Control Company Costs
Why HR Professionals Should Put Employee Spend on Their Radar
The great resignation, big quit or whatever term you use is impacting HR leaders to not only ask finance for more resources to recruit and keep talent, but also engage finance to ensure employees are happy with their current expense and travel processes and tools.? In addition, HR is getting a seat at the table around how companies are capturing how employees are spending company dollars since it’s impacting some key areas of HR. Only 26% of companies feel they have a very or completely effective at managing T&E compliance according to an Oxford Economics study. HR can lend a hand here. ?
Why does employee spend data matter to HR?
Accurate and up-to-date travel and employee spend data enables the business to uncover information that can help mitigate these three key enterprise risks where HR plays a pivotal role:?
- Duty of care
- Interstate and global tax compliance
- Employee experience
However, not all data that can help with these issues is created equal across an enterprise.
On the radar: Duty of care
Managing the health and safety risks of employees traveling or living abroad is on the global radar for many companies. Since the COVID-19 pandemic, this risk has elevated, making it an even bigger moral and legal obligation for employers. To help offset these sudden, profound risks, many of our customers are utilizing the TripIt Pro app which puts health and safety information into the hands of travelers as they prepare and land in a new destination. This is the most advantageous timing as most assistance providers send this information to travelers when they book the trip – which could be months before their take off. In addition, companies must now know in advance where their employees are heading or residing. Pre-travel approval requests can help give companies the information they need sooner, rather than later, to weigh risks, travel options, and safely conduct business. Once the trip is pre-approved, travel itinerary information can then be placed into a tracking solution that helps monitor the traveler’s location. Our duty of care partners even provide solutions that allow the organization and traveler to remain connected, in the event of an emergency, with texting capabilities that can send helpful tips and relevant information to escort the employee back to safety.
What can HR do? HR is truly at the center of managing an employer’s duty of care and part of that obligation requires employers to do their best to prepare, track, and inform employees of any medical or security risks that they may encounter. Having an entirely connected spend management solution that’s integrated with your duty of care protocols allows organizations to move quickly when needed and accurately pull in additional data that’s booked outside of corporate managed systems – direct from suppliers like IHG, Starwood, Uber, or Airbnb. Data from HR systems can also be placed into a tracking tool to ensure better quality. For example, in the event of a crisis, the security team needs accurate phone numbers to text or call an employee and HR data can help ensure that it’s optimal.
Mitigating the tax trap: Interstate and global tax compliance
The remote work environment has really thrown a wrench in to interstate and global tax compliance. More employees are traveling and working on the go and governments are getting more savvy:
"COVID-19 opened the possibility for employees to work from anywhere," said Nishant Mittal, senior vice president and general manager at Topia, which makes software for managing remote workers. "This introduces new concerns when it comes to legal and tax compliance."
If a business has in a state different from where the business is physically located or operates, it could face unexpected state and local taxes next year. Remote workers also could find that they'll need to pay income taxes to more than one state on the same earned income. Employers can take steps to help manage cross-border taxes on the business and to help employees understand their own tax obligations. First, however, business managers must understand the tax laws of their home state and the state where employees are working remotely.
What can HR do? Quite often, HR and global mobility have a role in mitigating this risk, especially with expatriates. As companies try to fine-tune their policies and processes with various solutions and stakeholders, it has become evident that visibility to reliable travel data and advanced tracking capabilities are key to mitigating this risk. Many companies are searching for a “single-source of truth” around this area so proper risk assessment, analytics, and recommendations to the business can be made for mitigation purposes.
Improving morale: Employee experience
Anyone who has struggled with a tedious expense report or waited weeks to be reimbursed for a travel expense, understands why getting the technology and processes that support these practices right is so important. Respondents in a Forrester study, 476 finance, IT, and HR decision-makers, agreed that the tools which employees use on a regular basis are critical to enabling good employee experience. Specifically, 63% name travel and expense (T&E) management software as one of the most important tools when it comes to good employee experience.?While effective T&E enablement is critical for financial governance, making the process effortless is also critical for employee experience and productivity. Overall, it leads to better engagement and increased customer experience, which furthers financial performance.
What can HR do? An engaged, connected team is critical to leading your business through change. During this time, it’s important for HR leaders to evaluate every process and tool that affect employees and reimagine the experience. By making little improvements outside traditional HR, you can make a big difference on your employees’ experience – boosting both morale and productivity. For example, at one point or another, virtually every employee must tackle expense reports, wrangle receipts, or book travel. These are necessary tasks that can be a significant source of frustration, but they don’t have to be. Organizations can make sure employees have the right technology and tools to support business continuity.
A single-source of truth
As HR aligns more closely with stakeholders from travel, procurement, finance, accounts payable (AP), and outside suppliers, they need to ensure that the data they are analyzing is reliable, consistent, and inclusive before a change in procedure or policy to the business is made. Here are three questions HR can ask others to ensure that the data that falls into the travel, expense, and employee spend areas is accurate and connected:
1. Are we making it easy for employees to book travel or report spend with digital tools or is it an administrative nightmare?
Employees today expect mobile, consumer-like experiences at work. Thus, “going digital” in the workplace is often a corporate initiative. If a company is not delivering the tools and functionality employees want, and instead thrusting a frustrating, inefficient process on them, then companies will have trouble capturing accurate travel and spend data. Essentially, you must meet the employee where they are currently at: of over 7,800 global business travelers, 67% of them say their company lags in the technologies that make travel easier. Specifically, 66% want better information and 65% want more convenient tools.
2. Are we using new ways to capture all employee travel outside of our traditional?corporate travel?processes?
Despite strict travel policies and procedures, it’s hard to change employees’ booking habits – and it’s because, to some employees, travel can feel personal. ?Whether for convenience, cost, or business need (and getting reimbursed for it), there’s most likely a “leakage” issue that exists in every company. Travel suppliers are also fueling this missing data, putting millions of dollars into clever marketing and loyalty programs that encourage your employees to buy directly from their service. Fortunately, modern technology can help companies uncover this “leakage” and reconcile it with actual spend without chasing the traveler or pushing another policy on them.
3. Where is the data?
As we look at how employees are booking travel or spending company dollars, there’s a real disruption and shift taking place even in the forms of payment. Employees are spending?more?money across?more?spend categories, using?more?payment methods than ever before. This includes contactless credit cards, ghost cards, checks, cash, P-cards, and even more. The down-side is, it’s highly likely that these payment methods are managed by multiple systems that don’t connect or share data across the organization. Ensure your company is connecting the travel and expense data, so you are getting a big picture view of actual travel and spend in one place for a proper analysis to take place.
If your company is failing to capture travel, expense, payment, and other spend in one place, then perhaps HR can take a lead role or lean on those in the organization to do so. Using employee spend data to help guide important budget decisions may be one initiative to consider and drive internally. To learn more,?visit us online.
