One of the tactics more organizations are using in their all-out quest to attract and retain employees is bolstering their perks programs. Understanding that salary and benefits only go so far in keeping employees motivated and content, HR and benefits leaders in many industries are expanding their nonwage offerings like wellness stipends, flexible work arrangements, student loan repayment, family formation benefits, pet insurance and more.
But the reality is, even the best perks programs won't succeed if the stipends aren't easy for employees to use, if workers remain unaware of what's available to them or if the administrative burdens of managing perks prove too onerous for small HR teams. Such issues can lead to low utilization rates, poor ROI on perks stipends and missed opportunities to use fringe benefits to help retain workers.
More Personalization, Less Red Tape
A need to address these challenges is one reason why some HR leaders have begun using a new breed of perks technology platforms. One such leader is Stacie Justice, head of people operations for IZotope, an audio technology company in Boston, who chose to partner with perks platform provider Compt with the goal of providing more personalized perks options for IZotope's global workforce while also reducing HR's administrative workload.
The platform allows Justice to give employees more of a say in choosing perks that resonate with them. "We wanted to personalize and globalize perks for our workforce because our approach had been too regional in nature," Justice said.
Administering a perks program can be challenging when a company expands internationally, she said, with different currencies, tax laws and requirements like compulsory benefits. The Compt platform helps her address those challenges.
Giving employees more choice in perks is also proven to boost utilization rates and help improve employee retention. For example, experts say employees often define wellness in different ways, and providing varied perks options for physical, mental or financial wellness means more needs get met.
"You can get really high engagement when you double down on the personalization of perks for employees," said Amy Spurling, co-founder and CEO of Compt. "Strong engagement shows employees are using perks in ways that matter to them and that you're also making it easy for people to access the perks they want when they want them. It's important to have perks that align with your company culture and values but that also can be personalized to employee needs."
HR leaders say another advantage of these new technology platforms is an improved ability to track perks spending across the organization and use that data to inform future decisions.
"When you put money into an employee's paycheck for perks, you don't always know exactly what they're spending it on," Justice said. "With the new platform, employees submit receipts that are documented through the software, so we have more insight into what stipends are being used for."
That enhanced visibility enables Justice to more easily identify trends and adjust perks offerings for greater appeal and cost-effectiveness. "As one example, when we saw growing usage and demand for individual Peloton memberships among employees, it convinced us to create an enterprise membership account for Peloton and offer discounted rates to our people," she said.
Value of Perks Consolidation, Self-Service Tools
Benepass is another next-generation perks technology platform that can personalize perks offerings, curtail the number of perks vendors and reduce HR's administrative burden.
The technology consolidates an organization's pre-tax perks and company-funded stipends onto a single platform and gives employees a mobile app and web portal to track their perks spending, request reimbursements and monitor balances. Employees also receive a virtual Benepass Visa card with their company-sponsored perks funds to use at preferred merchants.
"We wanted to create a simple, easy-to-use, consolidated platform," said Jaclyn Chen, CEO of Benepass, which is based in New York City. "It allows companies to build perks programs that support their culture and values but also provides the flexibility so employees can choose perks that matter most to them while reducing the red tape of perks administration."
Consolidating access to all employee perks options on one platform can have hidden benefits, Chen believes. "Oftentimes, employees don't even know what benefits or perks they have available to them," she said. "People might come onto the platform intending to pay for one of those perks but then see all of the other perks available to them. It's a good reminder of what they have access to in total."
Elspeth Arnold, human resources operation manager for Automox, an IT operations platform provider in Boulder, Colo., chose to partner with Benepass with the goal of improving the appeal and utilization rates of her company's perks program. She also was attracted by how the platform might make tax compliance and stipend management easier for her staff.
"Perks like gift cards are challenging to track and often don't get used," Arnold said. "This platform makes it easier to recognize employees with a monetary reward of any amount. Employees can use their perks anywhere that accepts the Benepass Visa, but unlike a gift card, we don't actually spend the money until the employee purchases something. It also makes it easier to track spending, and compliance related to taxing employees on perks is a breeze."
Reducing Tax Compliance, Administrative Workloads
Platforms like Compt allow companies to more easily categorize which perks are and aren't taxable, move beyond using unwieldy spreadsheets, and eliminate manual work by integrating perks transactions directly into payroll systems.
"It allows both HR and finance to have time back on their calendars since they're no longer dedicating so many hours to doing tax tracking or vendor management," Spurling said.
Justice welcomed the new tax compliance features of the platform. "It simplifies payroll processing around perks and reduces the amount of manual effort required to reimburse employees for things like one-off expenditures," she said. "We also have different global payrolls, and the platform makes it easier to produce multiple stipend programs across the different countries where we operate."
Employee self-service features on platforms like Benepass also can save HR time in having to answer employee questions around perks programs. Workers can use those tools to get faster responses to their queries.
"Employees typically have questions like how much is left in their annual perks balance or how to sign up for a perk like a gym membership," Chen said. "Those questions are answered inherently by features on the platform."
Dave Zielinski is principal of Skiwood Communications, a business writing and editing company in Minneapolis.