As competition for talent and skills persists, many employers are looking at new ways to enhance their employee value propositions, including through benefits flexibility, according to a new report.

For its 2025 Benefits and Compensation Trends report, Goldman Sachs Ayco surveyed 400 employers to whom the company provides financial counseling. It found respondents are largely focused on retirement benefits changes, rising healthcare costs and how voluntary and ancillary benefits can meet diverse employee needs.

According to Jonathan Barber, head of Compensation & Benefits Policy Research at Goldman Sachs Ayco, these trends highlight that benefits flexibility is becoming increasingly critical.

“Companies have begun to realize that employees have diverse needs, so they have started looking for opportunities to create flexibility to meet those emerging needs,” he explains. “Benefit flexibility is now being recognized as key toward attracting and retaining employees.”

What does benefits flexibility look like?

Among the key Goldman Sachs Ayco survey findings:

• GLP-1 weight loss drug coverage is expanding: 34% of employers now cover GLP-1s (e.g., Ozempic) for weight loss, often requiring enrollment in related wellness programs.
• Lifetime income enters the 401(k) mainstream: 10% of companies now offer a lifetime income or annuity option within their plan.
• Voluntary benefits go beyond the basics: Adoption of offerings like group legal (74%), accident insurance (72%), critical illness (71%), ID theft protection (64%) and pet insurance (63%) continues to grow.

As benefits offerings diversify, the potential of flexibility is also being seen in paid time off trends. For example, some employers are rolling out a PTO conversion policy: allowing unused PTO to be converted into several options, including 401(k)/Healthcare Savings Account contributions, student loan payments, charitable donations, 529 plans or cash.

Maegan Wells, Goldman Sachs Ayco vice president, Compensation & Benefit Solutions, explains that this trend popped up on the firm’s radar during the COVID-19 pandemic, when employees were not using much PTO.

“Some companies started allowing for employees to donate their PTO to co-workers who were dealing with prolonged illness or caring for family members,” she explains. “From there, we started to see companies get more creative with these conversion policies by opening them up to address the needs of their diverse workforce.”

The future of the PTO conversion policy

As employers lean into benefits flexibility, there are important considerations they must weigh before implementing offerings like a PTO conversion policy, Wells says.

For instance, policies should be structured in a way that prevents employees from risking burnout in order to save money.

“We are typically seeing the conversion of PTO being limited to 40 hours or five days per year,” she says. “The other guideline we are seeing being built into these policies is that companies are only allowing PTO that has been carried over into the following year to be converted.”

For example, if an employee had four unused days of PTO at year-end, the employee would have the option of converting the value of those four days into a contribution to a 529 plan. She says this ensures that employees are still using their days as needed throughout the year, but that leftover days wouldn’t be wasted.

Goldman Sachs Ayco’s Barber says that, besides employers limiting how much PTO can be converted, state and municipality laws must be considered. Such laws may limit whether PTO can even be converted, how much and the types of leave that can be converted.

They are considerations that may be facing more employers in the future, as many employees continue to leave unused PTO on the table, Barber says. The most common reasons are having remote/hybrid work arrangements, that they’re “too busy” or “can’t afford a vacation.”

“Altogether,” he says, “it is the ‘perfect storm’ (for a PTO conversion policy).”

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