Giving employees “pots” of money that they can spend on an approved menu of benefits is popular in Asia, and employers in Europe want to offer these “spending accounts” to staff too. Cath Everett reports.
It seems like the latest thing in Asian employee benefits has now hit European shores.
So-called “spending accounts” have been prevalent in the region for the last four or five years, with as many as seven out of 10 large organisations using them.
These accounts are essentially pots of money assigned to workers based on their roles, which can be spent on any approved benefit they like from medical expenses and gym membership to learning and development.
The money can even be used for “spot” recognition schemes to give star workers a meal for two, a £50 voucher or a similar small reward.
And very popular they are too, mostly because employees, particularly those in organisations where four generations are working side-by-side, really like the choice and flexibility that they offer.
Not only can the pot be dipped into at any time during the working year, but it can also be accessed via a range of different devices, ranging from PCs to mobile phones.
Moreover, employees seem to appreciate it more than traditional deferred benefits, such as pensions.
As Charles Cotton, performance and reward advisor at the CIPD pointed out in a recent report, Show me the money – the behavioural science of reward, most employees tend to simply forget the significance or value of their benefits unless they are right under their nose.
“Workplace pension schemes boost employee pay packets by thousands of pounds over the course of their employment, but without the instant gratification of seeing that money land in their bank accounts each month, many employees fail to value the schemes,” explains Cotton.
Coming to Europe
Spending accounts have also proved a hit with employers, however, not least because of the appeal of being able to put a cap on costs, which includes the rising medical expenses associated with an ageing population.
One of the suppliers that has “repurposed” the idea and brought it to Europe is Thomsons Online Benefits, a software-as-a-service vendor.
International law firm White & Case has already signed up to take its Spending Account Manager (SAM) offering, which was formally launched in the UK at the HR Tech Europe show in March. But the company is also deep in conversation with another dozen or so about following suit.
As a standalone service with mobile access, SAM costs between £5 and £15 per person depending on the number of users, but the price rises to between £30 and £35 if integrated with Thomsons’ flagship Darwin employee benefits administration system.
Thomsons also plans to release a predictive analytics service towards the end of this year. This will examine clients’ customer data and advise them as to what benefits might appeal to employees belonging to certain demographics or locations.
Andrew Bradshaw, the company’s chief operating officer, says: “It would be a bit like Amazon. So if a life event took place such as a birth or marriage, the service could be used to suggest what benefits might interest them.”
And, next year, such personalisation options will be enhanced further, with companies being able to set up user accounts based not only around staff roles, but also their demographics and location.
With pay growth still at a snail’s pace, being able to offer personalised reward at a manageable cost is likely to have a high appeal.