Australian firms struggle with changing employee spending habits

Australian organisations are grappling with changing employee spend habits, with increased travel, entertainment and office expenses creating challenges. This is according to research from SAP Concur which provides insights into spending habits between 2019 and 2023.

"Recent spending trends have highlighted a shift in behaviours and working conditions that reflect broader economic and social changes. The evolving nature of work has changed how and where employees are spending company money, forcing executive leaders to rethink their approach to travel and expenses (T&E) management and drive greater agility and adaptability in corporate policies," says Jonathan Beeby, managing director, SAP Concur Australia and New Zealand.

The key research findings reveal that the average expense cost has increased by 20% across air travel, car rental, entertainment, gas, office expenses, and parking – an outcome attributable to inflation and rising expenses. The average cost of train travel has bucked the trend, decreasing by more than 30%, making it an economical alternative for business travel. Additionally, while total parking spend decreased by 18%, total car rental spend rose by 6%.

Changing patterns were also evident in air travel and office spend. Air travel decreased in terms of both total spend and volume of transactions, signalling a shift in business travel behaviours nationwide. Office spend, however, increased by 50% between 2019 and 2023, reflecting the change in working environments.

Beeby further noted, "The diversification of expense categories, including increased spending in remote work setups and digital communication and collaboration tools, indicates a broader range of needs as employees adapt to new ways of working. This reflects a deeper transformation within the business landscape, where flexibility and digital readiness have become key drivers of competitiveness and employee satisfaction."

The research from SAP Concur underscores the value of having access to current trends in spending, enabling organisations to benchmark their expenses against local and global shifts, and identify opportunities to optimise processes and save costs.

Companies can better manage their expenses through sophisticated, artificial intelligence (AI)-enabled T&E management solutions. Such solutions can automate and streamline expense reporting processes, detect patterns and anomalies in spending to prevent fraud, equip leaders with predictive analytics for insights into future spending trends, and simplify the reimbursement process to optimise spending and enhance employee satisfaction.

"Modern T&E management solutions integrate real-time data and predictive analytics to identify cost-saving opportunities and recommend the most economical and sustainable travel options available. Australian organisations must adopt solutions that offer greater flexibility and detail in tracking and analysing expenses to better understand regional and global spending trends and use this to their operational advantage. With the right tools and approaches, companies can achieve a balance between controlling costs and supporting their employees' needs in an evolving market," Beeby concluded.