10 Employee Benefits Trends for 2023

Crawford Thomas Recruiting Blog

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What’s in store for employee benefits in 2023? Catch up on the top trends we’re seeing.

HR teams have seen enormous disruption to traditional office structures over the last few years. As the dust settles from the pandemic, leaders are faced with a workforce that has new demands surrounding remote work, work-life balance, and employee benefits. 

Stress from the pandemic, inflation, and global dynamics has also caused many employers to want to take care of their employees more than ever. Employers want to offer the right benefits that meet the unique needs of their teams and address all dimensions of employee wellness. It’s proven that employees who feel valued professionally and personally are more likely to be engaged at work, leading 92% of HR leaders to set employee experience as a top priority in recent years. 

Employee benefits are one piece of the employee experience that go a long way in improving recruitment, retention, and employee engagement. Below we’ve listed 10 employee benefits trends that we expect to see in 2023. Understanding these emerging trends will help you meet employee expectations as you plan new benefits programs and revisit existing ones in the new year.

1. Flexible spending accounts

The 2022 Benepass Benefits Benchmarking Guide analyzed our customer data to reveal trends in benefits and perks. For pre-tax benefits, flexible spending accounts (FSAs) came out on top, with 93% of pre-tax customers opting for FSAs and 80% choosing to offer employees dependent care FSAs (DCFSAs). 

FSAs help employees set aside pre-tax dollars for eligible healthcare expenses. With rising health insurance costs in 2023, these accounts will continue to be a popular way for companies to help ease stress related to expensive healthcare costs. Employees can use these accounts to pay for OTC medications, vaccinations, eyeglasses, flu shots, menstrual care products, and more. 

DCFSAs also help employees save pre-tax income for routine expenses associated with child and dependent care. With 90% of companies requiring employees to return to the office in 2023, employees may have new dependent care needs and require additional support in this area. 

2. Personalized benefits

Employees today are looking for a personalized experience when it comes to their benefits. In the modern workplace, companies are catering to multiple generations and employees who may be working from all corners of the world. This is why it’s important in 2023 to consider whether your benefits are able to meet a wide variety of wants and needs. 

“People are looking for more and more flexibility, and that flexibility allows them to focus on what their priority is at the time,” said Rob Heir, VP of Total Rewards at Bright Health. “Are they focused on retirement? Are they focused on health benefits? Are they focused on flexible work? The more flexibility that your package provides, it allows people to migrate to what’s important to them.” 

lifestyle spending account (LSA) is a benefit option that gives employees more choice over how they use their benefits and allows them to customize their benefits to their unique needs. LSAs are pre-funded accounts that employees can use to pay for a wide range of eligible expenses such as wellness, mental health, professional development, childcare, or food. LSAs are fully customizable, giving you more flexibility to design a program that’s adapted to your employee base and your company’s goals. 

Our benchmarking report found LSAs to be the second-most popular perk, with 37% of companies offering them at an average of $171 in monthly funds. A recent Mercer survey also discovered that 70% of companies are considering adding an LSA to their benefits package because they empower companies to increase employee compensation, reduce point solution fatigue, and create more inclusive benefits programs. 

3. A focus on DEI

To the last point above, a modern benefits package cannot be built without thinking about diversity, equity, and inclusion (DEI). A 2021 survey from Willis Towers Watson found that 80% of employers said they would take steps to promote DEI in their workplace culture and policies over the next three years. This includes carefully examining your employee benefits programs for how much they promote DEI values. 

“Going into the new year, we believe more companies will be analyzing their comprehensive benefits package from a diversity and inclusivity lens,” said William Crawford Stonehouse III, founder and president of Crawford Thomas Recruiting. “So assessing not just what are our benefits, but do they serve the population of people we have working for us? Do we need to custom tailor them or do we need to provide additional educational resources?”

Michelle Kerr Stenzel, CHRO at Turnberry Solutions, shared that her team considers key company values like inclusion when updating their benefits package: “One of our five core values is inclusion, so we look at our benefits from that lens of, ‘Are our benefits inclusive for all the ways that families come to be? Are our benefits inclusive for all family structures or couple structures?’ We took a hard look at our benefits a couple of years ago with that in mind.”  

Flexible family formation benefits are a great place to start and can provide coverage to everyone regardless of gender, sexual orientation, marital status, or medical condition. More organizations are offering fertility benefits, but only 1 in 5 companies that offer them also offer coverage for adoption assistance. Families that want to adopt are faced with astronomical costs, spending anywhere from $15,000 to $40,000 throughout the process. Today, leading organizations such as American Express reimburse employees up to $35,000 of adoption and surrogacy costs for up to two children. 

Family formation benefits are just one example of a flexible benefits account that can promote DEI values. Ultimately, any benefit that can be moved into a flexible account will improve from a DEI perspective because it will be easier to support a more diverse set of wants and needs. 

“We’ve also seen a focus on DEI, from modernizing eligibility, coverage exclusions, and definitions to new benefits addressing the needs of employees across all age ranges,” said Matt Lister, CEO of CloudAdvisors, a Canadian employee benefits marketplace. 

4. Global benefits parity

There are many benefits to a global workforce, including a wider hiring pool, new and diverse perspectives, and the opportunity for current employees to stay with your organization wherever they live. As companies continue to hire globally in 2023, we expect to see more consideration for benefits parity, or the ability for companies to provide the same level of benefits across all locations where employees reside. 

Lifestyle spending accounts and other flexible benefits accounts are well-equipped to provide parity because of their ability to support a wide range of vendors regardless of where employees live. Traditionally, many companies have opted for hyperlocal perks such as onsite gyms or discounts to services located near their headquarters. But in today’s globalized workplace, these offerings won’t carry as much value. 

“Given our growing footprint, it no longer makes sense to provide super-local perks and benefits everywhere,” said Kelly Wakefield, Senior Manager of Global Benefits at Moderna. “It’s just not scalable, and that approach doesn’t work when you’re a global company. We had to revisit what would work best for our diverse teams, and a lifestyle spending account seemed like a unique offering that would allow people some flexibility to choose what matters most to them.” 

5. A focus on all dimensions of wellness

In the modern workplace, our idea of wellness has evolved. Many companies have traditionally focused on the physical side of wellness and believed they were doing their job by offering healthcare benefits or discounted gym memberships. 

Our benchmarking report highlighted that employers are thinking about all the dimensions of wellness when building out their benefits. Physical fitness remained important, but there was a new emphasis on other areas of wellness such as emotional wellness, occupational wellness, social wellness, spiritual wellness, intellectual wellness, environmental wellness, and financial wellness. 

Crawford Thomas Recruiting10 Employee Benefits Trends for 2023