The problem: offering traditional one-size-fits-all perks is so 2010.

Most organizations today offer their employee some sort of employee perks. From free cold brew to meditation rooms to on-site gyms, the number of perks has continued to grow over the last two decades. However, as the number of perks continue to increase in an organization, so do the three main problems they create:


They're too expensive

The process of purchasing perks hasn’t evolved since perks first emerged, and so HR team members have to be involved picking, piloting, purchasing, managing, and maintaining a bunch of individual perks and vendor relationships themselves.


They're not flexible

Traditional perks do not solve for every single employee, such as for those working remote. Over time, employees without access to flexibility are 2x as likely to report being dissatisfied at work, and half of employees say they would leave their company if offered a more flexible alternative.


They're not inclusive

Because perks are often hand-selected by the organization – they, unfortunately, end up being generic in nature. Meaning, they’re often not what people would purchase given the money or funds themselves.


Why wage increases don't solve the problem

If a workplace environment doesn't fit with the conditions where an employee's brain can thrive, companies probably won't hold on to their best employees for long. While cash compensation matters in employees’ lives, it’s not all that matters. What really matters in the workplace is helping employees feel appreciated through the celebration of their diverse backgrounds.

Rewards that signal to employees that they did a good job and that their manager cares about them will encourage employees to want to work even harder. There is significant research showing that retaining employees aligns with tapping into three strong psychological needs: need for autonomy, need to show competence, and the feeling of a sense of belonging.

Could your employees be more engaged and productive at work? Sign up here for our webinar on how to retain your employees via perks.  

Monetary compensation does not satisfy these needs, and thus employees need a way to feel motivated, engaged, and committed to their workplace.

In most organizations, there are no perks programs that solve for the needs of every single employee in a way that is meaningful to them.

Employers need to catch up.


The solution: personalized perks

Creating a personalized perks program doesn’t have to be difficult to do. And if you’re a little bit innovative, you’re able to get a competitive advantage and join the few percentage that feel they’re very effective at personalized perks. So what’s the secret? How does a company personalize their employee perks?

By using a concept called Lifestyle Spending Accounts (LSA).

A Lifestyle Spending Account is an employer-created and contributed account for employees. They put the perk money in the hands of employees, so they can get the perks they want and need most.

Interested and want to learn more about LSAs? Click here to read our definitive guide on Lifestyle Spending Accounts and stay ahead of the trend. 

In the example below, Sam's company has allocated $100 per month for her and other employees to spend in the following categories: continuous learning, health & wellness, and food:

lifestyle spending account

This month, Sam purchased books, a gym membership, paid for a lunch with her team, and still has $20 remaining. Using a Lifestyle Spending Account, Sam is able to purchase the perks that are most meaningful to her life.

Sam now knows that her company encourages her to learn continuously, follow a healthy lifestyle, and nurture meaningful connections, which can have a tremendous impact in her loyalty, engagement, and satisfaction towards her current workplace.


How do Lifestyle Spending Accounts work?

Setting up a traditional perk program from scratch takes a series of steps and many months to do it right. A personalized-perk program like Lifestyle Spending Accounts (LSA) isn't too far off, but the process is much easier and in the end, employees are much happier.

These are the easy 5 steps to set up an Lifestyle Spending Account in your organization:

1) Identify your current and future EOY number of employees, and your total budget.

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:

perk stipends

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 you have implemented. 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.


What are the benefits of personalized perks?

When companies use Lifestyle Spending Accounts, they experience the following benefits:

  • Perks become inclusive: When employees are selecting their own perks, people no longer feel excluded. That way, the newly-graduated get to pay back their student loans, fitness fanatics can pick their preferred way of working out, and pet lovers get pet insurance.
  • Perks become personalized: Spotify, Airbnb, and social media feeds deliver a personalized experience. Lifestyle Spending Accounts does the same for perks. The needs of a single employee living in the city are different from a married employee with three children in the suburbs. Compt allows HR to provide benefits where their employees' needs are.
  • Perks become easier to administer and track: With the responsibility of choosing perks on the employee, HR no longer needs to pick, pilot, purchase, manage and maintain all of the individual perks and vendor relationships. Additionally, using a software to administer your lifestyle spending accounts often provides utilization reports so you can see the ROI.
  • Perks become tax compliant: Tax compliance becomes easier and CFOs and finance teams can rest easy knowing that all the data is there in case they are audited by the IRS.

Still not sure if customizing perks to fit all your employees is the right call? Just click here and be blown away by all the statistics backing them up.  


The time for personalized perks is now.

Back in 2010: 

Perks, when they first emerged over a decade ago, were considered “nice-to-haves” and employees’ expectations for them were low. Companies offered things that we today consider “fluffy” like snacks, free beer, ping pong tables, and massages. Also, because perks were considered a bonus by employees, there weren’t any formal processes or programs around them. There was often free beer in the fridge and snacks lying around, but it wasn’t a big deal when there weren’t.

Today in 2021: 

However, fast forward to today. The adoption of perks is growing, but the models of offering them haven’t kept up. Unlike many other industries, perks do not yet have any frameworks or processes defined for how to picking perks for a company. Most people are relying on prior knowledge, experience, and that of others.

Perks have transitioned into a “must-have” for every company as expectations are higher than ever. Employees are looking further than free snacks, and demanding more meaningful perks, such as workplace flexibility, wellness, student loan forgiveness, childcare, and continuous education. Perks are now a critical talent strategy that is becoming increasingly expensive.

Just think about how needs and preferences differ between generations, life stages, locations (remote vs in-office), health & wellness needs, etc.

Personalized perks offer diverse organizations the chance to better engage their employees and make them feel appreciated in the workplace.

That way, you are all winning together.


Compt is transforming the world of perks

Join the revolution to ensure your company attracts, engages, and retains top talent. Gain all the benefits of offering hyper-personalized perks with none of the added complexity.

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