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The Transformation of Employee Benefits in Today’s Workforce

In a landscape reshaped by the COVID-19 pandemic, U.S. employers are undergoing a significant evolution in their approach to employee compensation and benefits, as highlighted in the recently released 2025-2026 Compensation, Retirement, and Benefits Trends Report by Ascensus. The report, based on a survey of 594 U.S. employers across various industries, indicates a strategic focus on creating robust total reward systems that cater to the needs of a shifting workforce, particularly Millennials and Gen Z.

Embracing a Balanced Approach

Nick Good, CEO of Ascensus, noted that the post-pandemic environment has prompted employers to move away from reactive measures taken during the crisis. Instead, they are now implementing more sustainable programs that prioritize employee welfare and long-term engagement. This shift includes a notable emphasis on financial readiness and wellness, alongside traditional benefits. Employers who once restricted benefits have started enhancing them, striving to meet modern expectations by offering comprehensive support that includes mental health resources, flexible work arrangements, and assistance with student loans.

Key Findings from the Report

• - Salary Adjustments and Competitive Increases: The report forecasts salary increases for 2026 to range between 3.1% and 3.3%. Approximately 30% of surveyed organizations indicated that they provided midyear salary adjustments to address the dynamic market demands, demonstrating a shift towards proactive salary management.
• - Emphasis on Retirement and Financial Wellness: A striking 98% of employers offer qualified retirement plans, with notable matching contributions. Roughly 77% are either implementing or planning to introduce financial wellness programs, showcasing a strong focus on employees’ long-term financial health.
• - Retention through Executive Benefits: Benefits tailored for executives continue to be pivotal, with a large percentage of key leadership roles participating in nonqualified deferred compensation plans (NQDCs). This illustrates the importance of competitive benefits in retaining top-level talent in an increasingly competitive market.
• - Addressing Rising Health Costs: With health plan costs on the rise, many employers reported considerable increases, prompting a shift in cost-sharing from the employer to employees. The previously established Health Savings Accounts (HSA) are gaining traction as beneficial financial tools for mitigating these costs.

Meeting the Needs of New Generations

The report underscores the impact of Millennials and Gen Z on shaping total rewards strategies. Nearly half of organizations are adopting salary range transparency in job postings, which resonates with the younger workforce’s demand for clarity and fairness in compensation. Moreover, initiatives like financial wellness programs and flexible work options reflect a broader understanding of what modern employees value in their workplaces.

Conclusion: A Strategic Shift Towards Employee-Centric Benefits

As organizations prepare their budgets for the coming years, the insights from the Ascensus report reveal a more thoughtful approach to employee benefits. Employers are prioritizing investments in retirement support, competitive compensation, and expert financial guidance—answers to the challenges faced in today's labor market. This systemic transformation represents a proactive effort to not only attract new talent but to retain and nurture existing employees in a rapidly changing economic landscape.

Ascensus has played a vital role in supporting organizations as they navigate these complex dynamics, earning its position as a leading independent platform for savings plan technology and services across America. Their commitment to providing comprehensive solutions empowers companies to build sustainable employee engagement strategies that keep pace with evolving workforce needs. With over 40 years in the industry, Newport, an Ascensus company, continues to set the standards for excellence in human resource management and employee benefits planning.