The findings were released last week from the annual Goldman Sachs Ayco 2023 Benefits & Compensation Trends in Corporate America Report, which analyzed the benefits offered at 400 companies where Goldman Sachs Ayco provide corporate-sponsored financial counseling.

US employers are pursuing innovative ways to improve their comprehensive employee benefit plans with additional wellness benefits. It is a bid to attract and retain talent in a tight labor market while helping employees address healthcare and other costs, a new report by Goldman Sachs Ayco Personal Financial Management shows. 

Following open enrollment last year, New York-based Goldman Sachs Ayco analyzed the benefits offered at 400 companies where it provides corporate-sponsored financial counseling. The most common themes that emerged for 2023 were inflation-driven cost control and diverse and equitable benefits for retention and recruiting, the firm said in a statement. These trends build on findings from the 2022 analysis, which showed a focus on expanding mental and financial health benefits; adding a diverse mix of voluntary benefit programs; and expanding family planning and caregiver benefits.

Among Goldman Sachs Ayco’s corporate partners reviewed, 10 per cent said they switched plan carriers to get better rates; 40 per cent absorbed cost increases instead of passing them on to employees; and 5 per cent managed to lower employee insurance premiums despite high inflation.

Additionally, 87 per cent are contributing more than $500 to employee health savings accounts (HSAs) to help ease inflationary burdens, and 22 per cent are switching to matching formulas and/or adding wellness incentives for these contributions, helping to encourage employees to save more, the firm continued.

“The persistence of higher-than-expected inflation has created significant financial challenges for the US workforce,” said Kathy Barber, vice president and head of corporate benefits and compensation at Goldman Sachs Ayco. “Forward-thinking companies want to help their employees navigate these challenges, leading many to enhance the suite of benefits they offer. By actively addressing premiums, and providing additional voluntary benefits focused on helping employees control costs, employers can create positive, real-time, bottom-line impacts. It is a powerful statement that shows companies understand and appreciate their employees,” she continued.

Child and elder care assistance benefits are the top growing programs at Goldman Sachs Ayco’s corporate partners, up 177 per cent in the last three years, with 55 per cent now offering them, the firm said. Pet insurance has surged 120 per cent over three years. Mental health benefits increased from 90 per cent in 2022. “While mental health has been a top benefit offering for many years, it was not talked about all that much,” Barber said. “In the last enrollment season, it was very encouraging to find more companies featuring these benefits in their enrollment guides. It has become a priority as more companies explore how to incorporate mental health initiatives into their corporate cultures. It can also be money well spent: mental health benefits can help improve employee productivity, reduce sick time and decrease health insurance costs,” she added.

Lifestyle Spending Accounts (LSAs), also known as lifestyle benefit programs or wellness spending accounts, are another emerging trend, the firm said. These after-tax accounts allow employers to reimburse employees for defined types of expenses while giving employees flexibility to leverage support for the benefits and expenses most important to them. “Innovative, enlightened companies want to show employees they support them in all aspects of their lives, from personal mental health to caring for multiple family generations,” Barber said. “Every employee will not use these benefits, but they can be a great help to those who do and provide a welcome sense of security to others by just knowing they are available if needed,” she added.

A growing number of companies are also offering paid time off to care for family members, recognizing that employees may face life obligations that take them away from work. The most common parental leave period is 12 weeks, with care for other family members commonly paid for six weeks. The survey also found that 15 per cent of companies offer employee sabbaticals, about half in the tech sector, the most common length being four weeks.

The Goldman Sachs Ayco 2023 Benefits & Compensation Trends in Corporate America Report is based on a May 2023 analysis of compensation and benefit offerings at 400 US companies where Goldman Sachs Ayco Personal Financial Management, a national wealth management firm, provides corporate-sponsored financial counseling.