Employees can get discounts on a variety of products nearly everywhere now - from Groupon to Scoutmob. But one place that continues to provide them, often with the convenience of payroll deduction, is the workplace.

"Employers are looking for a hassle-free way to add value to their employees, and especially right now," says Elizabeth Halkos, chief revenue officer of Atlanta-based Purchasing Power. "Think about all the different tools that customers can use to take advantage of discounts."

Both discount programs, which offer discounts on hotels, tickets, car services, cell phone service, etc., and payroll deduction for purchasing items, as Halkos' company provides, are a way to provide something to employees outside of traditional benefits.

While the programs don't help with health care spending, they do help with morale, says Christy Yaccarino, director of benefits and wellness at Ambrose Employer Group in New York City. "Employees are always looking to save money," she says. "It makes employees happy."

However, Halkos warns that there is an inherit challenge with discount programs in that not all employees can take advantage of them. She explains half of most employees won't have the money to make purchases, including travel. "It's an easy tool for the employer, but may not be benefiting half of the employee base," she says.

To overcome that, the different types of programs are linking up. Brokers may bring their employer clients both a discount platform and Purchasing Power and link them up in order to benefit all, which helps those looking to spend on certain purchases, while also benefiting others who might need to finance a purchase.

The pairing happens "frequently," Halkos says. "A lot of brokers have a discount program that they offer or private label, so they will offer both of these to make sure that they are bringing something in to the employer that meets all employees' needs."

Brian Roland, CEO of Nashville-based Abenity Discount Programs, says that the linking up is popular. "Abenity doesn't make any money, the broker does, but we build the technology to support that," he says. "It gives them the feature to drive products throughout the year to help earn them money. Someone comes in for a Papa John's [discount] and browses Purchasing Power and buys a laptop."

 

Growth market

With all the changes in health care and other employee benefits, Roland sees these programs continuing to grow. "With the changes in core health care and even changes in more voluntary benefits, the employee purchasing discount programs will be leveraged more and more for various reasons," he says. "Employers have to do things in a different way ... and as a result of [core benefit] cutbacks, they need to bring something in affordable and with high perceived value."

These programs also help the broker, building "stickiness" for a broker and client, Halkos says. "Right now, with so many changes within health care, there are options employers consider that might impact the broker commission as is related to core benefits," she explains. "Our program is a way for them to replace some lost commission."

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