Lifestyle accounts offer employers a way to stand out for top talent

Amy Spurling started Compt to provide a benefit that would make more employees happy and do it in a way that scales for a business

Lifestyle accounts offer employers a way to stand out for top talent
Amy Spurling, founder and chief executive officer, Compt

In a world where labour shortages continue to plague businesses, employers need a way to stand out to remain competitive for top talent.

Many companies offer competitive compensation ranges and standard benefits like paid time off (PTO) and medical, dental, and vision benefits. But how can they stand out?

Research from Compt, an employee lifestyle benefit platform, shows offering lifestyle spending accounts has emerged as a powerful way for employers to differentiate themselves in a crowded hiring market.

Lifestyle spending accounts can offer more advantages to employers than just a competitive edge to appeal to job seekers. The research shows lifestyle benefits directly impact employee engagement and retention, promote an inclusive company culture, and they are relatively inexpensive compared to salary.

Compt says this trend towards expanded and unique employee lifestyle perks and benefits – and away from the cookie-cutter basic benefits packages – has been a long time in coming. Employees have been wanting more personalization and flexibility in their total compensation for years.

In previous years, studies revealed about 60 percent of people considered benefits and perks to be a major factor when deciding to accept a job offer and 80 percent of employees would choose additional benefits over a pay raise. 

Lifestyle benefits improve overall lifestyle

Lifestyle benefits, also known as employee lifestyle perks, are non-salary benefits given to employees to improve their overall lifestyle and which go above and beyond standard medical, dental, and vision benefits.

“This means companies allocate funds for people to spend on things like wellness or family benefits and it allows people to determine how and when they want to use those funds,” says Amy Spurling, founder and chief executive officer of Compt.

The top 10 categories where these accounts are spent include health and wellness (19 percent), food (18 percent), family (11 percent), ‘treat yourself’ (10 percent), internet (seven percent), cell phone (six percent), remote work office equipment (five percent), personal travel (four percent), professional development (three percent), and tech (one percent), according to Compt’s Lifestyle Benefits Benchmarking Report: Emerging Trends in 2024.

“We're not a marketplace, so people can use and spend their stipends wherever they would like and you can see what that personalization and that kind of freedom looks like for employees,” says Spurling.

She adds that she finds the “huge skew” of choices quite interesting. Additionally, she saw that most of the vendors used are small, local businesses, which supports local communities.

Spurling says companies can bring in benefits like student loan forgiveness, childcare, or mental health apps, but not every employee is going to use those benefits. Spurling wanted to provide a benefit that would make more employees happy and do it in a way that scales for a business.

Align offerings with company values and culture

Employers can set up what the stipend can be spent on – Compt currently offers 70,000 vendors – and they can offer areas that align with the company’s values, company culture, and brand. “We work with them on that so that employees have guardrails, but then freedom within that.”

However, “we find most companies just want their employees to be happy and healthy, so they let them do whatever they want with their stipend.” This allows the company to reach every employee based on their individual needs.

It comes down to attracting and retaining talent and supporting company culture, says Spurling, especially during a time of labour shortage. In addition, “we’ve seen a shift happening across industries over time from more paternalistic companies that like to have control to more laid-back companies that offer employee perks and lifestyle-type benefits. We've seen this migrate across to other industries over time and now it's becoming a very common thing that's being discussed across industries.”

She says another benefit to offering a lifestyle spending account “is that you don't have to have a big budget to start with something like this. You would spend less dollars on the benefit but have a bigger impact on whether or not you retain your employees.”

Benefits of offering lifestyle spending accounts

Compt’s research shows that lifestyle spending accounts have several advantages for employers, including:

  1. Lifestyle benefits help give your company a competitive edge among current and future talent

Offering lifestyle spending accounts has emerged as a powerful way for employers to differentiate themselves in a crowded hiring market while allowing them to stay true to themselves.

  1. Lifestyle benefits directly impact employee engagement and retention, two persistent people challenges with moving targets

Even companies with very generous overall benefits packages can suffer from low employee engagement and productivity. Offering employee lifestyle benefits that are customized to employees’ unique needs is hugely beneficial for companies wanting to increase employee engagement and retention in this current climate and in the long term as workplace conditions evolve.

  1. Lifestyle benefits promote an inclusive company culture

Now, more than ever, companies have the responsibility to not only prioritize creating diverse and inclusive workplaces but also put action behind those intentions. Lifestyle benefits can be designed in a way that addresses all of the needs of a diverse workforce, whether that means supporting an employee who’s a 22-year-old recent graduate who lives in the city with a cat or a 55-year-old executive with three kids and a home in the suburbs. Lifestyle benefits, particularly in the form of flexible perk stipends, are ideal for that type of personalization and inclusivity.

  1. Lifestyle benefits are a smart financial decision, as they are relatively inexpensive compared to salary

There are many reasons an employer might not want to or be able to offer a pay increase to employees. When increasing their compensation isn’t an option, offering meaningful lifestyle benefits can be powerfully effective in making them feel supported – sometimes even more than a simple pay bump – while also being very cost-effective for the company, especially if the company uses a lifestyle benefits platform to reduce the administrative burden.