company-spending-statistics
Spend management 14 min read

90+ compelling company spending statistics and facts

Patrick Whatman

We take company spending seriously here at Spendesk. We're in the middle of massive changes to the way that businesses handle expenses, payroll, and money in general.

Automation and new payment methods are taking over, so stay tuned. 

But in this post, we want to take stock of company spending as it stands today. How do businesses really spend their money? We've put together nearly 100 statistics that will definitely get your attention.

As is customary, here’s an amazing stat that didn’t make the cut below: 82% of businesses fail because of cash flow issues. It makes sense - no cash means you can’t pay people or buy stock.

But fascinating, nonetheless.

Now lets dive into 90+ more interesting, insightful, and incredible statistics related to company spending.

Download the Spend Trends Report 2019

Payroll

Here’s a fun one to kick off this section: One third of all sick days take place on Mondays. That doesn’t have a whole lot to do with spending, but it’s certainly suspicious.

Payroll costs - specifically human labor - are usually the largest expenses for a business. People can easily account for 70% of your company’s spending.

So what does the average employee cost these days?

Salaries

For most companies, salaries are the largest expense. And naturally the amount in question depends largely on your industry and location.

  • The average full-time salary in the United Kingdom is £35,423. (findcourses.co.uk)
  • And Londoners make on average £10,000 more than those living in other cities. (City A.M.)
  • The average British account manager (sales) earns £52,500, PR pros make £37,799, marketing associates £34,180, and HR officers £31,994. (findcourses.co.uk)
  • The average full-time salary in Paris (France) is €48,717. Software engineers can expect to be paid €42,043, financial controllers €47,500, and business development managers €55,622. (PayScale.com)
  • The average salary in Germany is €46,560 per year, full-time. Specific industry averages are considerably higher, with banking and finance professionals averaging €83,371, IT workers on €72,582, and engineers making €71,134 per year. (Expatica.com)
  • In the U.S., physicians have the highest annual salary, followed by pharmacy managers and pharmacists. (Glassdoor)

Aside from salaries, managing payroll comes with other, less obvious costs. The time and effort it takes each month to ensure that everyone is paid can really add up.

Payroll management

  • 17% of small businesses commit 6-10 hours per month on payroll, while 11% spend more than 10 hours every month. (Score.org)
  • 54% of the American working population - 82 million people - are impacted by payroll problems. (Zenefits)
  • In one study, 20% of employers rely on spreadsheets to manage attendance, as opposed to more advanced modern tools. (Workforce Software)

And here’s an extraordinary statistic for companies considering modernizing their payroll tools:

Clearly, the more you can let the machines take care of menial tasks, the less you need to rely on people to get them done. And that means more room for people who add real value to your business.

Not just that, but automation tends to be a lot more accurate. And as it turns out, people make a lot of mistakes:

And those little errors add up:

  • 35% of an average HR team’s time is dedicated to payroll and error correction. (OnePoint HCM)
  • Reportedly, managing payroll manually leads to 100 human hours per year for every 25 full-time employees you have. (OnePoint HCM)

This is why payroll management software is expected to grow by 9% over the next six years. (Industry Reports)

Office expenses and team perks

On more of a day-to-day basis, companies also need to spend on items and services to keep employees happy in the office. At the small end, this can include drinks and snacks on a Friday evening.

But as employees start to get used to more elaborate perks, the importance of these grows for business owners.

  • 80% of workers would rather stay in a job with benefits than take one that offered more pay but no benefits. (American Institute of CPAs)
  • Rather than snacks and yoga classes, more Americans feel that contributions to pensions (401(k)), health insurance, and paid time off are the most enticing perks. (American Institute of CPAs)
  • In one survey, 77% of respondents said the opportunity to telecommute sometimes would make them more likely to sign a job offer. (Robert Half)
  • 86% of U.S. employers give financial incentives to employees who participate in well-being programs, with an average incentive of US$784. (Fidelity Investments)
  • Employers increased spending on training in 2017, up nearly 2% to $1,296 per employee. (ATD)
  • Eventbrite offers employees an US$80 wellness stipend, Microsoft hands out an $800 “StayFit” reimbursement to employees each year, and Airbnb gives employees $2,000 per year for travel. (Compt)

Many of these offers are beginning to move from “team perks” to becoming almost essential. Especially if companies want to attract the best talent available.

Taxes, legal fees, and startup costs

Another big worry for most businesses is the amount of taxes they’ll have to pay each year. This is closely tied to the company’s overall spending, and filing administrative expenses often takes up a lot of time.

Legal fees are another cost that every business hopes to keep low, but which inevitably blossoms when you least expect. And of course, this can go hand-in-hand with taxes - especially if your books have not been handled well.

