Employee benefits have arrived at a place where personalization tailored to individual needs are no longer simply nice to have, they are now non-negotiable for today’s workforce. This shift is part of a larger evolution towards hyper-personalization and precision-targeting across industries, with significant emphasis on employee benefits and total rewards.With over 50% of employers investing more in Lifestyle Spending Accounts(LSAs), the trend towards personalized benefits is clear1. These developments speak volumes about the changing face of workplace benefits, aiming to satisfy the multi-faceted needs of today’s workforce.
Common use cases for anLSA include wellbeing, personal/professional development, and even remote work support. Additional categories can also be enabled for alternative health, nutritional health, charitable giving, aesthetic services, and many other lifestyle benefits. Other popular categories include cell phone and internet reimbursement, as well as food delivery and meal service subscriptions. Some groups even set up categories specific to their work culture and environment including personal protective equipment (safety glasses, hard hats, works boots and gloves, etc.), as well as personal expression for tattoos/piercings, along with unique entertainment options.
Hyper-Personalization: The New Frontier in Employee Benefits
Personalization is an expectation across the vast array of employee benefits and employees expect to have their individual needs met. The rapid rise of LSAs is a testament to the broader movement towards hyper-personalization. Under 10% of employers offer their employees an LSA today, but 70% of employers are looking to offer an LSA to their employees in20242. This shift is driven by the recognition that employees expect the same level of guidance and personalization in their benefits as they do in other areas of their lives7. For example, personalized vitamins& supplements, products from sneakers to automobiles, as well as fitness goals and recommendations.
LSAs offer a unique opportunity to personalize rewards and compensation, enhancing the employment experience, and highlighting the value of a total rewards package. When employees feel appreciated, they are 92% more likely to be engaged and 56% more likely to be productive at work4.LSAs can also make an impact on talent by giving employers an advantage in recruitment and retention. For company culture, it enables the opportunity to provide personalized incentives and more inclusive and holistic benefit offerings.
The Post-Pandemic Benefits Landscape
The post-pandemic world has introduced new challenges and opportunities for employee benefits consultants and employers designing benefits packages. There is a pressing need to ensure benefits designs are robust yet simple enough to encourage participation. The key to success lies in offering benefits that genuinely add value, rather than merely adding bells and whistles5. Research supports this, noting that flexibility is one of the top three considerations for employers when picking a solution1. This era demands a careful enhancement of benefits, focusing on inclusivity and filling gaps in current offerings.
Avoiding Overload Through Strategic Personalization
One of the challenges in creating personalized benefits packages is avoiding “point solution” overload3. A point solution isa specific service a vendor provides within a benefits program, typically offered by a new company looking to fill a gap. Employers seek to provide meaningful, personalized benefits without overwhelming employees with too many options. LSAs stand out as a comprehensive solution, capable of addressing diverse needs without overcomplicating the benefits landscape. This approach aligns with advice for employers to look for opportunities to add value in a thoughtful manner, ensuring that every addition to the benefits package serves a clear purpose5.
Catering to Holistic Health Needs
The modern workplace recognizes the importance of catering to all forms of health: physical, mental, financial, emotional, and social6. A well-rounded benefits package is essential for ensuring employees feel appreciated and engaged. Employees who feel valued are significantly more likely to be productive and engaged at work. The high expectations employees have for their benefits reflect this, with 93% viewing them as a 'must-have' rather than a ‘nice-to-have’2. LSAs, for some employees, are as critical as medical, dental, and vision insurance as they meet employee’s individual needs.
Meeting the Needs of a DiverseWorkforce
With five generations currently in the workforce, employers face the challenge of delivering benefits that address the varied needs of their employees. This demographic diversity requires a benefits strategy that is both inclusive and flexible. Benefits need to be exciting and supportive, offering meaningful value to every employee's daily life. Let’s look at some differing, personalized needs of people at varying stages in their life.
Recent graduates may bethinking about student loan debt, staying healthy, and pet care. A young mother may be distracted by taking care of dependent care expenses, school supplies and being recognized at work for her dedication. Finally, someone on the tail end of their career may be focused on asset creation in their HSA, taking time for themself by going to the spa and traveling. If you can meet the diverse needs of the entire workforce, you stand to attract and retain the highest talent.
The Employer of Choice: Elevating Retention with Personalization
Top employers are leveraging personalized LSAs to become the 'employer of choice' by offering benefits that meet the dramatically unique needs of their workforce. By subsidizing a variety of daily living services and products, LSAs allow employers to address benefit gaps with a targeted and inclusive strategy. This approach ensures that every employee finds something meaningful in their benefits package, enhancing retention and satisfaction2. The move towards LSAs and personalized benefits is a strategic response to employees' growing desire for benefits that impact their everyday lives and offer genuine value.
Embracing the Future of Personalized Benefits
The shift towards personalization and tailored benefits is undeniable. The adoption of LSAs and other personalized benefits strategies, coupled with pre-tax benefits like Flexible Spending Accounts, (FSAs), HealthSavings Accounts (HSAs), and Tuition benefits will likely continue to grow.Employers who embrace these changes, focusing on adding value and meeting the diverse needs of their workforce will position themselves as leaders in attracting and retaining top talent. The evolution towards hyper-personalization in benefits is not just a trend, but a reflection of the changing expectations of the workforce. By adopting a targeted and flexible approach to benefits, employers can ensure their offerings are not just a safety net, but a launching pad, inspiring loyalty, and engagement among their employees.
Contact Us
To learn more about personalized benefits, contact Bill Pratt bill.pratt@thrivepass.com or Marcy Eberhard marcy.eberhard@thrivepass.com to learn more about the data ThrivePass has collected that will help consultants and employers begin the journey of personalization.
References
1Wellable – PDF Presentation
Insights from Wellable’s (2024) EmployeeWellness Industry Report
Blueprint for Balance
2HUB International - Pre-recorded Webinar
Cherveny, C., King, W. Published(October 18, 2023)
Lifestyle Spending Accounts (LSAs): A Creative and Impactful Way to Enhance Compensation and Value-added Benefits
3Brown & Brown – PDF Presentation
MetLife’s 21st Annual U.S.Employee Benefit Trends Study (2023)
The Advantages of Employee Care: Creating human-centric employee experiences and work environments
4MetLife - PDF Presentation
MetLife’s 21st Annual U.S.Employee Benefit Trends Study (2023)
The Advantages of Employee Care: Creating human-centric employee experiences and work environments
5Mercer - PDF Presentation
Mercer’s Health & Benefit Strategies for (2024)
Survey on Health & BenefitStrategies for 2024 Report
6LIMRA - PDF Presentation
LIMRA’s (2023) Workforce Benefits Study
Harnessing growth and seizing opportunity
7MAQE, Insights - Website article
Karl S. (February 4, 2022)
Personalization Psychology – Why WePrefer Personalized Experiences
