Podcast: Benepass’s Jaclyn Chen on Benefits, Retention and Covid

Benefits

Transcript

Mark:

Welcome to PeopleTech, the podcast of the HCM Technology Report. I’m Mark Feffer. My guest today is Jaclyn Chen, the co-founder and CEO of Benepass. They’re a platform that distributes benefits and non-salary compensation to workers around the world. We’re going to talk about COVID’s impact on employers and benefits, how companies can put together a package that helps keep employees on board, and how benefits are evolving to meet the times, all on this addition of PeopleTech. Hey, Jaclyn. Welcome. Could you tell me about Benepass? What makes it different from the other people in your space?

Jaclyn:

At Benepass, our mission is to help companies reimagine how they take care of their people. And so at Benepass, we distribute all types of non-salary compensation. For example, wellness, work from home, family support, professional development, commuting meals, all with an eye toward employee flexibility, ease of use, and really taking care of people’s individual needs. Our software is powered by financial infrastructure, which makes it really easy for HR and people teams to set rules, automatically distribute these benefits in the form of stipends or certain funds, and then automate the workflows on the back end for the people team.

Mark:

Now, you said you want to reimagine benefits. Can you expand on that a little bit? How does one reimagine benefits?

Jaclyn:

For us, we think the future of benefits is all about flexibility and personalization. And what I mean by that is, if you think about the average enterprise company, there’s about five generations of people that work there. And the last two years have made everyone increasingly distributed in hybrid. And now you have a lot of companies that by default have their workers in more than one location. So we know that one-size-fits-all can’t possibly be effective. So what we’re doing is equipping … through the use of financial technology, we’re equipping people teams with the tools to make personalization and flexibility possible at scale. So instead of one HR benefits person crafting a package that’s perfect for one person, obviously that doesn’t scale. So what we do is we distribute the funds with some guardrails that the people in HR team wants to set, but really allow the employee to choose what matters most to them and their family. And using our platform, that’s where that personalization and flexibility is possible. And we think that that’s the best way to take care of people in a way that’s personalized for them as opposed to a one-size-fits-all type of strategy.

Mark:

Now, how does it work technically in terms of user access, and distribution, and all that.

Jaclyn:

So at Benepass, let’s say we are working with a certain type of corporate client and they hire us to distribute benefits for their team. So as an employee, you get access to a web portal and a mobile app that has a Benepass Visa card on the platform. And what you can do is that card can be used at a number of merchants around the globe depending on what types of benefits that that person is enrolled in. So let’s say they could have a wellness stipend that recurs every month that the company gives to promote personal and … that the company gives to promote physical and mental health. A new worker could also get access to a work-from-home set up to buy a desk, and a chair, and a monitor for home. They could get funds for cell phone and internet also at home. And those are the funds that are distributed and it’s all swipeable on the Benepass Visa card.

Our financial technology underneath the hood is a ledger that’s tracking the funds between the employer, the employee, what’s spent to date, the tax and the compliance around the usage of those benefits, and it makes all that administration seamless for the employer on the back end.

Mark:

There’s a lot of speculation about COVID and where we are. A lot of talk that we’re done with it or we’re at least getting to be done with it. Has COVID and its fallout changed the way that benefits are perceived by employees, what they want and what they expect?

Jaclyn:

I think during COVID, it became abundantly clear that companies needed to also step up and take care of their team. And I think that that expectation now is what you see in the typical worker. And what they expect from their company is compensation and total rewards. It’s not just transactional. It’s not just I pay you a certain dollar amount in exchange for work. And instead, I think effective and efficient attraction and their attention of talent, companies have to think, “How can we figure out what’s the most important and holistic way to take care of our team?”

The other semi-permanent trend that’s here to stay, I think, is having distributed teams and having folks work from home, commute into the office or kind of anything in between. And that makes the distribution of benefits even more difficult because you have people in more places and their preferences are different. Even things like giving out lunch at the office all of a sudden becomes kind of logistically complicated because you don’t know who’s going to come in, and you don’t know who to order for, and there might be folks that are dialing in from hours away. So what COVID has done is I think made it much more complicated and logistically difficult for HR and people teams to distribute benefits. And again, back to that theme of it can’t be one size fits all and you have to meet employees where they are, I think COVID really created that dynamic and that’s here to stay.

Mark:

Are you happy to do a lot of evangelism about this when you talk to employers or do they buy into the whole notion of the personalization and the scaling and such that you’re talking about?

Jaclyn:

There’s definitely a range when we talk to prospective clients. Certain companies are a bit more people forward and want to be an employer of choice versus others. Of course, there’s always a range, but I would say in the last three years that Benepass has been founded, I do think there’s been a noted change in how receptive people teams are to this concept. I think they hear from their employees if the benefits package is not appealing, and then people will vote with their feet and move to another company where the overall rewards package is more appealing. So the people teams, I think, right now are kind of stuck in terms of, well, that this is a dynamic and a trend that’s happening. We know we have to personalize in order to make the most use of our budgets, but at the same time, we lack some of the tools to be able to do so. And that’s why I think as a HR tech company, it’s a really exciting time for us in the industry because we’re building a lot of the tools to make this really possible because that’s what we’re hearing from our clients. These are the tools that they need to be able to deliver that personalization at scale as opposed to being buried under a mountain of paperwork.

Mark:

Now, are you integrating with other products and services or do you have other products and services integrating with you?