  • The average British startup spends £22,756 in its first year on set-up and administrative costs. This doesn’t include payroll, product development, or marketing costs. (The Telegraph)
  • The above figure includes £6,259 for legal fees, £3,937 for accountancy, and £5,518 for company registration and other such costs. (The Telegraph)
  • One in three small businesses reports spending more than 80 hours per year on federal taxes, which include payroll. (Wagepoint)
  • And another ⅓ of small businesses is punished by the IRS each year for payroll mistakes, at an average penalty of US$875. (Zenefits)
  • 40% of small business owners state that bookkeeping and taxes are the worst part of owning their business. (Score)
  • 28% of small businesses report spending more than US$10,000 per year on taxes, legal fees, and associated costs. (Score)
  • The average spend on legal fees for companies is 0.38% of total revenue. (Hurley Gunsher)

While hopefully this isn’t something you’ll have to worry too much about, legal fees and taxes can be a significant burden on many companies. And it can pay to plan ahead.

Marketing and advertising spending

For many modern businesses, growth is the biggest challenge. And in order to spur this growth and build brand awareness, companies dedicate significant sums to marketing and advertising.

  • In fact, marketing budgets equal 11.2% of company revenue on average, and have been mostly steady in recent years. (Gartner)
  • Gartner also found that nearly one third of marketing budgets (29%) is spent on tools and technology. This number is now higher than marketing labour costs:
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Image: Gartner

Let’s turn our attention now to some specific aspects of marketing common in many modern companies.

Content marketing

Content is an incredibly popular tool to generate interest in a brand’s products and services. Using blogs, video, and social media, marketers dangle enticing content in front of potential buyers, and let customers come to them.

And this approach is undoubtedly growing.

  • Content marketing was projected to account for more than US$300 billion in revenue in 2019. (Statista)
  • In one survey, 93% of the most successful B2B companies were very or extremely committed to content marketing. (Content Marketing Institute)
  • The same study found that 77% of the most successful businesses rely on buyer personas for content marketing, compared with only 36% of the least successful. (Content Marketing Institute)
  • In 2018, 71% of B2B customers said they read blog content before buying. (Demand Gen)

Digital advertising

Thanks to now-essential marketing channels like search and social media, digital advertising is perhaps the fastest-growing technique in the marketing world. And it’s no flash in the pan - companies are committed to spending large sums on paid search and social.

  • Global spending on paid digital marketing was estimated to be around US$100 billion in 2018. (Reuters)
  • Businesses spend on average 21% of marketing budgets on advertising, with two-thirds of that advertising money now spent online. (Gartner)
  • Paid search advertising spend is growing 10% year-over-year. But click-through rates have fallen overall. (Search Engine Journal)
  • In fact, digital advertising is now worth US$30 billion more per year than television advertising. (Brafton)
  • Nearly 20% of all advertising spend worldwide goes to search platforms. Google obviously dominates this field, and this doesn’t even include paid social. (B&T)
  • In Europe, companies spend the most on Google ads, followed closely by Facebook and then LinkedIn. (Spendesk)
  • From our own Spend Trends report, the above three companies are also among the 10 most expensed vendors for business costs overall. In fact, our study found that after Amazon, companies spend more on Google and Facebook (respectively) than any other suppliers. (Spendesk)
  • In the United States, 38.6% of digital ad spend goes to Google, and Facebook sees 19.9%. Between them, these two companies account for more than half of all online advertising money. (Wordstream)
  • One often overlooked advertising platform: Amazon reported over US$10 billion in ad revenue in 2018, up 95% from the year before. (Geekwire) Amazon is already the most-expensed vendor for European businesses, and this shows no signs of slowing down.
  • Google’s chief economist estimates that businesses make $2 for every $1 they spend on Google ads. (Google)
  • The average cost-per-click on Google’s search network is US$2.69, while that number is only $0.63 on the display network (on-site advertisements). Interestingly, the legal industry has the highest average cost-per-click at $6.75 for search ads. (Wordstream)
  • U.S. companies spent more than US$13.23 billion on digital video ads in 2017, and that number is expected to exceed $22 billion by 2021. (eMarketer)
  • 18% of total Facebook spend went to Instagram, with 34% of that Instagram spend on Instagram Stories. (Search Engine Journal)

Clearly digital advertising is an enormous and still-growing market. But this doesn’t mean that non-digital marketing is dead in the water.

Events

With the advertising and content marketing spheres feeling flooded, many businesses are turning to in-person meetings and trade shows to put a face to their products.

