‘Treating everyone as individuals at scale’: How companies are adopting flexible benefits packages
When Jessie Danyi joined business expense platform Pleo in 2018 as its “people person,” the then 40-person startup’s benefits package looked pretty much like any other standard company’s. With the aim of giving the package a makeover, Danyi began observing what was happening in other companies: hooking company culture on a specific perk, value or audience, like unlimited vacation, a strong professional development curriculum, or embedding a wellness philosophy.
But Danyi was all too aware that aligning strongly with certain types of benefits simply couldn’t be meaningful for every single employee. “We were trying to offer equality globally, so everyone’s getting the same value,” Danyi told WorkLife.
“We thought, ‘how do we make something that actually works for everyone?’ Then we realized the best way to do that is just to let people choose,” she added.
Pleo launched its Flex Benefits program this February to its now 830-strong (and counting) workforce. The company is adding up to 100 new starters each month worldwide. Core benefits available to all employees include 25 days annual leave, healthcare, a lunch budget, parental leave, and additional sick leave for when children of working parents fall ill.
On top of that, employees are given a yearly Flex Benefits budget based on their location and remote or office status. For example, a U.K. employee working remotely has a £2,100 ($2,500) Flex Benefits budget, while an employee in Canada based out of the Quebec office receives a CAD $3,700 ($2,800) Flex Benefits budget.
The budget can be spent on a menu of options including up to 10 additional days of leave, professional development, charity donations, home office investment (beyond a core stipend Pleo gives), wellness app subscriptions, and ad hoc childcare.
Pleo employees could also use the perk for spending money toward an item of their choice, as long as it isn’t illegal or related to alcohol, drugs or porn. For example, some have chosen tattoos, puppies, climbing courses, a home cleaning service or treatments — both medical and aesthetic. The budget, available from the first day of a person’s tenure, is replenished annually, but doesn’t roll over. Aside from the additional leave option, all Flex Benefits are taxable, Danyi added, which she admitted did give the program complexities, but gave the company a future-thinking edge without alienating any demographic.
“There’s a huge trend towards customizing benefits and treating everyone as individuals at scale. I’ve seen it a lot in the tech space, but I still don’t see it as often as I would expect. The companies that are going to win will be those that give more control to their employees,” said Danyi.
At a time in which companies increasingly need to be all things to all people, customizable benefits packages may be the way to truly achieve that. Especially when 12% of U.S. and U.K. workers’ talent operating system Beamery surveyed said “none of the above” when asked which work perks they wish they were offered, from choices like gym memberships, discounts, dental care, subsidized childcare, enhanced parental leave and others.
Meanwhile, a study of 1,000 U.K. workers by HR software provider CIPHR showed that work-life balance and a total rewards package were the first and second most valued job perks, with feeling valued and appreciated coming in sixth.
It might be no surprise then that personalized benefits platform Juno, which works with 160 companies across 40 countries, grew its user base tenfold last year. Founder Ally Fekaiki has noted that employers who sign up with Juno are typically looking to do two things.
First, to reduce financial and material waste associated with traditional benefits schemes which often only appeal to certain groups. Second, to offer staff access to the specific support they need, helping with talent acquisition and retention.
As with Pleo, employers cover core benefits like annual and parental leave, and employees are then allocated credits to spend within Juno, from 5,000 options including childcare, meal boxes, fitness classes, festival tickets and mental health support. The platform will soon also let employers allocate staff an additional “cost of living allowance.”
“Millions are wasted every year on ‘work perks’ which people just don’t want. It’s a waste of money for employers, with no added value for staff who eschew what’s on offer,” said Fekaiki.
Flexible workplace benefits may be a tool to help address what he describes as “some of the inherent bias” in employee benefits, argued Jay Zigmont, founder of Mississippi-based financial planning consultancy, Childfree Wealth. Zigmont cites a recent study highlighting how 27% of adults in Michigan self-identify as child-free by choice, excluding them from benefits such as parental leave and childcare.
“There are a series of benefits that child-free people may never be able to use in most plans. By offering a true flexible benefit menu, the hope is each employee can set up a benefits package that reflects them as a person rather than their marital, family, or other status,” said Zigmont.