Regardless of their role in a business, employees should receive benefits that truly matter to them. This is common knowledge. Every individual has unique needs, and by offering flexible benefits – where employees choose where to spend their benefits allowance across predefined themes such as wellness, learning and more—companies can build high employee morale and a positive ‘at work’ experience. The mechanism of delivery already exists and recent Weavr research shows that 60% of UK-based benefits managers value it.
Happier employees don’t just contribute to a friendlier working atmosphere; according to one study, they can also be much more productive – 13% in the case of the one cited. It’s clear that benefits managers are choosing to prioritise providing benefits that enhance employee well-being and performance. Unfortunately, many still face difficulties in meeting this objective of finding relevant and truly flexible benefits for their teams.
Whether it’s because the benefit is difficult to use, the employee lives abroad, or the benefit simply doesn’t align with the person’s lifestyle (like offering a vegetarian a discount at a steakhouse), benefit managers often find themselves stuck between a rock and a hard place. On one side are the variety of demands, choices, and interests of employees, and on the other, the budget constraints imposed by tough economic conditions.
HR: BETWEEN A ROCK AND A HARD PLACE
Ultimately, HR professionals cannot afford to prioritise one challenge – let alone a multitude – over the other. Both employee demands and budget constraints must be addressed, weighed somehow proportionately and fairly, which is much easier said than done. It’s no surprise, then, that recent research from Weavr shows 50% of benefit managers are actively seeking new technology to meet the growing demand for benefits that are both easy to manage and budget-friendly.
While the challenges surrounding employee benefits aren’t new, they have been significantly heightened by the global shift to remote working. And with this paradigm shift, fortunately, a gaining number of innovative employee benefit providers are actively developing new ways for employers to grant employees allowances in addition to traditional benefits as a way of increasing flexibility and personalisation in the benefits mix. In this article, I’ll explore the key challenges facing benefit managers regarding employee benefits and explain how flexible benefits allowances can effectively address them.
THE CHALLENGES FACING EMPLOYEE BENEFITS
To begin, let’s consider the problems employees face with the benefits they receive, as employee demands are a primary concern for HR. Inevitably the first challenge HR teams have to solve is employees becoming fully aware of what benefits they are entitled to. The issues with many elements of traditional benefits offerings can then be summarised in two key points: first, there is friction that prevents employees from fully utilising the benefits, and second, the available benefits often don’t align with their individual needs.
Let’s look at an example of the latter point first. Take a free or discounted gym membership—a common employee perk. While this may seem like a great benefit in theory, if the gym is too far from an employee’s home or workplace to access regularly, it quickly loses its appeal and offers less value. Of course, the gym perk may not be relevant at all for those who don’t go to the gym or have a disability that the gym creates obstacles to.
For remote employees, especially those working in different countries from the business headquarters, this issue is even more pronounced. Recent research from Weavr revealed that 80% of surveyed benefits managers have staff working outside their HQ country, yet only one-fifth report that these employees receive consistent benefits. Currently, a huge 82% of benefits managers admit they lack the ability to resolve this problem.
There’s also an issue when there is a lot of friction in the length of time, details, and steps to fully taking advantage of benefits. Anything requiring the employee to spend their own money and claim discounts or reimbursements will likely be considered a ‘slog’. First the employee needs to read up on what the offer actually is, possibly including interpreting small print. Then to purchase something, the employee has to use their own money. Next, there will be an expenses-like claims process, and a wait for any reimbursement. Some cases may become drawn-out approval escalations or requests for additional paperwork. It doesn’t feel like a benefit because it’s not: it’s a hassle – and completely at odds with the slick experiences they enjoy from consumer apps.
DEALING WITH THE PERK-CESSION
The current economic reality is further amplifying these challenges for benefit managers. 27% of benefit managers reported to Weavr that cost pressures from the leadership teams within their business have reduced the range of benefits HR can afford, with some even dubbing this current period as the ‘perk-cession’. All of this is adding to the already complex set of issues faced by those overseeing employee benefits, and that’s before we even consider the inherent logistical hurdles of managing benefits schemes at scale.
Those of us in this line of work will be familiar with the complex processes that underpin many employee benefits management schemes. Simplifying and streamlining these processes would make the task far less daunting and the challenges easier to tackle for benefit managers – even more so for smaller companies with leaner people teams without a dedicated benefits manager. For employees, easier access to benefits (and simply an improved user experience of accessing benefits) could boost morale and, in turn, improve productivity. Moving forward, we should expect and hope that benefits should be as easy to use as paying for the things you need – just with it being funded by the employer, not out of employees’ pockets.
IT’S TIME FOR SPENDABLE BENEFITS CARDS
Enter spendable benefits cards, which offer a progressive approach to working around the limitations of traditional schemes. By offering the convenience of a payment card where employees can spend company funds within a rule-based allowance, the approach simplifies the process for everyone involved. In their benefits software and platforms, benefit managers gain significantly more time and choices to curate benefits on the basis of themes and budgets instead of predefined suppliers or marketplaces.
If employees can be empowered to choose where, when, and how they spend personal benefits budgets, the challenges of low engagement, relevance, administrative friction, and geographic limitations traditionally associated with employee benefits largely vanish. Employees can “shop” to create a personalised benefits mix composed of purchases, services, and experiences that matter most to them, no matter where they are in the world. Additionally, spendable benefits cards can unlock an interesting opportunity for employees to choose to not benefit themselves but instead pay it forward to others, e.g. charities or other individuals in the company. This action is something either completely disconnected and largely unavailable through traditional methods of benefits distribution. Overall, the appeal of spendable benefits cards is self-evident to HR and benefits professionals: Weavr found that 60% of UK benefits managers would value this kind of cards-based allowance in their benefit offerings.
Behind the scenes, how does this work? Some HR and benefits pioneers have taken matters into their own hands and virtually created fintech labs within their tech departments. But Weavr is pioneering an approach that’s accessible to non-fintech HR-tech and benefits product teams, with the heavy lifting already taken care of. Weavr’s embedded payments technology enables non-financial SaaS platforms, such as the benefits software most of us use, to integrate powerful, secure payment cards features into their products, experienced by their users seamlessly under their existing brand.
To learn more about spendable benefits cards and how HR and benefits platforms can leverage embedded finance, visit: https://www.weavr.io/spendablebenefits/
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