How Life Planning Accounts Can Meet Employees’ Evolving Needs

Life planning accounts have never been more vital

HR teams face a multi-dimensional crisis when hiring and retaining employees. First, high inflation and other economic stresses tighten balance sheets and make investing in human capital more difficult. Second, the talent competition is ferocious and turnover rates have surged. Lastly, employee demands and expectations have changed dramatically – workers want more support and greater flexibility than ever before.
 

In other words, HR professionals have to get creative with the benefits they offer their workforce. One of the best ways to meet employees’ needs without putting extra strain on the budget is by establishing life planning accounts (LPAs). Companies can use LPAs to offer employees a spending account that gives them a wide array of useful reimbursements tailored to their specific needs – from healthcare to retirement savings to financial planning.

In addition, LPAs can be customized to fit any company’s budget while giving individual employees options that appeal to them.

LPAs provide the flexibility employees want without significantly increasing the company’s expenditures, which makes them powerful and cost-effective tools for improving employee well-being and engagement. However, to fully leverage LPAs, companies have to focus on how they are funded, administered, and communicated to employees. We recently published a whitepaper that examines each of these areas and provides a guide for how companies can use LPAs most effectively, so let us take a closer look at a few of the key points.

Funding and Covered Services

After over two years of working remotely, employees prioritize independence and flexibility like never before. According to a recent survey conducted by Deloitte, 94 percent of employees say they would “benefit from work flexibility, with the top gains being less stress/improved mental health, and better integration of work and personal life.” This is why your LPA should offer many options that appeal to a diverse group of employees, regardless of their age, career aspirations, or work environment.

Traditional wellness programs often fail to meet the needs of modern and increasingly diverse workforces – for example, on-site health services, such as gyms or bicycle storage do not help remote workers. LPAs, on the other hand, give all employees a range of opportunities – from yoga classes to exercise equipment to nutrition counseling (to stick with the health and wellness example).

Companies can seek input from employees about their top needs to ensure their LPA program offers the best selection of services possible. Employees can use their LPAs to cover unexpected expenses, travel, tutoring or daycare, and just about anything else.

Companies also have to decide how they want to fund their LPAs; it’s vital to find a balance between financial benefits that employees view as negligible and benefits that place too much stress on the budget (an annual contribution of around $1,000 per employee is a good guideline). HR teams can also reallocate funds from under-used benefits to reduce the cost of the program. And no matter how companies deploy LPAs, they need to make sure they have broad stakeholder support.

Transparency and Open Communication Are Essential

When an HR team decides to implement an LPA, the first step is to have an open discussion with employees about which benefits they need. Companies should never make assumptions about the benefit their employees find valuable. Instead, they should conduct focus groups, send out surveys, and have one-on-one conversations to determine which services will benefit their employees the most.

The whole purpose of LPAs is to help out your workforce as much as possible, so the process of developing the program should be employee-centric.

Once you have an LPA framework in place, it is crucial to educate employees about the services they are receiving as a part of the LPA and how to access those benefits. Create a simple and intuitive single document that includes what is covered, eligibility requirements, and how to collect reimbursements. Then use every communication tool your company has available to distribute this information across your workforce – email and text messages, social media, Zoom calls, and in-person meetings. Employees cannot take advantage of the LPA if they do not know it exists.

At a time when just 21 percent of employees are engaged at work and a mere 33 percent say they’re thriving (according to the latest data from Gallup), it is clear that companies have a lot of work to do when it comes to building healthy work environments. LPAs can help companies engage employees by opening up lines of communication about their specific needs and concerns.

The process of building an LPA will not just provide benefits employees will actually use, but it will also make them feel like their voices are being heard.

LPAs Give Companies a Competitive Advantage

While almost two-thirds of new hires say they prefer flexible benefits over cash incentives, just 10 to 15 percent of midsize to large employers offer LPAs. Our research also indicates that similar benefits (such as flexible paid time off) are extremely popular with employees – 70 percent say these benefits would make them feel valued and appreciated while 90 percent say the benefits would make them more likely to stay with their current employers.

As companies struggle to recruit and retain employees, LPAs and other flexible benefits can inspire loyalty, which is something employers need now more than ever before.
To get the most out of your LPA, consider outsourcing administration to a third party with streamlined payroll interfaces and automated processes to make it easier for company leaders and employees to use and manage.  

These third parties sometimes offer online marketplaces that provide discounts and other useful benefits to employees that they can access through their LPAs. The last thing you want is for your LPA program to go unused because they do not know how to use it.

Regardless of how you deploy your LPA, employees will thank you for benefits that meet their unique needs. This will not just make for a happier and more productive workforce – it will also give you a critical advantage in a labor market that is becoming more competitive by the day.

Author Bio

Rob Whalen is Co-Founder and CEO of PTO Exchange. Visit www.ptoexchange.com Connect PTO Exchange