The Future of Employment Compensation: Tokenized Flexible Benefits
By: Don Gossen
Tags: Cryptocurrency, Retention, Human Resources, Disruption, Vacation

The Future of Employment Compensation: Tokenized Flexible Benefits

The following is Part 3 in a series of blog posts that will elaborate on existing opportunities for leveraging digital currencies and the potential impact they will have on people’s lives. You can find Part 1 here and Part 2 here. The current article discusses how tokenization can be leveraged to add further flexibility to corporate benefit programs.

“The key is in not spending time, but in investing it.” — Stephen R. Covey

We spend a significant amount of our lives working, putting our most valuable asset, time, into initiatives and organizations that we hope will provide benefit to our circumstance. Where we focus that time is the difference between spending it and investing it. Is that time providing immediate, short term gains, or is it optimized for long term upside? How we invest our time, and what investment options exist, are critical to long term success.

In the simplest form, time allocation is remunerated in cash. You give me your time, I give you some money. It’s the tried and true foundation of employment.

But oftentimes this isn’t enough. Attention for your time is competitive, and those that want it need to sweeten the deal. Enter Flexible Benefits.

Contemporary Flexible Benefits

Flexible Benefits are additional forms of compensation provided to attract talent and their time. They come in the form of vacation days, investment plans, supplemental healthcare, professional and personal development, remote working support, paid volunteer time…the list goes on and on.

Structured properly, not only do these benefits aid in attracting talent, but in retaining it as well, which can prove to be even a bigger challenge for organizations. Over time, flexible benefits can improve performance, satisfaction, mental and physical health, etc. Structured properly, the long term return on investment of time can be significant.

However, despite what the name says, Flexible Benefits are not that flexible. Take, for example, company vacation policies. Many organizations employ an accruals-based vacation scheme. Essentially, the time you spend working, usually measured in periods of months or quarters, unlocks a predefined number of vacation days for that period. In other words, once your time “on” vests, you are compensated in time “off”. This is a short term commitment strategy. The more periods you stick around, the more immediate benefit you receive.

But this form of remuneration is often capped. It penalizes those that may choose or have to be “on” all the time, committing themselves to the mission of the organization. Some companies handle this with roll-over or pay out policies. More often than not, though, vacation is attached to a “use it or lose it” policy. The vacations can’t be transferred or exchanged for other benefits, except possibly for cash. And it definitely can’t follow you to your next opportunity.

This is an example of a common form of compensation that is quite valuable amongst a particular group of people, but ultimately has limited long term upside outside the confines of that cohort. Why is it that this hasn’t been addressed? Shouldn’t this value be usable in other forms elsewhere? Why does it need to remain tied to a particular outcome or organization?

And herein lies the question: why aren’t Flexible Benefits flexible?

What if these benefits could be commoditized and traded like anything else? What if those in excess could trade with those in need, so that vacation budgets could be balanced across all participants, and not just directly between the employer and each employee? What if I could hypothecate my benefits to anything, at any rate? What if you could take these benefits with you from organization to organization?

This sounds fantastic. It also sounds a bit like science fiction. But what if there was a means to proxy benefits in a way that makes them tradeable? How would this be achieved?

Perhaps the answer is tokenized Flexible Benefits.

On the Horizon — Tokenized Flexibility!

Let’s tokenize that value, and make it tradeable. You’re asked to go above and beyond your usual call of duty, like write a blogpost for the benefit of your organization, for instance? Well, here’s some Flexible Benefit tokens to motivate you. You have a surplus of vacation days? Trade them at a token mark-up with someone who has a deficit, and use your tokens to get that supplemental dental insurance you wanted. ;)

The sky’s the limit! The beauty of this design is that it allows us to move towards less encumbrances, and towards greater mobility. Imagine a perfect state where your Flexible Benefits token is recognized by your entire community. Now you have the freedom to take your benefits with you when you leave an organization. The implication and significance of such capability would be immense, providing people with even greater flexibility and security in their lives.

Some may argue that this model subverts the intention of organizations that use Flexible Benefits as a part of their retention policy. However, looked at from a slightly different perspective, the upside to organizations that support these models could be immense. Now, instead of deciding between organizations, people could decide between ecosystems.

The possibilities of this approach are palpable. Organizations within ecosystems can collaborate to attract the best talent to their ecosystem. It can also be used to retain expertise and avoid brain-drain. Even if expertise leaves your organization, they may still want to remain in the overarching ecosystem to leverage their accrued “ecosystem benefits”.

Flexin’ @ Keyko w/ $DŌJŌ

At Keyko, we are beginning to trial this approach internally. We’re in the process of releasing $DŌJŌ to distribute to the team. We plan to trial approaches for coupling $DŌJŌ to certain Flexible Benefits to see what dynamics emerge and to identify what works and what doesn’t.

Over time, we believe that we will be able to create a benefits system that is truly flexible. One that matches the needs and motivations of our Sensei, and provides the freedom and flexibility they require. Of course, we are lucky to have an open-minded team of visionaries that are more than eager to support and improve this experiment, so we are confident that it’s going to be a success.

In the end, we are creating something new that we hope gives Keyko’s most valuable assets, our people, the best return on their most valuable asset, their time.