Goldman Sachs on the must-have benefits in 2023

Caregiving and pet insurance top Goldman's list of must-have benefits in 2023

August 11, 2023 2:21 PM

A golden retriever laying down, flanked by two cats.

With open enrollment season on the horizon for many employers, there's no better time to reflect on this year's benefits offerings and ask, is your company staying competitive or has it fallen behind?

Goldman Sachs Ayco, a wealth management firm for employers, released its 2023 Benefits and Compensation Trends in Corporate America Report, noting what benefits have emerged as must-haves in the last three years among their own clients.

"Our team is responsible for working with 400-plus corporate partners that come to us for our financial counseling programs and benefits," says Kathy Barber, vice president and head of corporate benefits and compensations at Goldman Sachs Ayco. "We work with companies to understand all of their plans and features and make sure that employees are maximizing the benefits offered by their companies."

While Barber admits that her team already saw certain benefit trends at play just from talking to their clients, even more was revealed when surveying 400 companies and seeing the full story in numbers. Here are five benefit trends employers should take note of before the year is up.

Employers are trying to cover healthcare costs

According to Goldman Sachs Ayco, nearly 40% of their clients absorbed increases in health plan premiums, while 55% increased premiums and just under 5% lowered premiums. Given that global advisory Willis Towers Watson predicted rates to increase by 6.4% in 2023, it's not surprising that a majority of employers either didn't choose or couldn't financially take the full loss. Still, Barber points out that almost half of companies did try. In fact, 10% of their clients switched to different carriers in hopes of finding better rates.

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"With the inflation components coming into last year, many employers went out of their way to recognize that it was a tough year for employees," says Barber. "So they looked for ways to minimize additional [costs]."

Mental health support is a table-stakes benefit

Goldman also found that 95% of their clients offer mental health benefits in the form of employee assistance programs, and most recently, apps and telehealth options. Before the pandemic, Barber notes that many companies already had EAPs but the last three years have pushed companies to better advertise and bolster the offering. But many companies know they have to go further, says Barber.

"We see companies now adding additional services beyond EAPs that offer more on-demand services," she says. "Rather than waiting for an appointment, you can have more immediate assistance through an app."

Caregiving benefits are here to stay

The inclusion of caregiving benefits, whether it's child care or elder care assistance, has increased by 177% in the last three years, according to Goldman. Over half of their clients either help their employees find reliable caregivers or subsidize the cost of care.

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"The pandemic shone a light on an issue that existed long before it," says Barber. "Now companies are looking for ways to alleviate stress and anxiety and still allow employees to maintain their work schedules."

Pet insurance is in demand

Similar to caregiving benefits, the presence of pet insurance benefits has surged by 120% in the last three years. During job interviews, Baber noticed that she gets more questions about whether they provide pet insurance than any questions regarding employee medical insurance.

"It speaks volumes to what people value in today's world," she says. "Employees expect to receive certain benefits, but pet insurance is a value add. Many people have pets and the prevalence of pets grew over the pandemic, so a discounted rate on pet insurance is a huge cost-savings opportunity for employees."

Lifestyle spending accounts may be the next big thing

While less than 5% of respondents include a lifestyle spending account, or LSA, Barber is confident the prevalence of this benefit will only grow from here. LSAs are accounts exclusively funded by employers for a variety of employee personal needs. For example, one of Goldman's clients offers $800 for employees to use on over 50 different expenses, including gym memberships, student loan repayments and caregiving help.

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"Companies are trying to provide a suite of voluntary benefits that meet the needs of a very diverse workforce," says Barber. "But it's challenging and costly to manage all those vendors. LSAs can shift those costs and provide a direct contribution to employees."