How Fintech Infrastructure Is Changing What Employer Benefits Actually Look Like
CONTRIBUTED POST
Fintech has become more and more an integral part of most businesses now.
And it's bridging the gap between how employees and finances are managed to deliver not only more streamlined operations but a bit more financial benefits for both the company and the employee.
This post is going to look at how fintech is changing what employer benefits actually look like.
Payroll Integration as the Distribution Layer
This is the shift that makes the modern delivery of benefits even possible.
It's the embeddedness of benefit deductions within the payroll calculation itself. Not just separate reimbursement.
Pre-tax benefits such as retirement contributions, health savings accounts, commuter benefits, and dependent care accounts are all processed via payroll, not reimbursed after the fact.
Fintech platforms can connect HR software, payroll engines, and benefit providers into a single data flow.
This removes the manual steps that previously made benefit administration difficult for smaller companies.
Native Pre-Tax Benefit Features
When you take a look at the more modern and larger HR and payroll platforms, you'll see that they're moving from treating pre-tax benefits as third-party integrations, and they're now adapted natively into the payroll product.
This eliminates friction from previous points that employers will have been struggling with. And for employers, it means that it's easier than ever to offer enticing benefits packages to existing and incoming new employees.
Not only will you save time and money on not having to input the details, but it also reduces the employer payroll taxes on contributed amounts, regardless of company size.
Employer EV and Mobility Programs
However, it's a benefit worth looking into.
This type of scheme allows employers to offer employees the opportunity to lease electric vehicles, leading to significant savings for both parties, and data is showing this is an increasingly popular perk for some companies, especially those that require employees to travel long distances or have to drive to commute to work, or need a company car.
Checking out salary sacrifice car examples will help you understand how this can work for your business.
Cross-Border Benefit Delivery
As companies operate across geographies with distributed teams, benefit platforms are required to handle different regulatory frameworks to stay legal.
For example, an employee in London will have to have access to a completelydifferenty structured employee benefits package than one in San Francisco. But both need to sit in the same HR system.
When you add in more locations and jurisdictions, it gets complicated fast.
However, fintech removes the need for separate tools,s and platforms are able to accommodate a multitude of different packages and benefit schemes without you needing to manually adjust everything.
Benefit Personalization
The direction for benefits platforms is towards real-time optimization.
It's about surfacing the specific adjustments most viable to each individual employee, not the company as a whole.
This will be determined by things like their salary, location, tax status, and commute patterns.
This isn't something that is standard at the moment at the SMB level; however, the infrastructure is there to support it. And if you're able to offer personalized benefits through the payroll interface, it removes bottlenecks at the place where most employers lose employees, regardless of the underlying benefit.