Take benefits to the next level with lifestyle spending accounts

Employee satisfaction with company benefits has dropped to the lowest number in a decade, with only 61% of employees satisfied with what their companies offer them.

It's impossible to blame HR teams or even CFOs for this dissatisfaction, though — finding affordable benefits that fit every single employee's wants and needs is an exercise in futility. At least, it was until lifestyle spending accounts (LSA) came onto the scene.

Lifestyle spending accounts can be the customizable benefit you need to meet diverse employee needs without breaking your budget. In this post, I'll share what LSAs are, the benefits we've seen after implementing them ourselves, and some other helpful examples.

Definition of lifestyle spending accounts

LSAs are employer-sponsored accounts that allow employees to spend a regular allowance on a variety of expenses. HR leaders can decide on the cadence and amount of the allowance, such as $10 every week, $25 every month, or even $500 every year. HR can also set any amount of restrictions (if any) on approved expenses.

The purpose of lifestyle spending accounts is to redistribute existing budgets to better reach all of your employees with your benefits. LSAs allow employees to choose how they spend their money so that they get company-sponsored help on things they actually care about.

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Benefits of lifestyle spending accounts

To best convey the benefits of LSAs, I want to share what we've done with them and the results we've seen.

Our LSAs are a monthly stipend that's tied to employee tenure — so in an employee's first year, they get a smaller amount each month, and that amount goes up for each year they stay at the company. This budget comes from our redistributed service award budget, so this upgrade has barely cost us anything extra.

And because Awardco is all about employee choice, we decided to not put any restrictions on approved expenses. I've heard of employees using their LSA on all sorts of things, including dinner dates with their spouse, travel expenses, child care costs, groceries, and home decor.

This helps show the employee-specific and cultural benefits we've seen since implementing LSAs. Not only has our retention improved, we've also been able to increase the effectiveness of our benefits and built a culture of excitement and appreciation — every 1st of the month, people get excited to receive their stipend, and I love the boost our work environment gets.

LSAs aren't just an employee-facing enhancement, though. HR teams can enjoy impactful benefits, too:

• No more manual reimbursements
• No more fiddly processes because LSA can be fully automated
• No more unused budgets — leaders can redistribute existing perk or benefit budget into LSAs
  

Lifestyle spending accounts can be the benefit HR teams need to maximize their budget, improve their culture, and reach all of their diverse employees.
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Examples of lifestyle spending account uses

The best part about LSAs is that you can customize them to fit your exact needs, goals, culture, budget, and people. You don't have to tie them into service awards or tenure like we did. Here are some other ideas of LSA uses.

Remote work stipend
For organizations with remote employees, it can be hard to make them feel valued and seen. LSAs can make working from home easier and more rewarding by covering:

• Home office equipment costs
• Internet bills
• Food delivery service

Return-to-office incentive
On the opposite side of remote work, if you want to incentivize employees to come back to the office, use an LSA to make the transition easier. Approved expenses could include:

• Transportation costs
• Lunch
• Child care
• Gas
• Car maintenance

Employee wellness program
Employee wellness is important for any business — help employees physically, mentally, emotionally, and financially with a wellness-centered LSA that covers:

• Gym memberships
• Fitness equipment and clothing
• Healthy groceries
• Financial services
• Therapy sessions
• Massage or chiropractic appointments
• Fitness classes

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Professional development benefits
LSAs can also be used to incentive and drive professional and personal development for employees. And considering 74% of employees want to develop new skills, you shouldn't overlook this. LSAs can help with:

• Conferences
• Workshops
• Continuing education

• Educational reading material

It's time to upgrade your benefits

Take the guesswork out of benefits and create something that gives employees the freedom to choose what means the most to them. Whether you implement an LSA with a specific focus and approved expenses or a more open-ended one that allows employees to spend it however, everyone will be benefited by the money you spend. Which is more than any traditional benefit can say.