6 Takeaways from the 2023 Benepass Benefits Benchmarking Guide

Every company wants to be an employer of choice, or an organization that attracts top talent because of its strong culture, effective leadership, meaningful work, and competitive compensation. Employee benefits are a huge part of this equation, but it’s challenging to know if your company is providing programs that truly stand out. 

Companies conduct benchmarking to understand how their benefits stack up against companies of a similar size or industry and to make informed decisions about benefits design. It’s one tool HR and benefits leaders can use to plan stronger benefits. 

Last year we published our first benchmarking report, which revealed that companies were prioritizing benefits strategies with flexibility and employee choice at their core. Flexible lifestyle spending accounts (LSAs), fitness and wellness accounts, and WFH stipends topped the list of employee perks companies offered in place of traditional one-size-fits-all benefits. 

The 2023 Benepass Benefits Benchmarking Guide leverages internal benefits data from large, medium, and small U.S. businesses across a variety of industries. It dives into top pre-tax benefits, top perks programs, average stipend contributions, and LSA design trends so employers can design more competitive benefits. 

We collected the top takeaways from this year’s findings below. 

1. HSAs rise in popularity, along with transit and parking accounts as more companies RTO

Health FSAs, HSAs, and DCFSAs have remained the top three types of pre-tax accounts in 2023. While DCFSAs were the second-most popular type of account in 2022, HSAs took this spot in 2023. While family and childcare support is still a priority for employers, it may be moving down the list as pandemic-era pressures continue to subside. Transit and parking also became more popular than limited purpose FSAs, which might reflect a greater need to help employees with commuting costs as more companies implement return to office plans in 2023. 

2. LSAs grow as companies seek to provide flexibility

LSAs were more popular in 2023, with 51% of companies offering them compared to 37% in 2022. As companies catch onto the unmatched levels of flexibility that these accounts offer, we expect LSAs to continue growing. A staggering 75% of large companies provide an LSA in 2023 compared to just 40% in 2022. Small and medium-sized companies have also rapidly embraced LSAs, with medium-sized companies seeing a 33% boost and small companies increasing LSA adoption by 10%.

Employers can cover just about any spending category in an LSA, so we’re also seeing a trend of expanding eligibility within an LSA. While companies used their LSAs to cover eight to nine spending categories in 2022, they included 11 to 12 spending categories this year. The more common LSAs become, we’ll see that number grow as companies embrace the flexibility. Two bellwether industries in the benefits space, tech and healthcare, saw strong growth in the adoption of LSAs with tech companies seeing a 25% increase and healthcare and life sciences companies seeing a 21% increase in LSA offerings. 

3. Fitness and wellness accounts round out the top two benefits in all industries

Across all industries, LSAs and Fitness & Wellness accounts were some of the top stipends offered to employees. Employers are continuing to think about how they can care for employee health and well-being, and these types of stipends are geared toward holistic wellness. They allow employees to purchase gym memberships, fitness equipment, massages, acupuncture, online therapy, and more. These were the top two accounts in every industry except tech, where WFH stipends were the most popular. Among the industries we analyzed, tech is the one where remote work remains the most prevalent, so it makes sense that employers continue to prioritize spending in this area. 

4. Professional enrichment and food benefits saw a sizable boost in average contributions

Similar to 2022, companies usually offer $50-$200 in monthly perks except for heftier benefits like parental support, WFH, and travel stipends which tend to be annual contributions. The largest increases in average contributions from 2022 to 2023 were in professional enrichment and food benefits, which grew by 35% (a $258 increase) and 84% (a $75 increase) respectively. When budgeting for benefits, companies should consider employee needs, workforce demographics, and program goals. Flexible benefits plans offer a lot of freedom in how much and how often employers contribute funds, but these decisions should be based on real data and feedback. 

5. Companies expanded the flexibility of their LSAs in 2023

The most common LSA spending categories include fitness, mental health, and nutrition. These categories cover both physical and emotional wellness and are the areas that may immediately come to mind when we think of well-being. As mentioned earlier, companies covered a greater number of spending categories this year, with companies of all sizes including 11 to 12 categories in their LSA. WFH and home services were two categories companies rolled into LSAs this year. 

6. Charitable giving emerged as a new LSA spending category

Companies are harnessing the flexibility of an LSA to spin up eligible categories in response to current events like the war in Ukraine. Millennial and Gen Z employees in particular want to work for values-driven companies, with one Deloitte study revealing that 77% of Gen Z respondents consider it important to work for a company whose values align with theirs. Providing opportunities for employees to donate money to charitable causes demonstrates a commitment to strong company values. 

Get more insights

The benefits landscape is always evolving, so it’s important to stay aware of trends as they arise. To learn more about how people-first companies are designing top-tier, flexible benefits programs, download the 2023 Benepass Benefits Benchmarking Guide.