Study Outlines Best Employee Benefits Companies Can Offer
A new benchmarking study from Benepass, a modern benefits platform for People-forward companies, illustrates the impact of the pandemic, continued work from home policies, the tight labor market, and shifting demographics on employee benefits offerings. The company's first ever benchmarking report, which analyzed benefits data from more than 20,000 employees across the U.S., found that traditional health and wellness benefits such as fitness, nutrition, mental health, and spa, beauty and massage were the most popular offerings across companies of all sizes. In a nod to changing employee needs and preferences, the study also uncovered a host of new creative and flexible benefits to support employees are also top of mind, including pet care, food, parental support, tuition reimbursement, and travel and vacation benefits.
"Employees today want to work for organizations that value their well-being, so it makes sense that companies are searching for new ways to prioritize employee wellness, especially as remote and hybrid work blurs the line between work and home. Our study findings show clear signals that companies are seeking to provide benefits that are highly personalized and flexible," says Jaclyn Chen, CEO, Benepass.
Key report findings:
Based on an analysis of benefits data from large, medium, and small U.S. businesses representing 20,000+ employees, the 2022 Benepass Benefits Benchmarking Report found:
• The Rise of Flexible Spending Accounts (FSAs) and Dependent Care Flexible Spending Accounts (DCFSA): Of the various types of pre-tax accounts, Flexible Spending Accounts (FSAs) are the most popular. Dependent care FSAs (DCFSA) ranked second. During the pandemic, parents faced the stress of working from home while their children were in the next room due to closed daycares and schools, raising our overall consciousness of what it means to be a working parent. The popularity of DCFSAs suggests employers continue to explore how to support parents so they can be their best, most productive selves at work.
• Wellness perks most popular offering at large, mid-size and small organizations: Across all company sizes, and industries, the most popular types of perks are fitness and wellness, lifestyle spending accounts (LSAs), and work from home. On average large companies are spending $177/month, medium sized companies spending $108/month, and small companies spending $67/month on fitness and wellness benefits alone. Technology and healthcare organizations are both big spenders when it comes to fitness and wellness benefits with technology companies spending on average $111/monthly and healthcare organizations spending $117/monthly on these perks.
• Lifestyle spending accounts (LSAs) are empowering companies to expand the concept of wellness. LSAs, a relatively new benefit in the market, are non-salaried allowances that enable employees to choose how to best support their work-life balance and well-being. LSAs are fully funded by the employer and were developed on the basis that flexible, employee-led benefits lead to happier, more productive employees. The report found LSAs to be the second-most-popular perk among all companies, with 37% of companies offering it and providing an average of $171 in flexible monthly funds. Given the newness of this perk, many companies also struggle to design the core eligible spending categories. While traditional wellness pillars such as fitness, nutrition, and mental health made up the bulk of eligible spending categories, the inherent flexibility of LSA accounts has empowered companies to expand their well-being support to include spas, food, pet care, travel and vacation, professional development, tuition reimbursement, and parental support.
• WFH perks remain popular and go well beyond buying a desk: Regardless of benchmark segment or industry, many employers provide $500 to $1000 in work from home benefits, which allows employees to purchase high-cost items like a new desk or office chair. With the continued trend toward WFH, the report saw increasing creativity on the part of employers to support employees at home including paying for meals, cleaning services, trash pickup, or water treatments. Technology companies are big spenders when it comes to buying employees meals, spending on average $123/month on the popular perk. This compared to healthcare companies who are spending on average $25/month on food perks.
• Rise in experiential perks to meet preferences of Gen Y, Gen Z: Some companies provide entertainment or cultural experience benefits to help pay for podcasts, music streaming services, concert or theater tickets. This perk is particularly popular amongst tech companies who pay on average $44/month on this benefit. Other unique benefits that are particularly appealing to this demographic include travel benefits for employees to spend on personal vacations and rental homes or one-time rewards to celebrate new hires, birthdays, or work anniversaries.
• Small businesses face pressure to match benefits of larger companies: The study found that while the dollar amount may be less, small businesses were by and large offering the same benefits as large and medium size businesses.
"I think there's an expectation from younger generations for more than just the traditional core offerings. They really want flexibility and choice, and they want their employer to meet them where they're at. When you want high-performing employees, you need to make it easy for them to access the support they need, when they need it. I think it's a generational shift and change from coming out of the pandemic; people are much more aware of and more vocal about their well-being," says Kelly Wakefield, senior manager, global benefits, Moderna.
Access the entire report here