Jaclyn:

Yes. We frequently connect to Payroll and HRIS Systems. So what that means is we get an automated directory feed of employees and demographic fields that determine what benefits they’re eligible for. So we can automatically add new hires, enroll them in benefits, depending on, for example, what country they live in, what type of worker they are, which might dictate the benefits. And then also when employees terminate, or when they move countries even, or when they get rehired, those are all reflected in our system because of that automated directory sync. For certain HRIS and Payroll Systems, we can also write back imputed income based off of the benefits that people use that are taxable. And we also connect with Ben Admin systems to receive elections as well. So definitely we know that to be an effective part of the ecosystem, you have to play with the other pieces of software in the HR stack.

Mark:

Now, I’ve got to imagine that security is a big issue for you. So can you tell me your thoughts on security given your particular niche? And also how do you address it? How do you handle it?

Jaclyn:

As a small company, even now we have an eye towards security right from the get go. Everything has been designed with security as one of our top priorities. So as a small company, we are SOC 2 compliant already. All of our information and data is encrypted in transit and at rest. We have similar encryption systems that are bank grade and we also handle … because we handle a lot of sensitive personal employee information. And we know that security is really important in this industry and it’s been part of our core of how we operate since day one.

Mark:

The business world is kind of [inaudible] right now and the working world does along with it. How do you think benefits are going to evolve over the next few years?

Jaclyn:

Workers today have a lot of choices in terms of where they can work, and that’s buoyed by the possibility of remote work. But there’s also what seems to be potentially an economic downturn or a possibility of recession, or we may already be in one that’s certainly dominated the new cycles over the past six months or so. So it’s a combination of those two trends and it’s unclear where exactly it’s going to shape out. What we do know about benefits is there’s a psychological value of what benefits say about how the company is taking care of their team in a way that cash and just regular salary or hourly wage compensation doesn’t communicate that. And so what I see in terms of benefits is it’s such an important component of the overall rewards package. And companies really need to know, especially in potential economic downturn, that they’re spending money in ways that actually matter to their employees.

Benefits is about 30% of total comp here in the United States. And so it’s a massive line item for companies, but oftentimes you have employees who don’t know what 80, 90% of the benefits that are being on offer are. So that’s a waste of money. And so in this economic downturn, even if you have, let’s say, fewer people, you need to make sure that the people that you do have are really happy, really engaged. And a benefits, a really great personalized, flexible benefits package is a really essential component of that overall experience.

Mark:

It might happen soon, it might happen later, but eventually there’s going to be a downturn. I think we all expect that. How do you think a downturn is going to affect Benepass and its business?

Jaclyn:

I think we at Benepass are really well positioned for even a potential downturn because we can help companies optimize their benefits budget. If you take a look at all the things that companies buy for their teams and look at the utilization rates, what a lot of people in HR teams uncover is that they’re not always buying programs that their employees value. The engagement utilization rates might be 15, 20%. And in this economic environment, does that justify buying seats for, let’s say, half of your company if only 10 to 15% of people are using it? In that case, I think we can help companies say like, “Hey, let’s look at your overall benefits budget and really spend it on things that your employees will care about. So let’s cut away the stuff that you might have had budget for in years past and let’s it on things and give your employees the ability to choose what they want to spend that budget on.” So our positioning to clients, even in this potential economic … in this economic downturn is not spend more. Obviously there’s a limit to that, and that’s not possible right now, but it’s optimized. And the way that you optimize your budget is to make it super flexible and personal for the employees so that they can get what they actually want from the benefits package.

Mark:

Now, are there things that you’re keeping an eye out for either in the economy, in the business, in demands from employers or employees? Certain guideposts that you have to pay attention to in order to plan properly for your product or adjust properly to fit the times?

Jaclyn:

Definitely. I think there are a lot of benefits trends that come and go. And a lot of it, I think even in this year, is tied to current events. At the beginning of 2022 when the war in Ukraine broke out, a lot of our clients had their employees request to make charitable donations with some of their benefits. So that was something we could quickly turn on. Also, with inflation, gas prices went up, a lot of basic costs of living went up. And so we’ve had clients who’ve given fuel cards to help support their employees in that instance, or Roe v. Wade gets overturned in early June. And a lot of companies are now wanting to support employees in states where certain types of medical care are no longer accessible and allow them to travel.

These are all types of current events that really impact a worker and companies want to figure out, well, how can we step in and help them and take care of them in that way and keep them engaged through our benefits package? And those are the types of things that we really listen to our clients and listen to our employees that are on our system of what they need in this current environment in order to feel fully taken care of. Those types of benefits I think are really engaging and make employees feel like their needs are being heard, they’re being heard quickly, and that be they’re being taken care of.

Mark:

Well, Jaclyn, thanks so much for stopping by.

Jaclyn:

I really appreciate. This is fun.

Mark:

Jaclyn Chen, the co-founder and CEO of Benepass has been our guest today on this edition of PeopleTech. We’re the podcast of the HCM Technology Report and we’re a publication of Recruiting Daily. We’re also a part of Evergreen Podcasts. To see all of their programs, visit www.evergreenpodcasts.com. And to keep up with HR technology, visit the HCM Technology Report every day. We’re the most trusted source of news in the HR tech industry. Find us at www.hcmtechnologyreport.com. I’m Mark Feffer.

Image: iStock

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