Blog, Employee Benefits
The wellbeing case for spending accounts
Every day, employee benefits are evolving. When we add a global lens, this quadruples. Undoubtedly, the continuous development of global benefits has been accelerated as a result of the pandemic and a move towards a new, hybrid world of work. Flexibility and choice are key ingredients of your global benefits strategy. However, when you’re responsible for 10+ countries with varying benefits, historical differences due to acquisitions and of course a limited budget, where do you start?
In this blog, we’ll take a look at a solution that is increasingly popular, thanks to its flexibility and very light administration…
The case for spending accounts
In the US and Canada, most people are familiar with various spending accounts as employee benefits: Health Savings Accounts (HSA) allow employees to pay for medical treatment not covered by medical insurance. Flexible Spending Accounts (FSA) are also common, often used to cover costs associated with dependent care, due to the rules around their use and associated tax legislation.
Elsewhere in the world, we had previously seen spending accounts used for really varied benefit offerings. One of note is the Festive Fund in Ireland: employees contribute throughout the year before withdrawing their savings in November to help pay for the festive season. Other big spend items we’ve seen spending accounts used for include holidays, school fees and towards a property deposit.
In Singapore, we saw one customer using spending accounts in a way that meant any flex budget that employees didn’t spend on their benefits would be automatically added their spending account. This could then be used for small cost health-related items not covered by their medical insurance plan, e.g. a health screening, Chinese medicine, vision costs and health supplements/vitamins.
At Benefex, we’ve always believed savings account present an efficient, light-touch and low-admin way of providing benefit choice to employees – so it’s no surprise to see their use increasing. Furthermore, there is a flexibility to allow differing funding methods: spending accounts can be fully employer-funded, run independently on employee contributions or a mix of employer-employee. Meaning, you don’t necessarily need to find a huge sum of money in your benefits budget in order to offer a benefit that provides great flexibility for employees.
Bring wellbeing into the new world of work
With employees moving towards an increasingly-hybrid presence, we’ve seen companies review and replace some of their traditional benefits globally with a tailored spending account. One of the most common swaps we see is gym memberships being switched out for health and wellbeing spending accounts.
Rather than just offering a gym membership for the specific gym located near the office, companies can open up their provision to employees. With such wide range of choice in the wellbeing space, and with companies keen to promote both physical activity as well as relaxation, finding a hybrid-enabled benefit to replace gym memberships was a challenge. Now, a growing number of our customers are using spending accounts where an allocation is given to employees to spend how they wish – subject to certain parameters, which may be tailored to be country-specific.
In some locations, this choice may be more weighted towards leisure activities than sport where encouraging employees to take time out is of key concern. For instance, family-based allowances as a benefit are also on the rise, with days out and theme parks trips already common in parts of Asia where employees are encouraged to take time out to help rest and relax.
During the pandemic one of our customers even widened the range to allow employees with children to purchase large garden play equipment! Although a little unusual, it demonstrated how a flexible tech-based solution enables businesses to react quickly and respond to employee needs, wherever and whatever they are.
A sustainability focus
Taking this one step further, customers who are aligning benefits strategy with their corporate aims are using spending accounts to both promote benefits and engage employees on sustainability offerings in the form of eco-friendly allowances. Employees all receive a pot of money through benefits spending accounts that they can use for a green initiative – this could be a public transport pass, an e-scooter, energy or water saving devices, or donations towards environmental charities. Historically known as an Eco Allowance in Belgium, this way of using spending accounts is now rapidly gaining traction on a global scale.
With commuter allowances and season ticket benefits now appealing to a smaller number of employees due to hybrid working, new benefits of home worker allowances are rising in the ranks. These take the form of a pot of money that employees can use to pay for a commute (rail ticket) to the office or perhaps for parking. These function as a way to encourage those now working from home to attend the office for meetings regularly and spent more time with colleagues.
Taking this one step further, organisations can be both competitive and innovative by using spending accounts in creative ways – for instance, why not use the holiday allowance you provide to employees to pay for benefits via a spending account.
As part of your global strategy, you’re probably looking at how to implement wellbeing globally, while still considering the local nuances. With an allowance approach like spending accounts, this you can tailor the amount and the parameters around it to be both relevant for the employees, and right for the local market.
Even before Covid-19 and widespread home-working, I remember a customer saying that, in their opinion, employer-paid gym membership did little to encourage employees to be active, only paying for those who would be going to the gym anyway. Now is the time to change this and engage employees by giving them choices with their wellbeing allowances, no matter where they are or what their circumstances.
With global benefits evermoving towards more choice and flexibility, spending accounts offer a ready-made solution for employers to engage across a new range of exciting benefits without the headache of extra administration.