Firms Must Empower Employees Financially or Risk Missing Growth Opportunities Finds Soldo

Spend management provider, Soldo has revealed that restricted budgets are hindering growth potential and causing financial leaders to miss growth opportunities. 

Despite 78 per cent of senior finance leaders saying they’d trust employees with company funds, many are still hesitant to grant direct access, resulting in a productivity bottleneck according to the Soldo findings. One of the primary reasons for this is a perceived lack of employee understanding around finance policies (35 per cent), resulting in over half of UK employees (54 per cent) admitting to bending the rules to gain access to company funds.

The research, conducted amongst employees and finance leaders, highlights the critical impact that restricting budget access can have on hindering growth potential. Of the 88 per cent of senior finance leaders who reported missed opportunities in the past 12 months, many note substantial financial consequences, including financial losses (39 per cent), loss of existing customers (38 per cent), and delayed product or service launches (39 per cent).

Brandon Till, head of transformation at Soldo says: “Everything in a business needs money, and when you don’t empower employees by putting it in their hands then, put simply, things don’t happen. The cost? Growth. This is demonstrated plain and clear by our findings.

“By empowering employees to make responsible decisions with their own budgets and freeing up financial leaders with the tools to proactively manage decentralised spending , organisations can quickly operate with greater efficiency and confidence.”

Slowing things down

Additionally, nearly half of employees (48 per cent) say interactions with finance have slowed projects, with 31 per cent pointing to slow response times from finance, and 21 per cent noting a focus on cost-cutting at the expense of growth.

One in six finance leaders also spends six or more hours a week managing admin related to decentralised spending, with 59 per cent admitting that adjusting budgets as business priorities shift remains a significant challenge.

Meanwhile, almost three-quarters (73 per cent) of finance leaders report that overly complex financial processes slow down or prevent them from helping employees in the pursuit of new business opportunities. They additionally revealed that finance teams are frequently facing surprises at month-end (60 per cent), which pull focus from growth strategies.

How can this be changed?

Empowering employees by improving their access to company funds could reshape business growth strategies through increased productivity. According to employees and finance leaders, primary benefits included:

  • Increased employee motivation and proactivity: 39 per cent of senior leaders say motivation would improve, while 35 per cent predict a rise in proactivity and agility. Furthermore, 36 per cent believe it would increase job satisfaction for employees.    –
  • Enhanced productivity: 40 per cent of employees believe their productivity would increase with easier budget access.
  • -Strengthened finance-business relationship: Greater budget flexibility could bridge gaps in finance collaboration with the wider business. Thirty-six per cent of finance leaders and 22 per cent of employees predict relationship improvements through better access.

When company spend is decentralised – i.e. not funnelled through a centralised procurement process – finance teams lack timely and real-time visibility into what spending has occurred and must deal with increased administrative burdens for the entire finance team at month-end, as well as a higher risk of overspending or financial surprises.

Till concludes: “After all, controlling costs, increasing productivity and sustaining growth aren’t just important, they’re critical survival factors. With a progressive approach to spend governance, businesses can spot inefficiencies,  eliminate waste and accomplish more.”

The post Firms Must Empower Employees Financially or Risk Missing Growth Opportunities Finds Soldo appeared first on The Fintech Times.

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