Employer-sponsored programs without flexible benefits plans are falling short. Here’s why.
Salary and core benefits (i.e., medical, dental, vision coverage) used to be sufficient to entice top talent, but many employees now realize these benefits don’t fully meet their needs. Employers have caught on and are investing more in employee wellness. In fact, about 80 percent of large U.S. employers offered workplace wellness programs as of 2019 to augment their traditional offerings.
However, many of these wellness programs miss the mark and have low employee engagement. Why? The answer is simple and intuitive: Every employee has a different set of needs and the one-size-fits-all approach to employee wellness lacks the flexibility or choice to meet unique demands.
Consider employee mental health, which is one of the top areas of focus for many of today’s companies. Stress on the job is the leading workplace health problem and a major occupational health risk, according to the U.S. Centers for Disease Control. In fact, job-related stress ranks higher than physical inactivity and obesity. This epidemic contributes to absenteeism and losses in productivity that add up to $225.8 billion each year for employers. Yet employee utilization averages below 10 percent for Employee Assistance Programs, according to multiple studies, consultants, and human resource professionals.
Employees value their benefits programs highly—nearly half of the employees cite benefits as an important reason for joining a company and 46 percent would be willing to forgo a bump in pay for enhanced health benefits, according to WTW’s 2022 Global Benefits Attitude Survey. While the intent is to support employees' wellbeing, the result of a program with limited set options relevant to some, not all inevitably fall short.
However, benefits that aren’t able to meet the unique needs of each individual team member will fall short in terms of producing results at the individual and organizational levels. In short, the investment in benefits will have a low return.
Employees want autonomy and flexibility in their benefits packages.
The days of HR departments dictating which benefits are best for the whole staff have become obsolete. Instead, individuals want more flexibility in their benefits. They want the autonomy to make decisions about their choices that work for them and their situations.
Lifestyle account benefits are one solution that delivers on this mandate. Employee spending accounts work two-fold: They reward team members for diligent work while serving as a pillar to support the team. When their benefits work for their individual needs, employees feel more appreciated and are likely to be more engaged. This can lead to increased workplace productivity and, ultimately, higher revenue.
By using employee spending accounts to satisfy even the most out-of-the-ordinary needs for your team, you can cement your organization as one that cares for its workforce inside and outside of the office. Consider the following examples.
A 35-year-old mother of two lives in an apartment building with a full-service gym. She has little use for a gym membership subsidy, but might appreciate assistance with the cost of daytime childcare. A 28-year-old college grad in tip-top shape has been off his parents’ health plan for two years and just enrolled in a high deductible health plan. He may not be interested in your company-sponsored health plan, but would certainly take advantage of any help repaying his student loans. A 48-year-old father just traded in his minivan for an all-electric sedan. He no longer needs help paying for gas with a commuter subsidy, but would value a way to pay for the EV charging unit and installation.
These are just a few examples of how dramatically employees’ needs vary. The onus is on companies that want to remain competitive and productive in today’s environment to make sure they offer benefits that are agile enough to meet the diverse needs of all their current and potential employees.
Address diverse employee needs with flexible benefits spending accounts
With four unique generations working under one workforce umbrella, the one-size-fits-all approach to employee benefits no longer works and likely will never work again. Instead, you must tailor lifestyle benefits to each employee to meet their individual needs. For example, Millennials and Gen Z employees may be more interested in wellness initiatives and student loan repayment, while Gen X and Baby Boomers might require more healthcare-focused benefits and retirement planning.
Benefits spending accounts, such as Health Savings Accounts (HSAs), Flexible Spending Accounts (FSAs), or Lifestyle Spending Accounts (LSAs) are often looked at as fringe benefits or perks. However, these accounts are actually a far more powerful tool than these labels imply. These accounts are alternatives or adjuncts to traditional employee benefits, come in all shapes and sizes, and have the capability to give your organization a significant competitive advantage. Employee spending accounts can cover pre-tax commuter savings accounts to post-tax spa benefits and virtually everything in between.
