Why Workplace Stipends Are the Future of Employee Benefits

For years, perks defined workplace culture. Free lunches, gym discounts, and ping-pong tables were meant to keep employees happy and engaged. In 2025, those tactics have lost their power. Today’s workforce isn’t looking for perks—they’re looking for choice, flexibility, and equity.

Enter workplace stipends, also known in some organizations as fringe benefits, Lifestyle Spending Accounts (LSA), or employee reimbursement programs. Unlike one-size-fits-all perks, stipends give employers a flexible framework while giving employees the freedom to direct funds toward what matters most—from mental health tools to caregiving support to professional development or career growth.

As organizations stretch to balance benefits, culture, and compensation, stipends are proving to be a resilience strategy. In 2024, Pew found only 30% of workers are satisfied with their pay; among those dissatisfied, most point to pay that hasn’t kept pace with inflation, work demands, or failure to cover basic expenses.

Benefits define much of the employee experience, and workplace stipends, especially when paired with LSAs, deliver the flexibility today’s workforce demands. In the article, we’ll explore why traditional perks no longer resonate, how stipends provide strategic value, what leaders need to know about designing effective programs, and what the future of personal benefits looks like. 

Here’s what we’ll cover:

• Flexibility under pressure: the leadership challenge
• Why stipends work for employees & employers: the strategic value 
• Why it matters to decision makers and leaders
• Designing personal benefit and stipend programs that deliver results
• Looking ahead to a personal benefit renaissance

 

Flexibility under pressure: The leadership challenge

Today’s leaders face a complex benefits equation, and finding the right balance between budget and benefits can be difficult. Especially now, where costs are increasing for employers and employees, and their pay remains. Now, companies must cope with:  

• Rising healthcare costs (projected ~6% increase in 2025) pressure budgets
• Employee stress is at record levels, with nearly three quarters of U.S. workers reporting financial stress 
• Global workforce diversity means benefits must resonate across geographies, generations, and life stages
• Retention risk is high, as employees expect personalization in their workplace experience

Traditional one-size-fits-all benefits don’t solve these challenges, and workplace stipends offer a strategic, cost-effective alternative that reduces turnover. They’re scalable, flexible, and data-driven.

Why stipends work for employees & employers: the strategic value

Stipends thrive on their flexibility, cost control, and data-driven inclusivity. They create opportunities for employees to tailor their benefits experience while employers see greater engagement. 

• Cost control without limiting impact

Instead of unpredictable claims or underused perks, personal benefits and stipends allow HR teams to define annual or periodic funding levels (e.g., $650 per employee per year). Employers set the budget, while employees maximize perceived value by choosing what matters most to them. 

• Flexibility that scales globally

Lifestyle benefits can be structured to support employees across regions, adjusting for local regulations while maintaining a consistent global framework. This solves a challenge for multinationals: equity in benefits delivery. Especially when crafted with a powerful benefits partner, global employees can have unique, local experiences, no matter where they are. 

• Data and insights for smarter decisions

Lifestyle Spending Account platforms provide usage analytics that tell a story about what employees actually value—whether it’s mental health tools, caregiving, education, or family-support. These insights inform a broader workforce strategy that prioritizes self-care and career advancement. 

• Inclusivity at the core

With LSAs, or stipends, inclusivity isn’t an afterthought. Employees choose benefits aligned with their life stages and identities—whether that’s fertility treatment, perimenopause care, student loan repayment, pet insurance, or caregiving support. 

Why it matters to decision makers and leaders

Workplace stipends are more than levers for employee happiness. They impact: 

• Retention and Recruitment: Employees are more likely to stay where benefits reflect their real needs, reducing intensive turnover costs that can sometimes exceed 200% of an employee’s salary
• Employer Brand: Stipends signal adaptability and forward-thinking leadership, adapting to suit a diverse and globally dispersed workforce
• Productivity and Engagement: Employees who feel supported in their lives outside of work bring more energy inside of work
• Predictable Financial Planning: Unlike open-ended healthcare claims, stipends are capped, forecastable, and easier to design

The future of personal benefits isn’t about what employees want next. It’s about empowering them to decide for themselves. Workplace stipends, powered by flexible LSAs, deliver that empowerment while giving leaders control, data-driven insights, and scalability.

Designing personal benefits and stipend programs that deliver results

For decision-makers driving benefit strategy, three design principles stand out: 

1. Start with strategy, not perks. Define what outcomes you want: retention, cost control, culture, or global equity.
2. Balance freedom with guardrails. Flexible categories that grow with your people (professional development, commuting, financial wellbeing) paired with clear rules protect budgets and simplify administration.
3. Communicate relentlessly. Employees only value benefits they use. Make engagement simple, transparent, and intuitive. 

Looking ahead to a personal benefit renaissance

Personal benefits are not experimental—they’re a growing standard. In 2024, median LSA funding per employee was $750. In 2025, it dropped slightly to $650, and engagement remained above 80%. The message is clear: employees want choice, even more than size of spend. 

For company administrators, this is a turning point. Stipends aren’t just a cost center—they’re a calculated investment in workforce agility, culture, and resilience.

The future of personal benefits isn’t about what employees want next. It’s about empowering them to decide for themselves. Workplace stipends, powered by flexible LSAs, deliver that empowerment while giving leaders control, data-driven insights, and scalability. 

Why are stipends the future? Because in the modern workplace, flexibility isn’t a perk, it’s a strategy.  And that strategy revolves around creating the most streamlined, engaging employee experience. Find out more about modern workplace trends that have been shaping the benefit trends of 2025.