6 Takeaways From the 2022 Benepass Benefits Benchmarking Guide

Open enrollment is right around the corner, and that means HR and benefits leaders are hard at work designing and updating their benefits for 2023. Part of that work includes benchmarking your benefits to understand how your offerings measure up in the market against your competitors and companies of similar size and industry. 

Today, this task is even more challenging. Employers are contending with so many factors outside of their control, from changing demographics to an increase in hybrid and remote work to the uncertainties of a looming recession. Companies need to get creative with employee benefits to attract and retain talent, but they must balance this reality with the very real macroeconomic forces at play.  

We wrote the 2022 Benepass Benefits Benchmarking Guide to help HR leaders understand the current benefits landscape and create packages that make the most sense for their workforce and business. The guide leverages our internal customer data to reveal pre-tax benefits and perks trends and highlight what employers are including in flexible benefits packages.

Below are six takeaways from the report.

1. Flexible spending accounts are popular among pre-tax benefits

Of the various types of pre-tax accounts, flexible spending accounts (FSAs) are the most popular. FSAs are a great way to help employees save pre-tax dollars for eligible health care expenses, but they often require some education so employees understand how they work and what happens to unused funds at the end of the year. It’s worth noting that dependent care FSAs (DCFSA) rank second, even above health savings accounts (HSAs). During the COVID-19 pandemic, parents faced the stress of working from home while their children were in the next room due to closed daycares and schools, raising our overall consciousness of what it means to be a working parent. The popularity of DCFSAs suggests employers continue to explore how to support parents so they can be their best, most productive selves at work. 

2. A monthly cadence for replenishing benefits is the sweet spot

Across all benefit types, most employers contribute to funds every month. This cadence is a win-win for employers and employees. Employees feel the joy of the benefit on a more regular basis, while employers save more since they can set “use it or lose it” rules that allow unused funds to expire at the end of the month. One-time benefits are most common among work-from-home (WFH) benefits so employers can help new hires set up their home offices for success. In other categories, employers may choose a bi-weekly, quarterly, or annual cadence depending on their goals and whether they want to allow employees to accrue the funds to spend on big-ticket items. 

3. Personal and professional well-being is at the core of many benefits strategies

Across all company sizes and industries, the most popular types of perks are fitness and wellness, lifestyle spending accounts (LSAs), and WFH. Employees today want to work for organizations that care about their well-being, so it makes sense that companies are searching for new ways to prioritize employee wellness, especially as remote work blurs the line between work and home. LSAs are essentially non-salaried allowances that employees can use according to their personal preferences. They are a popular option because of their flexibility. Employers set eligible spending categories and then employees can spend the funds however they wish. This allows companies to meet a wider set of needs and wants with their benefits. 

The popularity of work from home stipends suggests companies are continuing to support remote work and want to make it as seamless for employees as possible. Regardless of benchmark segment or industry, many employers provide $500-$1,000 in WFH benefits, which allows employees to purchase high-cost items like a new desk or office chair. 

4. Most companies offer $50-$200 in monthly perks

Companies usually offer around $50-$200 in monthly perks. This is a range that allows employees to purchase full items or services so they can get the most out of the benefit. Below this amount, employees may struggle to feel its impact or have to spend more out of pocket to participate in wellness activities. It’s important to think not only about your budget but also about the goals of the program when choosing how often to contribute.

5. Fitness, nutrition, and mental health are common LSA pillars

The most common LSA spending categories include fitness, nutrition, and mental health. These are traditionally the areas that immediately come to mind when we think of well-being. Recently, there has been a wider public acknowledgment of the importance of mental health following the COVID-19 pandemic and social unrest of the past few years. Overall, most companies have LSA programs that cover a wide range of categories, including spas, food, travel/vacation, pet care, and parental support. 

This signals that companies are seeking to provide benefits that are highly personalized and flexible. Employers are expanding their understanding of wellness beyond what we have historically thought it to be. 

6. Employers are getting more and more creative

While the majority of benefits fall under a handful of key categories, flexible benefits accounts are empowering companies to be more creative with what they offer employees. For example, some companies offer a home services benefit so employees can pay for cleaning services, trash pickup, or water treatments. Some companies provide entertainment or cultural experience benefits to help pay for podcasts, Spotify, streaming services, concert and theater tickets, and more. Other unique benefits include one-time rewards to celebrate new hires, birthdays, or work anniversaries and travel benefits for employees to spend on personal vacations and rental homes. 

Get more insights

Clearly, the benefits landscape is rapidly changing, and companies need to be competitive to recruit and retain top talent in today’s market. To learn more about how people-first companies are designing top-tier, flexible benefits programs, download the 2022 Benepass Benchmarking Guide.