  • In 2017, global spending on business events reached more than US$1.07 trillion USD. (Events Industry Council)
  • The average event attendee spends US$704 for each event. (Events Industry Council)
  • The median amount spent by businesses to sponsor an event is US$20,000. (MarketingCharts)
  • In one survey, 84% of C-Suite executives stated that they feel that in-person events are essential for company success. (Bizzabo)
  • The success and scale of global business events has directly created 26 million jobs. (Events Industry Council)
  • One survey found that 41% of marketers feel that events are their best channel, ahead of content marketing (27%) and email (14%). (Bizzabo)
  • The above survey also discovered that 62% of marketers intended to increase their event budget moving from 2018 to 2019. (Bizzabo)

As mentioned above, businesses are working hard to grow. Whether that means more digital ads, investing in content, or attending events, marketing budgets are a major factor for most companies.

Business travel

We previously wrote a deep dive on business travel statistics. Here are the highlights from that piece:

  • Companies spent US$1.33 trillion on global business travel in 2017. (Statista)
  • That number is expected to reach US$1.7 trillion by 2022. (Statista)
  • Americans spent US$317.2 billion on business travel in 2017, compared with US$718.4 billion for leisure travel. (U.S. Travel Association)
  • 90% of respondents in this survey felt that travel was essential to business growth. (TripActions)
  • 57% of work travellers would prefer to book with a single app or tool. (Booking)
  • 30% of those who fly for business do so every single month. But 62% of flyers only take wing once a year. (Fly Aeolus)
  • North American companies expensed more Uber trips than payments to any other company. (Business Traveller)
  • Meanwhile French and British companies now take twice as many Uber rides as taxi trips. (Spendesk)

To learn more about how companies spend on travel, download our new Spend Trends Report:

Download the Spend Trends Report 2019

Tools and subscriptions

Another trend that shows no signs of slowing down is the growing reliance on SaaS (software as a service) tools. These platforms give companies top-quality solutions for everything from CRMs to spend management, without having to build them themselves.

This is usually more convenient, faster, and more affordable overall than the alternative. No wonder they’re so popular.

  • The average medium-sized company spends US$20,000 per month on SaaS tools. This number is projected to grow 118% by 2020. (Blissfully)
  • Annual SaaS spending worldwide is expected to surpass US$85 billion by the end of 2019. (ZDNet)
  • The average company changes its subscription stack by 43% every year. (GlobalDots)
  • The average company spends US$343,000 per year on SaaS tools. (Blissfully)
  • Spending on marketing automation tools is projected to exceed US$25 billion by 2023. This will grow from US$11.4 billion in 2017. (Forrester)
  • 55% of CMOs plan to increase spending on marketing technology in the next year. (Marketing Dive)
  • Artificial intelligence is likely to grow even further, hitting more than US$52 billion in 2021. (Marketing Dive)
  • In the past, companies would host their own customer relationship management (CRM) tools in-house. In 2019, 75% of CRM software spend goes to cloud-based technology, usually on a subscription basis. (Gartner)
  • Cloud-based sales CRMs now account for 84% of spending on sales CRM deployment. (Gartner)
  • SaaS tools are deployed by virtually every business team, led particularly by engineering and sales:

 

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Image source: Blissfully

The “SaaS revolution” is in full swing, and this market only promises to grow further.

Research and development

Another interesting area for large businesses is their investment in innovation and research. While not all companies have the luxury of dedicating huge sums to these pursuits, they can be the difference between exceptional growth and being overtaken by the competition.

  • Global R&D spending is now almost US$1.7 trillion per year, with 80% of that coming from just 10 countries. (UNESCO)
  • The United States sees the highest proportion of investment in research and development coming from its business sector. 71.5% of American R&D spending comes from businesses. (UNESCO)
  • In Germany that number is 67.7%, in France it’s 63.6%, and in the U.K. 65.1%. These countries are all in top 8 for total R&D spending in the world, with the majority of that spending coming from businesses. (UNESCO)
  • R&D costs have dramatically overtaken advertising spending for the world’s largest brands. (HBR)
  • Amazon spends far more on research and development than any other company. The amount spent surpassed US$22.5 billion in 2018, $6bn USD more than second placed Alphabet. (Strategy&)
  • Countries in the European Union spent more than €320 million on R&D in 2017 - 2.07% of total GDP. (ec.europa.eu)

Company spending matters

As we've seen, companies spend huge amounts on everything from marketing to taxes. New tools are emerging, businesses are investing more in office perks, and travel is growing quickly too. 

But managing all this spending is still a challenge. And that's what we're here to fix. 

If you'd like to learn how to give your team more flexibility and freedom, while also gaining more visibility and control over your spending, talk to us:

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Patrick Whatman

Patrick Whatman is a content marketer and writer. He lives in Paris, loves music, and writes his own brand of cultural criticism for fun. Tweet him @mrwhatman where he mainly talks digital marketing, American sports and New Zealand trivia.