Christmas in the workplace can mean several things. From the good (bonuses, parties and employee Secret Santa) to the bad (cold commutes, hangovers and, well … employee Secret Santa). And when it comes to the ugly, there’s the matter of workplace expenses.
While expense management is a year-round problem, new research from Pleo shows that 76% of employees report a spike in work-related costs during the Christmas period. What’s more, over half (52%) pay double the usual expense amount.
The festive season is typically a time for giving, but employees can’t be expected to make such financial advances on behalf of their employers. Especially when there’s no telling how long they’ll have to wait to be reimbursed. Left unaddressed, outdated expense policies will create a situation where employees are not just out-of-pocket, but out of patience too.
With this in mind, what can organisations do to ensure they aren’t unintentionally leaving their people shortchanged this Christmas?
The strain of festive payments explained
Stress related to workplace expenses is nothing new. But in December, the average Christmas spend per person varies from £700 to just under £1,000 depending on where in the UK they live. Adding any extra expenditure to this is bound to take its toll, especially when the cost of living is skyrocketing in the UK.
Inflation is expected to hit 3% in 2025, while Ofgem has already announced that the average energy bill will increase by 1.2% from January. This means that a lot of employees will be tightening their belts next year. However, our research found that because of increased work expenses around Christmas, almost half (45%) rely on credit or overdrafts. While over a third (37%) have had to cancel personal plans in the past – with almost half (45%) concerned they won’t be able to afford gifts or festive drinks, dinners and pantos this year.
It’s true that many businesses have expense and reimbursement processes in place. But these are often time-consuming – something that gets worse during the holiday period, with almost half (47%) experiencing longer wait times to be reimbursed. The outcome of this is that the personal lives of employees will be impacted dramatically this Christmas, with employers unintentionally putting many in tricky financial spots.
What companies stand to lose going into 2025
While employees are the ones being left shortchanged today, in the long-term, it’ll be employers that lose out. That’s because employees are growing increasingly frustrated with current expense policies, with more than half (56%) saying that advancing money on their employer’s behalf is outdated. Further, more than a third (36%) of employers go as far as saying they have clashed with their employers over reimbursement timelines in the past.
No wonder then that half (49%) of employees are hesitant to pay up when it comes to workplace expenditure. Not a good look for the company when it comes to client entertainment or paying for crucial workplace activities and subscriptions. Leaders must move quickly to fix this issue or they risk frustrating their employees beyond the point of repair.
Why outdated expenses don’t work for anyone
In addition to the impact expenses are having on employees, businesses will find they also impact their ability to understand spending – meaning they go into a new financial year with partial visibility.
Tracking and managing spending in real-time is a must-have for businesses going into 2025. The more unpredictable the outside world becomes, the more predictable businesses need their financial outlook to become. But with outdated expense policies, workplaces are derailing their budget and cash flow. What’s more, they’re failing to achieve the peace of mind that comes with modern-day company systems.
At a more practical level, if employers continue to rely on antiquated expense policies, they are not just wasting their team’s time chasing down payments, but their finance team’s time chasing down receipts and getting into tangles with colleagues. This means mission-critical work falls by the wayside and finance, instead of becoming democratised, transparent and accountable, ends up being more like a traditional family Christmas dinner: fraught with tension and finger-pointing.
Giving the gift of control this Christmas
Asking employees to dip into their own pockets to cover workplace expenses isn’t just a financial burden for organisations – it’s a serious wellbeing one. Leaders need to take a long hard look at how they are managing expenses and focus on increasing support, not pressure.
The current approach to reimbursements isn’t working, and there are solutions in place that can create systems that empower teams and reduce the strain on finance professionals when they’re already stretched. This is how we can foster a more positive, productive work environment that is increasingly resilient and fair – something that employers and employees alike will want to find under the tree this festive season.
