When running a business, every penny counts. If you don’t have this mindset, you can quickly find yourself in a constant uphill battle with your company finances. When was the last time you took a look at your employee benefits? Maybe you started to offer employee perks like free lunch outings, fitness classes, or sports outings, but how many employees find value in these benefits? Or to put it bluntly, how much money is your company wasting on perks and benefits that your employees don’t use or consider valuable?
If you offer your employees perks in addition to a competitive salary, we have good and bad news for you. The good news is that you are heading in the right direction. The bad news is, the perks you offer might be taking away from the financial success of your organization.
Is it possible for your company to invest in its employees towards something that might have a more significant impact on employee satisfaction, employee retention, and employee productivity? The answer is YES! These results are all possible with Lifestyle Spending Accounts (LSAs.) We’re here to give you the 411 on LSAs and how they can boost your ROI.
What is a Lifestyle Spending Account?
An LSA is an employer-funded account dedicated to employee perks. Before companies knew about LSAs, they tried their best to come up with perks that they thought their employees might enjoy.
Rather than guessing committing to what you think your employees want, LSAs help employers put the money and choice in the hands of employees so they can get the perks they desire the most.
Lifestyle Spending Accounts are gaining popularity in today’s workforce because they provide a better experience for employees, but they are also a more straightforward process for HR team members. Oh, and the best part, LSAs boost your ROI!
Employee Perks- Are They Worth It?
Raise your hand if you have ever tried any of the following perks. You are onto something great with your intentions, but here’s why these examples will fall short of your expectations.
Team Bonding Events
How many times have you hosted a social gathering for your employees, only to find out that there was not a great turnout? Maybe you spent tons of money on a holiday gathering, and only a few of your team members showed up. Whether this was money that came out of your pocket or the company’s pocket, it went to waste.
Several companies offer paid gym memberships to their employees. Companies do this by having a nearby gym (on the company’s expense) or allowing employees to charge fitness fees to a company card or get reimbursed for their payment. The problem with offering gym memberships or any fitness-related perks is not everyone will take advantage of this perk. There might be some employees who can’t physically exercise, don’t have the time between work and family obligations, or they are just not interested in exercising. While some employees might appreciate gym memberships, you are not considering every employee.
Several companies also offer free food as an employee perk. While this is a nice gesture, it might not be worth it when determining how it contributes to your bottom line. A report from HR Bartender showed a disconnect between how employers and employees feel about the free food perk. The report showed that 44% of HR professionals believed their employees “loved it.”
Meanwhile, 63% of employee respondents said they did not care for or were indifferent towards free food perks. So, what happens to all that food that goes to waste? Well, along with the food going to waste, your budget is going with it.
The One-Size-Fits-All Mindset
Perks such as fitness memberships, free food, and company bonding events are all ways of employers trying to show appreciation and promote well-being across their team. But the truth is, only some employees are actually benefitting from these perks, and the others are left behind.
The purpose of perks is to show appreciation to your employees so when your entire team does not benefit from the perks you offer- what’s the point? More importantly, this one-size-fits-all mindset is costing you money.
The Solution: Lifestyle Spending Accounts
If you are offering perks in addition to a competitive salary, you are already ahead of some companies, so this is good news. The answer to your bottom line is not to do away with employee perks, but make wiser financial decisions when it comes to selecting perks.
So how do you do this? What inspires one employee, keeps them productive, and motives them on a day-to-day basis is entirely different from the person sitting next to them. The solution is putting employee perks in the hands of the employee with lifestyle spending accounts.
How LSAs Work
Before getting started with Lifestyle Spending Accounts, ask your team what they would want as employee perks. A great benefit of LSAs is they cover any expense the employer feels aligns with their values and purpose. So, if you're going to limit awards to things that contribute to the well-being of your employees, you have that power. LSAs have great flexibility to employers and employees alike.
Next, determine how to award the funds. Will you deposit funds annually, quarterly, or on merit? Will everyone get the same amount?
Most importantly, to see the best possible ROI with LSAs, talk to your employees about their new perk! LSAs are a relatively new perk in the US that only a few pioneering companies offer (which is excellent for you!) Talk to your employees about how they can use their LSA and how you will deposit the funds into the account. It is also up to the employer whether they want to have a use it or lose it policy, in which if they don’t use the funds in their account, their balance clears. Or the funds will roll over into the following year. It’s your choice.
Work2Live: Boosting Your ROI
If you are looking to boost productivity and lower your turnover rate, LSAs are the perk you have been looking for! Spend your money wisely and give your team the perks they want with LSAs!