Employee benefits platforms have changed over the years – they’ve gone mobile, they’ve got smarter insights, slicker automation – but it’s been a while since you could say they’ve undergone transformation.
Now though, the spark for a fiery transformation has been lit by embedded finance. And it’s a welcome and timely development for benefits managers.
If you play a role in designing benefits software, our research paper makes some sense of the rock-and-hard-place position benefits managers are in – as well as how you can use embeddable finance features to rescue them from endless compromise.
Employee benefits really do need a new flexible model
Weavr’s recent survey of 250 benefits managers, all supporting companies with 50+ employees, revealed what benefits managers are grappling with now. Among the hot issues are:
- The increasing cost of benefits to employers (27%)
- The challenge of catering for remote employees (27%)
- Flexibility in benefits design and delivery, with 21% wanting to offer employees more choice in how to redeem benefits allowances.
It’s probably of little surprise that 50% of benefits managers are on the lookout for new software in the next year. Their need for a transformative option is greater than it’s been in a long time.
And this transformation will need to make flexible benefits possible. In a Forma survey of 17 benefits options, the top 15 ranked were all flexible benefits. And the highest position for a set benefit chosen by the employer was 16th.
But there’s still a limit to the flexibility employers can offer with current technology. Stepping into an employee benefits scheme is still like stepping into a cocktail bar and seeing only four menu options, or hearing your boss say ‘choose anything you like but I’ll only pay 10-30% of your bill, if you’re lucky.’
The vision of flexible benefits is great, but you can’t do it with an old mechanism.
Now the flexible benefits dream can exist
The vision of flexible benefits is great, but you can’t do it with an old mechanism.
Embedded finance is the new mechanism. It’s what happens when you put financial features in a non-financial platform. And it makes convoluted business finance functions like expenses and benefits as easy as Apple Pay.
Many SaaS companies are adopting it. As our next step for SaaS research revealed – embedded finance is already in the pipeline for over 70% of SaaS companies. So what’s the hype?
Embedded finance for employee benefits platforms involve features such as:
And no, we’re not talking about the feature set of the new challenger bank. We’re talking about the feature list of tomorrow’s HR platforms (and some of today’s platforms too).
Embedded finance makes employee benefits spendable
There are many reasons why you wouldn’t want to give employees access to their employer’s bank, but with embedded finance, you can effectively give them access to a personalised, employee-sized piece of it.
87% of Gen Z employees say it’s important that benefits are tailored to them as an individual, according to research by Perkbox. But how personal can a personalised benefit be?
In small businesses, personalised perks are possible because every team member can be known personally. If the employer is generous enough to their employees in return for reaching a work milestone or doing a bit of hard work, they might receive, say, a favourite magazine subscription, or a ticket for a day at their local spa. It’s all down to the benevolence of the boss, but it’s possible.
In a large enterprise or scaling business, this is usually impossible.
Until spendable benefits.
Employees can use spendable benefits to purchase exactly what is meaningful to them. No more discounts for marketplaces they don’t care for or misjudged ideas about what their younger generation likes these days. They’re in control.
Here’s how:
- An HR or benefits manager issues payment cards to employees from within a benefits platform.
- The cards draw from a pre-defined benefits allowance, with purchases tied to company-defined categories.
- Employees can spend their allowances on the perks they prefer within those categories.
We go into more detail of what this looks like in our new research.
It’s a hot business case for HR platforms – embedded finance for employee benefits platforms
For HR platforms this technology isn’t only a way to differentiate from the competition, it’s also a way to bring in more revenue.
In our guide, how embedded finance boosts revenue for SaaS products, you can see how product managers confirm their assessment of embedded finance’s massive impact on metrics from user engagement to customer acquisition cost and customer lifetime value.
Our own solution is embeddable by design, so your developers can focus on building the UX and UI elements they know how – and they can use our developer-friendly tools and APIs to embed the financial tools without learning a new skill set.
If you’re looking to embed finance into your HR platform, set up a meeting with one of our experts in employee benefits use cases or take a look at our solution for HR tech platforms.