Design an employee spending account program for a dispersed workforce
The sky's the limit when it comes to crafting your employee spending account program. You might start from a conventional base set of benefits offerings, but you should work your way out to nuanced initiatives for all of your employees. A series of employee spending account offerings give you the leeway to be flexible here.
For example, starting with health insurance – a core benefit – you can ensure your employees have more robust and flexible coverage by setting up Health Savings Accounts (HSAs) or Flexible Spending Accounts (FSAs) for your team members. Both come with significant tax advantages, and both use the funds to cover qualifying medical expenses. However, they have some key differences to consider.
Employees own their HSAs, and both employee and employer fund them. On the other hand, employers own and fund FSA accounts, and the funds must be used by the end of the term year or it goes back to the employer.
Employees with high-deductible health plans, or HDHPs, can leverage an HSA. More often than not, your younger staff members will be enrolled in such a plan, as they often have fewer medical needs and don't require extensive health care. Therefore, HSAs may work better for them where they might not function for older generations.
Beyond the basics, it’s important to dive into the nuanced lifestyles of your team members. What are their unique situations? Which employee spending accounts can give them the benefits they want and need?
Ask employees for input to inform and build meaningful plans
Companies can't know what makes every team member tick. However, you can get a good sense of their needs by conducting comprehensive benefits surveys. After all, the best way to know what employees want is to ask!
Surveys can help you get to the heart of what each employee wants out of their employee spending account. Surveys can uncover ideas you may not have thought of already while giving helpful insight into the needs of a more introverted staff. And even after you've assembled their employee spending account packages, these surveys are an excellent tool for determining if they're working to their full potential. You'll see which benefits get used and which collect dust.
However, a survey is only as good as the questions it asks. Constructing well-rounded and informative questions is key to accumulating accurate data. Make sure you're specific in your questions and explain any proposed benefits fully. For example, if you're considering commuter benefits, explain what they entail. Do they cover parking? Gas? Bus? Train pass?
The survey answers provided are just as important as the questions themselves. Structure your employee spending account survey to present useful, accurate data. For preference questions, consider a ranked-choice answer section. When asking which benefits your employees want, you may use something similar to a Likert scale to determine how much use those benefits would get. For example:
- Gym membership subsidies: would use / might use / would not use
Basic yes/no questions can also uncover valuable insights into the strength of your current plans. You could ask the following questions to see if your current offerings stack up to your employee's needs:
- Are you satisfied with your current PTO amount?
- Have you already enrolled in our healthcare coverage?
- Are you satisfied with your current coverage?
- Is the deductible too high?
- Are your family members leveraging the company health plan?
- Are our benefits better than your previous employers?
Play around with the framing of those questions to get more specific answers. Instead of "are you satisfied…" try, "how satisfied are you…" Then, provide several options similar to your Likert questionnaire.
Some employees may feel uncomfortable sharing their feelings, and that's okay. Their opinions are just as valuable, so make sure that all survey responses remain anonymous. They may respond more honestly if they know their name isn't attached to the answers.
How Forma helps companies curate benefits spending account programs
With limitless options, every team member can put their own personal touch on their custom employee spending account. You can expect higher levels of productivity when your workforce has autonomy over their benefits. From traditional HSAs and FSAs to more nuanced expenses like childcare, gym memberships, and streaming subscriptions, competitive employee benefits are the only way to attract top talent in today's market.
To build out a robust employee spending account plan, organizations can use digital platforms like Forma to keep all their vendors, accounts, and offers in one place. With Forma, employees can build a custom employee spending account plan that works for them. They'll see everything you offer and, with the help of a pre-programmed Forma debit card, can spend money from their employee spending account as they please.
Forma's pre-vetted marketplace keeps all your vendors in one place, meaning HR doesn't have to chase them down for the latest rates and information. With powerful analytics tools, you can view real-time insights into benefits use, helping you track, adapt, and optimize your plans.
Get in touch with Forma today to build a benefits plan that will attract and retain top talent for years to come.