As the economy continues to boom, the job market remains more competitive than ever. The unemployment rate in the US continues to remain unchanged at 3.5%, meaning anyone that wants a job already has one, and everyone has the opportunity to find a job in a work environment where they can flourish. As a result, the top talent has quite a few options when it comes to selecting the next best career opportunity for themselves. For small business owners, this means you must do everything you can to differentiate yourselves from the competition. In addition to a competitive salary, you should be offering employee perks and benefits that appeal to them.
Lifestyle Spending Accounts (LSAs) are one of the best employee perks out there to help you stand out. LSAs are a relatively new employee perk that not many employers in the US have caught onto, although they are widely popular in other countries, like Canada. LSAs may also be referred to as wellness accounts or personal spending accounts.
An LSA is an employer-funded account-based benefit that employees can use to make specific purchases. LSAs are similar to health savings accounts but much more flexible. Unlike health savings accounts, employees can make purchases anywhere that you approve. The goal of LSAs is to promote healthy behaviors and boost productivity in the workplace.
Some of the most common types of expenses employers choose to cover with these accounts are costs for fitness classes, financial counseling, daycare, or wellness treatments such as spa days. LSAs can be used for anything that you believe contributes to the well-being of your employees.
Setting a budget that lasts all year and yet properly incentives the team
Lifestyle Spending Accounts are not only appealing to employees, but they work in the employer's favor as well. One of the most significant benefits for employers is that the budget that you choose to set for LSAs is entirely up to you. For instance, if you wanted to reward each employee with $500 per year, you can make the funds available at the beginning of each year so that employees can have access to the funds immediately. Or, if you wanted to spread out the contributions, you can make LSA deposits throughout the year, such as on a bi-annual basis or quarterly basis.
When speaking of budget, it’s essential to know how to address when employees make a big purchase. In this situation, the employee would purchase the item, submit the receipt for consideration of reimbursement, and it would then be up to the employer whether they will reimburse the employee.
Here are some things to consider before getting started with LSAs:
· Will you allow the funds to roll over year-to-year? Or do employees have to use the funds before the year is up?
· What types of purchases will you allow? Or will it be completely open?
· Will you be managing LSAs, or will someone else on the administration team be handling it?
Make it relevant
Another great benefit of LSA accounts is how flexible they are. Each business has its own diverse team. Meaning, employees find value in different things. For instance, one employee might be a health and wellness guru, so they could benefit from using their LSA account to pay for nutritional coaching and fitness classes.
On the other hand, you might have a single parent who could use the financial assistance to cover for daycare costs, so they could dedicate themselves to work without the burden of paying for daycare.
You could have the social butterfly on your team that would benefit from paid lunch or dinner outings so they could connect with their colleagues. There is something for everyone to enjoy with lifestyle spending accounts. Before getting started, ask around to see what kind of perks your employees would enjoy.
How to communicate the program to associates
Because LSAs remain a unique employee perk program in the US, most of your employees have not heard of LSAs, which means they will need some guidance on how to use their account.
Once you get started with lifestyle savings accounts, you will want to meet with your team and address these points:
· Where can employees use their LSAs?
· How will you determine how much to award each employee? (Will awards be based on achievement or will everyone receive the same amount?)
· How often will they receive funds?
· Will any of the funds come out of their pay? (The answer to this is no- because it is an employer-funded account.)
· Is there a rollover at the end of a period? (This is up to you whether or not you decide to have a “use it or lose it” policy.)
If you or your team have any more questions about lifestyle spending accounts, feel free to contact our team at Work2Live.
How to enroll in W2L to get started
If Lifestyle Spending Accounts sound like an employee perk program that you are interested in, sign up with work2live with our Quick enroll. Or, if you want to read up on LSAs a bit more, check out our blog page to get a better understanding of how LSAs work and how other businesses are using these perks to attract top talent and keep employees happy.
How to run a small pilot of the rewards program to test it out
At Work2Live, we understand that LSAs are a new concept for many employers. We are happy to offer you a free demo to show you how it works! If you are curious about LSAs, a free demo is an excellent starting point.
While the job market continues to prosper, get on board with one of the best employee perks out there so you can attract top talent. Not only will your employees value this unique perk, but it will be the best decision you ever made for your business as you boost productivity in your workplace and have a perk that is easy to manage while keeping your employees happy and motivated.