What is an employee perk stipend?

Unlike traditional perk programs that only offer a select number of options, stipends put the choice back in the hands of your employees.

An employee perk stipend is a recurring sum of money given to employees to spend on perks.

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Perk stipends give your team the freedom and flexibility to spend money on perks they actually want. Unlike traditional benefits programs, perks give you the ability to provide products and services that meet the unique needs of everyone on your team. 

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These programs are becoming increasingly popular as they improve both the process of offering perks for businesses and, ultimately, the experience for employees. They remove the need for a painful reimbursement process and put the power to choose in the hands of your employees. 

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Quick Hints:

• A stipend is a dedicated allowance for employees to use on perks.

• Stipends are a more flexible and inclusive option to offer perks that meet the needs of a diverse workforce

• Businesses can allocate a set number of dollars per month towards perk categories.

What are some examples of perk categories?

The most popular categories include: health and wellness, learning & development, family, food, and home office. The great thing about perks is as an employer, you get to choose and define these categories for your organization. 

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These categories are up to any one business to decide, but could align with your company’s values or mission. Alternatively, employees can be given complete freedom over their perks, permitted to purchase whatever they want within their budget.

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What are the advantages of an Employee Perk Stipend?

We’ve come a long way since ping pong, foosball and free beer was enough to satisfy the average workforce. And while these features remain a fun way for certain people to blow off steam, they aren’t for everyone. 

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As work culture evolves and more organizations go remote, businesses need perks that address everyone’s needs. This means access to perks outside of the office and a flexible enough program that each team member can find value from.

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Let’s take a look at five advantages of an employee perk stipend:

1) Stipends are Employee-Driven

Rather than rolling out a standard one-size-fits-all employee perk program, stipends give people the perks they want and need based on their interests, lifestyle and demographic.

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These programs offer a personalized experience, empowering employees to use their perks how they see fit. Not only does this maximize the investment you are putting into perks, but it provides your employees with an optimal return on their budgets. 

2) Perk Stipends Attract Top Talent

With a job market that is candidate driven, attracting and retaining top talent is more challenging than ever. Perk stipends are flexible enough to be tailored to both candidates you are trying to attract and existing team members you want to retain. Customizing your perk stipends to align with company values and culture are a great way to show off the kind of environment your organization is fostering. 

3) Perks Facilitate Employee Engagement

Offering perks like learning and wellness not only allow your team to show up as their best selves but also provide a platform to connect with other employees. Offering your team perk stipends gives employees the opportunity to connect with each other over similar interests and activities, creating more meaningful connections and overall engagement.

4) Perks Are Easy to Manage and Administer

Traditional perk programs require a significant amount of time and energy from people teams, and in some cases becomes a full time job. Perk stipends are easily managed and administered through perk management tools, where the work is already done for you. Your team gets access to the perks they want and you get more time back in your calendar!

5) Stipends Are Fair and Flexible‍

As millennials continue to make up a significant portion of today’s workforce, the varying needs and lifestyles of employees are more complex than ever. Perk stipends allow you to meet the needs of all your team members whether they are working on their health and wellness, supporting a growing family or pursuing further education. Stipends allow you to give everyone access to the perks they want while ensuring resources are fairly distributed amongst employees.

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Key takeaways

• Perk stipends are flexible and inclusive for a diverse workforce

• They put the power to choose in the hands of your employees

• Perks are a scalable, cost effective option for growing teams