2024 Lifestyle Spending Accounts benchmark report
Explore Forma's comprehensive data to gain valuable insights into Lifestyle Spending Accounts and how to build an employee-centric benefits program.
In this piece
The shift towards flexible benefits
To provide employees with greater flexibility and rein in inefficient company spending, Lifestyle Spending Accounts (LSAs) have emerged as a powerful tool used by the world’s best companies. For benefits professionals who navigate the evolving landscape of LSAs, questions unsurprisingly surface regarding the optimal configuration of these customizable spending accounts.
Forma’s 2024 Lifestyle Spending Accounts benchmark report serves as an indispensable guide for HR leaders. The findings throughout this report will equip decision-makers with crucial insights into how LSAs work in practice to meet diverse employee needs and realize tangible results for organizations.
What’s included in the benchmark report?
This report provides insights into how 450K employees from over 200 companies use their LSAs. It gives benefits professionals the ability to gauge the competitiveness of their customizable spending accounts in comparison to industry peers.
After you read the benchmark report, you’ll gain an understanding of:
- The companies adopting LSAs
- The account types companies commonly offer and year-over-year trends
- The amounts of funds offered
- How often companies fund accounts
- How employees use funds and utilize budgets
- Findings by use case, industry, and country
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3 key benchmark insights
As a sneak peek of the report, here are three key insights unearthed from the Forma Research team.
Insight #1: Dedicated accounts saw the fastest growth
Comparing the number of spending accounts from 2022 to 2023 revealed the account types that experienced the most year-over-year (YoY) growth. Despite the prevalence of the All-inclusive LSA, it expanded at a slower rate than other types of accounts. Instead, accounts dedicated to specific employee needs experienced the highest rates of YoY growth.
Insight #2: Account relevancy and policies drove budget utilization rates
Forma Research analyzed how budget utilization rates changed when looking at funding amounts and frequencies. Interestingly, there was no strong correlation between budget utilization and these attributes. Instead, accounts that were more relevant to a wider population or ones that had more lax program policies, such as the All-inclusive Lifestyle Spending Account, had high budget utilization rates. Accounts with specialized purposes (e.g., Medical Travel) or stricter guardrails saw lower budget utilization rates
Insight #3: LSA popularity outside of Tech
In the past few years, companies of all types have begun to adopt LSAs. Non-technology companies made up 60% of firms that offered customizable accounts. If trends continue, the distribution of industries will likely shift towards more traditional industries as more sectors embrace innovative solutions.
Want to learn more about LSA benchmarks?
To gain further perspectives, watch this on-demand webinar about the key insights from the 2024 LSA benchmark report, led by Megan Burns, Benefits Strategy & Solutions at Forma. In this session, Megan covers additional context on why LSAs have grown in popularity over the past few years, how companies benefit from LSAs, and best practices for account design.