Flexible allowances. Frustrating processes

A lifestyle allowance only works if someone uses it. Too often, the processes surrounding it make that harder than it needs to be.

Employers are giving more than employees can see

In our research, 64% of HR leaders said they had added or expanded benefits during the previous year yet only 32% of employees thought the same. Those employees who can access their benefits clearly understand their value, and around three quarters say benefits improve their quality of life; yet more than half say they struggle to access and understand the full value of what is available to them.

Somewhere between the company investment and the employee experience the perception is getting lost.

Lifestyle spending, or flexible spending, allowances are particularly exposed to this problem. While some benefits are picked once annually and work in the background all year, lifestyle allowances only work when somebody notices (or is informed), understands and decides to use them. This means employees are missing out on the training, wellbeing, lunch and remote working allowances they are entitled to.

Unclaimed is not the same as unwanted

When allowances go unclaimed it is not usually because they aren’t valued, it is often because small obstacles add up and stop people using them.

An employee needs to know what the allowance covers, pay for something out of their own pocket, keep a receipt, submit a claim and wait for reimbursement. If they cannot see their balance or understand what qualifies, claiming starts to feel like more effort than it is worth. Smaller claims are often missed because they aren’t deemed worth the effort, resulting in lower participation, lower utilization and less perceived value.

Unwarranted workload for HR teams

Every obstacle an employee encounters becomes administration for somebody else. An employee cannot find their balance, so they ask HR. They are unsure whether a purchase qualifies, so someone explains the policy. A claim is submitted incorrectly, so it is reviewed and returned. A deadline is missed, so an exception needs handling.
When employees understand the rules themselves, they raise fewer queries. When balances are visible, fewer updates are needed. When the process is straightforward, fewer claims need correcting.

The easier flexible spending allowances are to use, the easier they become to run.

The future of lifestyle spending allowances

Benifex Wallet makes lifestyle spending allowances easier to use and manage. It gives global HR and reward teams one place to distribute, control and report on employee allowances, replacing the manual, fragmented processes that create errors and drive-up admin cost.

With Wallet, employees are better able see what allowances they have available, understand what qualifies, track their remaining balance and submit claims from web or mobile. HR teams manage approvals, reporting and spend visibility from the same place.

When allowances are easier to access, employees are more likely to use them, and HR teams are better able to show the value of the investment they have already made.