll – are not often associated with the reward function. However, in the context of financial wellbeing, they really should be considered.

Often employees are expected to pay up-front for business expenses, be it to attend training courses, visit clients, go to conferences or any other myriad of business reasons. These journeys, hotel stays and business lunches are all deemed to be essential to the organisation – yet employees are often required to fork-out for these business expenses.

Although most organisations will duly repay their employees in their next pay packet or sooner – the fact remains that employees are left out of pocket. For some this won’t be problem and many will simply put the expense on their personal credit card. However, what about those individuals who cannot afford these expenses or do not have a credit card? Is the business inadvertently putting them into a position that is causing financial distress?

Lower or modestly paid staff or those who are not often called on to create business expenses – such as those who have to attend one-off training courses – are among those most vulnerable. Even those on larger salaries may struggle to pay for their normal personal expenses plus overseas business trips that involve flights and lengthy hotel stays, not to mention meals and transfers.

So what can be done to support employees with business expenses?

As with most things, a lot comes down to culture. Open and transparent cultures that give employees the confidence to say they cannot afford an overnight stay or an expensive train ticket is of course desirable, although it is also true that many people find it difficult to discuss money.

An alternative could be to train line managers to check employees – particularly those not usually expected to claim expenses – are happy with the process and are in a position to pay. Line managers should also know what action they should and can take to support employees if they cannot afford a business expense.

Beyond this, expense policies should be revisited. For those who regularly make claims, would an expenses float – an amount of money given to the employee to draw expenses from – be more practical? Other options could include paying for employees’ expenses up front or issuing company credit cards.

Ultimately reward and benefits professionals who are designing financial wellbeing strategies need to talk to payroll and finance departments to create better ways of working with expenses. All too often finance departments are focused on processes and procedures, and have not thought about an individual’s ability to pay for expenses in the first instance.

Employees will always need to incur expenses, but they shouldn’t have to incur the debt nor the financial burden and consequential stress of paying for these upfront if they are not able to do so. We all know that this will only lead to lower productivity and will leave a negative impression of the employer.

Paying for expenses may or may not be an issue in your business – but where an employer is spending a lot of effort rolling out financial wellbeing initiatives, it is worth investigating whether the expenses policy could be undermining the whole thing.

The author is Dawn Lewis, content editor at REBA.