When do companies consider using Lifestyle Spending Accounts?
Whether you're creating a perk program from scratch or looking to make updates to an existing one, adding personalization to your perks program can achieve many of the same goals that traditional perk programs do, while giving you (and the rest of your organization) more benefits.
Companies usually begin looking to LSA's when they:
- Want to offer perks that offer any of the benefits mentioned above (e.g. personalized, cost-effective, scalable, cater to remote teams, and want to be IRS-compliant).
- Want to offer more comprehensive and diverse perks to their employees without actually having to purchase and manage individual perks and vendors. Why invest time researching, buying, and managing pet insurance or and in-office smoothie bar, when only 5% (or less!) of your team will use it?
- Want to offer perks, but lack the money and time to manage a personalized perks program.
The 5 simple steps to setting up a perk allowance or Lifestyle Spending Account:
Setting up a traditional perk program from scratch takes seven steps and constant tweaking to get it right. Lifestyle Spending accounts aren't too far off, but the process is much easier and in the end, employees are much happier.
Follow these 5 steps to set up a perk stipend program:
1) Identify your current number of employees and your total budget for employee lifestyle spending accounts.
2) Determine how much you'd like to spend per employee per timeframe. Timeframes could be monthly, quarterly, semi-annually, annually, or a one-time basis.
3) Select categories for employees to spend in. These could align with company mission, values, goals, or be 100% open to give employees complete freedom over their perks. Some popular categories include: health & wellness, continuous learning, family, food, and travel. Some of of Compt’s perk stipends (categories in which employees can spend their perk money in) are the following:
4) Set up your program. If you use a perk management software like Compt, this could take 15 minutes. If you're doing it manually - develop a spreadsheet/form where you can manually track the individual perk expenses, total amounts remaining within each time-frame, collect receipts, account for taxes, data for finance, and status of each perk expense.
5) Last, but not least, communicate it to the team. Draft up an email, or better yet, a page on your internal wiki to communicate the new perks plan. Remember to explain the why, what, when, and how details. Lastly, supercharge your communication plan by creating a forum for people to provide feedback, whether it's a form for them to complete or holding a series of office-hours.