Employee benefits increasingly matter for attracting and retaining talent. Not all benefits are equal: while established or statutory benefits such as healthcare insurance and pension contributions remain essential, they are increasingly regarded by employees as basic expectations—table stakes rather than distinctive perks. The true potential of employee benefits lies in enhancing employee loyalty and engagement through a positive and enriching experience of discovering and using these benefits. According to Perkbox, 87% of Gen Z employees say tailored benefits are highly important, further emphasising the need for greater flexibility and personalisation.
To meet contemporary expectations, the experience of accessing and using benefits must be retail-grade, comparable to the convenience, flexibility, and ease of use offered by leading consumer brands. Increasingly, that means that it needs to be digital-first. Unfortunately, traditional methods of delivering employee benefits—typically in the form of discounts, vouchers, or reimbursement schemes—often fail to deliver this optimal experience.
At the same time, escalating benefit costs compound these challenges. Benefits managers surveyed by Weavr cite rising costs as one of their top concerns. Leading companies like Meta and Salesforce have had to reduce previously generous benefit offerings, illustrating the financial pressures forcing difficult compromises, often to the detriment of employee satisfaction and employer reputation. In addition, without reliable controls and timely reporting it’s hard for benefits managers to sustain the economic case for investing in benefits.
Limited by geography and logistics
Geographic constraints further complicate this issue. Weavr research found that 58% of benefits managers face significant challenges in providing equitable benefits to employees regardless of their location—a growing concern with the rise of remote and hybrid work arrangements. Traditional benefit models struggle significantly here, often resulting in inconsistent experiences that damage employee satisfaction. For benefits to negatively impact employee engagement is patently counterproductive – therefore, employers with geographically dispersed teams must take extra care with the design of their benefits offering.
Digital-first solutions: the emerging future of benefits delivery
In other words, there is much to solve for. Thankfully, a new breed of digital-first employee benefits delivery approaches is emerging, and one approach in particular stands tall.
Digital-first employee benefits delivery solutions are increasingly being adopted. They come broadly in two variants:
- Closed-loop benefit models, such as Finland’s popular EPassi wallet—which provides a dedicated digital wallet enabling employees to conveniently manage and spend their allocated benefit budgets—offer a fully digital experience and high levels of convenience. Alas, they are inherently restricted to specific merchant networks. This limitation can make them impractical for geographically dispersed or highly diverse employee groups.
- In contrast, open-loop benefit cards—physical or virtual payment cards embedded directly within HR software—represent a more flexible alternative. These cards leverage embedded finance technology, allowing employers to define precise spending controls such as merchant categories, geographic limitations, and spending limits. Employees can then freely choose where to spend within these parameters, enhancing both convenience and relevance.
How open-loop cards benefit employees and employers alike
Open-loop cards substantially increase employee autonomy by enabling personalised choices across a wider variety of merchants. For example, Sally can join her preferred local independent gym, even though it’s not part of a major fitness chain, because her benefit card allows spending on any approved “health and fitness” product or service. Similarly, Adam Alex might use his professional development allowance for a specialist online course from a niche provider that traditional benefit systems wouldn’t cover. These choices significantly boost the relevance, adoption, and overall perceived value of employee benefits.
From an employer perspective, open-loop cards simplify administration, ensure geographic inclusivity, and improve budgetary control. Employers maintain oversight and real-time reporting capability, easily adjusting spending policies to reflect changing priorities or budgets, making benefits more responsive to employee preferences without sacrificing financial prudence.
The challenge of flexibility and personalisation
Weavr’s own research further indicates that 60% of benefits managers would value spendable benefits cards—cards embedded into HR software that employees can use to buy the benefits they prefer within parameters set by their employer—underscoring the strong demand for increased flexibility. Similarly, research from flexible benefits firm Forma’s research supports this, showing flexible benefits consistently rank highest in employee preferences, with rigid, predefined benefits often failing to resonate. Without genuine flexibility, businesses risk alienating employees with ineffective “problem perks” that can undermine their employer brand.
Embedded finance: powering the next wave of employee benefits
Implementing these sophisticated open-loop benefit solutions does not require HR software providers to become fintech specialists themselves. Embedded finance enables non-financial platforms, like HR software, to integrate financial services such as payment cards seamlessly into their offerings without developing extensive in-house financial expertise.
Providers specialising in embedded finance offer all necessary infrastructure—including secure payments, regulatory compliance, and transaction monitoring. This allows HR technology platforms to easily embed open-loop benefit cards into their solutions, adding powerful new capabilities while keeping complexity and administrative overhead to a minimum.
As employee expectations evolve, embedded finance and open-loop benefit cards present an innovative solution, positioning HR software providers—and the businesses they serve—at the forefront of employee satisfaction, engagement, and operational excellence.
The future of benefits is open—and it’s already here.
