What do snowboarding, therapy, and a carpentry class have in common? They’re all ways an employee can improve their well-being outside of work. They’re also all things that can be covered by a wellness spending account.
At Unito, all employees enjoy this benefit, no matter their role or seniority within the company. We encourage them to spend it on things that make them feel happier, smarter, and healthier.
Here’s how a wellness spending account works, and why you might want to implement it in your business.
What is a wellness spending account?
The wellness spending account — or WSA — is an amount of money we make available for employees to spend on their well-being. It’s divided into four equal chunks that are paid out three months apart (in January, April, July, and October).
We all know work can be stressful. Add in a pandemic and work-life balance can be especially tough. With this in place, people can feel empowered to make positive changes in their lives, or just enjoy a hobby they haven’t been able to make space for before.
How does a wellness spending account work?
We trust that our employees are going to use their wellness budget appropriately, so we provide the funds in regular increments, once per quarter. We then ask that they log their expenses in a spreadsheet. This is both to get a sense of what activities contribute to wellness but also to make sure people are using the funds. If someone isn’t spending their wellness budget, we encourage them to do so. Employees who are happy and value their personal wellness make a positive impact on the business as a whole.
We encourage people to share pictures of what they used their WSA on, if they’re comfortable with it, of course. Seeing a coworker with the new snowboard their wellness spending account paid for reinforces the importance of this benefit.
What can it be spent on?
We’re flexible on what people can spend their wellness fund on. This is crucial for something like this to work. If you’re too rigid on what your employees can use the money for, you are essentially telling people what should be making them happy. Your focus should be on enabling them to pursue their own wellness, in whatever form that takes. So while this benefit can seem pretty broad, here are some general categories:
- Sports and fitness: This can include gym memberships, sports gear, or fitness classes. We’ve had people use their WSA to join climbing gyms and buy a snowboard, for instance.
- Health: Health insurance plans aren’t created equal, and it isn’t always possible to cover everyone’s particular health needs. Some of our employees bolster the health plan’s massage coverage using their WSA, for example.
- Educational and personal development: It’s important to mention that purchases in this category do not have to be exclusively related to someone’s role. If a software developer wants to use their WSA to take a carpentry class, they’re absolutely free to do so.
These categories can generally cover — and justify — just about any wellness expense across the many interests of our employees.
Why implement a wellness spending account?
Happy employees are more productive. Show them that you care, and they’re less likely to get sick or skip work. Bottom line, the cost of this expense is just worth it compared to the benefit it brings to the people at the company. Here are more reasons why implementing a wellness spending account is in your company’s best interest:
Employees love it
It’s basically free money to improve your well-being. Because we’re committed to being flexible on how the money is spent, employees don’t feel like they’re pressured into spending on rigid “pre-approved” outlets.
It’s a great perk for recruitment
If you want the best talent, you need to be competitive. That doesn’t stop at salaries and vacation time. Wellness spending accounts show potential hires that the company has their best interests in mind — without necessarily defining what that means for them. If you have pictures of your employees reaping the rewards of this benefit, you can even build a sort of “pitch deck” for your WSA.
It can cover holes in group health insurance plans
We have a rigorous group health insurance plan, but it doesn’t necessarily cover everyone’s specific health needs. With a WSA, you can give people the ability to afford health services that are important to them, even if they’re not usually a part of your company’s health insurance plan. Because we don’t ask our employees for extensive details on their spending — or invoices — they can feel comfortable spending money on what they need without having to tell us what services they’re using.
It’s one of the best ways to show your employees you care about their well-being
That said, not all well-being initiatives are created equal. Physical workplace perks, like nap rooms and foosball tables, can help, but they’re not necessarily a perk for everyone. With a wellness spending account, you give your employees the ability to choose perks that work for them — and that reflects well on you.
A few things to keep in mind
Excited to implement a wellness spending account at your organization? Here are a few things to keep in mind before doing so:
- The WSA is a taxable benefit: This will depend on your tax jurisdiction, of course, but generally a WSA is considered as extra pay. Because of that, it will be taxed differently depending on your employees’ income. Make sure your employees are aware of this when you tell them the amount of their WSA.
- Trust your employees: We take a very hands-off approach to the WSA. We’re not interested in policing our employees and their decisions. That, and requesting extraneous details — or invoices — would mean a ton of paperwork that would give a sour aftertaste to something that’s meant to be a benefit. Tell your employees that you trust them to use their judgment, and then actually do that.
- Communicate what happens to outstanding amounts: Your employees won’t always completely spend their wellness fund. Maybe there’s a discount on their usual class, or their wellness needs are a bit lower than usual. Whatever the reason, they shouldn’t feel pressured to spend every single dollar, and you should know what to do with any unspent amount. Maybe it carries over to the next period, or it gets funneled to some collective spending — like the aforementioned nap room. At Unito, we give any unspent wellness amount to charities. Some of our employees even choose to outright give theirs to charity instead of spending it.
Pro tip: Adopting transparency as a default
Employee benefits like the wellness program work best when both sides trust each other. One way to guarantee this trust is by keeping things transparent. Be transparent about how the program works, how much money is available, and what employees can spend it on. By that token, you can expect similar transparency from them as well.
Get well soon
Employee wellness is a two-way street. You need to trust your employees are doing the best they can, but you also need to give them the ability to do so. There’s great value in enabling your employees in pursuing wellness outside of work, and a WSA is a great way to tap into it.
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