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10 Employee Benefits Trends for 2023

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


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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. 

Flexibility is key, as Rob Heir, VP of Total Rewards at Bright Health, says:

“People are looking for more and more flexibility, and that flexibility allows them to focus on what their priority is at the time. 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.” 

A 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.

William Crawford Stonehouse III, founder and president of Crawford Thomas Recruiting, believes more companies will carefully examine their 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. 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, shares 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. 

Matt Lister, CEO of CloudAdvisors, a Canadian employee benefits marketplace, has also seen a greater emphasis on DEI:

“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.”

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. 

Kelly Wakefield, Senior Manager of Global Benefits at Moderna, describes why the company restructured their benefits programs:

“Given our growing footprint, it no longer makes sense to provide super-local perks and benefits everywhere. 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. 

At the heart of this shift is the ability of flexible benefits accounts to empower more creativity when companies are designing benefits programs. Because they are so customizable, companies are using LSAs to support a more holistic view of wellness.

For example, we have seen companies offer a home services benefit so employees can pay for things like cleaning services, trash pickup, or water treatments. Some companies provide entertainment or cultural experience benefits to help pay for podcasts, Spotify, streaming services, concerts, or theater tickets. 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. 

6. Professional development benefits

Replacing employees can be very expensive: Data by Gallup estimates that the cost to replace an employee is typically twice their annual salary. Instead, organizations are increasingly investing in their current workforce through upskilling or reskilling. Upskilling refers to the process of helping employees expand their skills and develop new competencies related to their current position, while reskilling is about providing the training employees need to switch roles and move into new positions within your organization.

Employees are interested in opportunities for continued learning, too. A recent Conference Board survey found that 58% of respondents said they’re more likely to leave an employer if it doesn’t provide education and training to develop new skills, stay up to date on current trends, and advance their careers. 

Contributing to this is the fact that many people began reconsidering what they wanted out of their careers after the pandemic. Employees who made career transitions are more likely to prioritize opportunities for professional development.

Jon Hill, Chairman and CEO of The Energists, an executive search and recruiting firm, explains the importance of professional development opportunities:

“Employees of all ages appreciate when companies support their ongoing education through reimbursement or payment of professional development and skill certification courses, particularly in the tech field or other industries where staying current with the industry trends is crucial to do your job effectively.”

Opportunities for employee development allow your employees to stay ahead on the latest technology and industry trends, giving your organization a valuable competitive edge. Flexibility is key when planning any professional development program because every employee will have unique learning styles, needs, and preferences. 

7. RTO incentives

A recent ResumeBuilder.com survey found that 90% of companies will require employees to return to the office in 2023. Most of these companies are opting for a hybrid model: 40% will require employees to come in four days a week, while 31% will ask employees to return three days a week. 

To create a successful return to work plan, companies need to provide high levels of transparency about company expectations and clearly communicate the positives of being in the office. They also need uniform policies and benefits that incentivize employees to return to the office and stem turnover. ResumeBuilder.com found that 88% of companies are offering incentives such as catered meals (41%), commuter benefits (35%), and raises (34%). 

Companies can use flexible benefits accounts and LSAs to provide stipends that can help employees pay for childcare, food, pet care, commuting, or office equipment. Your employees will have new needs as they return to the office, so any benefit that addresses the inconveniences of returning to the office or that helps them maintain work-life balance will be appreciated. Also consider benefits like a work from home stipend that make their time at home as productive as their time in the office.

6 Flexible Benefits to Consider for a Smooth RTO Transition

8. Access to mental healthcare

In recent years, more employees are looking to their employer to provide some level of mental health benefits — 42% of employees with access to mental health benefits say they’re more likely to stay at their job than if they didn’t have them, according to Mercer’s 2021 Health on Demand report. Many employees are still dealing with stress and burnout from the pandemic and volatile job market, making these benefits increasingly valuable in 2023. 

Matt Lister has seen an increase in mental health coverage among the companies listed on CloudAdvisors:

“In our marketplace, we’ve seen a large trend in mental health benefits. Not only individual solutions, but also the execution of plan design changes that are addressing this large gap in plans.”

William agrees that more employers are filling a gap when it comes to mental health benefits:

“Expanded behavioral and mental health benefits is something we're seeing more of. Many traditional health insurance companies aren’t necessarily super generous when it comes to mental health benefits.”

Companies are doing this by offering subscriptions to virtual therapy platforms, health reimbursement arrangements (HRAs), and flexible LSAs that cover therapy, relationship counseling, app subscriptions, massages, and pretty much anything that positively impacts an employee’s mental health. 

9. Real-time adaptability

Employees today want to work for organizations that truly care about them. This means they look for companies that understand the pressures and struggles they might be facing in their everyday lives. They value working for companies that don’t ignore these realities, but actively support them.

One way to do that is to provide employees with benefits and resources that show you are paying attention to what is going on in the world. In the future, benefits programs that are agile and adaptable will be the bar for success over “set it and forget it” programs that aren’t capable of real-time modifications. 

This year, we saw companies respond to their employees’ needs in real time by adding new spending categories to their LSA or creating new programs altogether. With Benepass, this is easy to do on the fly. For example, some companies allowed employees to use LSA dollars for charitable donations in support of Ukraine. Others created a healthcare travel benefit in response to the overturning of Roe v. Wade. The Community Group even added gas as an eligible expense to their LSA as inflation rose and gas prices skyrocketed. 

Katie Graham, Chief Strategy Officer, says:

“We want to show that we are aware of current issues. It’s easy to call Benepass and ask, ‘Can we make sure that is covered?’” 

10. Salary transparency

Many cities and states enacted pay transparency laws in the past year, with more slated to in 2023. Salary transparency attracts qualified candidates — a study by Indeed found that 75% of respondents said they were more likely to apply for a job if the salary range was listed.

Salary transparency helps employers commit to DEI values, reduces the time to hire, and establishes an open dialogue with employees from the start. Gen Z employees are particularly interested in pay transparency, with 89% saying they’re publicly comfortable discussing pay compared to only 53% of Baby Boomers. 

These pay transparency laws are spurring HR leaders to revisit their compensation and total rewards strategies. Smaller organizations, non-profits, and other groups that can’t always offer the most competitive pay might be concerned about losing out on great candidates.

But benefits are just as important as salary to many employees — a Willis Towers Watson survey showed that 78% of employees said they are more likely to stay with their employer because of their benefit program. A Pew Research Center survey also found that 43% of workers who left a job in 2021 cited poor benefits as a contributing factor.  

HR leaders should view this trend as a unique opportunity to highlight other great things about their organization such as increased flexibility, great company culture, and fantastic perks that can still make their organization an employer of choice. As more pay transparency laws go into effect, we expect to see companies compete for talent through expanded benefits packages that can help offset lower salaries.

Learn more

Are you interested in exploring new benefits in 2023? Request a demo or contact sales@getbenepass.com to learn how we can help you do it.

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Benepass Team

Our team is committed to sharing stories that help People teams do their jobs and empower employees to get the most out of their benefits.