A potential new tool in employee retention fields. In this newsletter we are looking at why Lifestyle Spending Accounts are gaining popularity.
LIFESTYLE SPENDING ACCOUNTS CAN POSITIVELY IMPACT RETENTION
If you’re in need of a spa day but can’t afford one, don’t worry—your employer will pay for it. Or it might, if it offers a lifestyle spending account (LSA).
LSAs came onto the scene in the 2010s, but employers really started to take notice of them in the last few years, Kevin Robertson, executive director and CRO of HSA Bank, told HR Brew. Some 51% of employers surveyed by benefits provider Benepass offered an LSA benefit in 2023.
LSAs could positively impact employee retention, according to ADP research, because of their potential to help improve employees’ financial well-being. Some 74% of US employees said they are more likely to leave their job for one that offers better financial wellness benefits, a survey by Betterment at Work found. Learn more
WHAT DOES THIS MEAN FOR HR?
"As workforces continue to become more diversified and employees strive for flexibility and choice throughout their work experience, employers are increasingly turning to personalized benefits. In particular, employers are increasingly leveraging lifestyle spending accounts to meet employees’ diverse benefits needs and their drive for empowerment.
Lifestyle spending account (LSA) programs are employer-funded accounts that employees can use for everything from gasoline to drive to the office, athletic shoes for exercise or to pay for meal deliveries to make work/life balance easier. A whopping 70% of employers are considering adding lifestyle spending accounts to their benefits package in the future, up from 13% that currently provide them or plan to by next year, according to a Mercer Insights blog post.
The growing popularity of LSAs fits into the larger trend toward personalized benefits, particularly coming out of the pandemic. According to a 2021 survey by WTW, nearly 70% of employers were considering personalized benefit programs—which, experts say, can become a strong recruiting and retention tool." Learn more
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