Recalibrating employee benefits: How companies are delivering value in a cost-constrained world

As employers head further into 2025, one message is clear: the old rules of employee benefits are fundamentally changing. With rising costs, economic instability, and employees demanding more support and personalization, organizations must transform how they think about benefits. Yet, this isn't a story of increased budgets and ever-increasing programs. Instead, it's a story of smarter spending, sharper focus and using benefits as a strategic tool to drive engagement, retention and purpose.

This article explores seven key trends and strategies that employers need to know now—insights drawn from the 2025 Benefits Trends Survey. While this summary highlights the most urgent shifts, the full research report offers a deeper dive into the data and practical actions, to guide your next steps.

1. 01

   Cost concerns escalate – manage budgets strategically

Our 2025 Benefits Trends Survey reveals a pressing concern among employers: the escalating costs of employee benefits has surged to the forefront of issues facing benefits leaders (Figure 1). With a weakening economy, the financial pressures on benefits budgets have also intensified and increased in importance. Together, over two-thirds of employers now identify cost pressures as a central factor shaping their benefits strategy.

How can employers get costs under control? It doesn't necessarily mean cutting benefits, but it does mean managing them smarter. Employers should build a two-part strategy. First, improve vendor relationships: renegotiate contracts, use preferred provider networks explore new pricing models, push for transparency and seek partners that deliver measurable outcomes. Second, tackle the most expensive health conditions through targeted programs that prevent avoidable claims and improve health outcomes. Mental health, cardiovascular issues and cancer are areas of particular focus. These actions can reduce spend while improving employee support – a true win-win.

1. 02

   Talent still matters – elevate benefits to attract and retain

With labor market conditions stabilizing in some regions, concerns on talent have moderated. However, demographic shifts over the longer term (aging populations and shrinking talent pools) and labor shortages in key skill segments mean talent challenges remain a key influence for benefit strategies.

Employers are responding by looking to make benefits more employee centric. Increasingly, organizations are designing benefits with a sharper focus on attraction, retention and employee wellbeing. At the same time, leading employers are increasingly using benefits to reflect their company's purpose and values—rising from 30% today to 41% in three years.

This signals a fundamental shift. Rather than matching the market, benefits are becoming a core part of how companies differentiate themselves. Employers should articulate a clear value proposition through benefits. Supporting their employees' specific needs, reflecting the organization's broader values and how they connect emotionally with employees, via enhanced support, employee engagement and smart communication.

1. 03

   The (re)balancing act – doing more with the same

Employers aspire to present a clear and compelling value proposition for benefits, but simultaneously manage costs within their existing budgets. How can companies reconcile these objectives?

A significant shift is anticipated (Figure 2). In the next three years, over half (57%) employers plan to reallocate or rebalance their benefit spend, adding or enhancing some benefits while reducing or removing others.

This recalibration requires careful consideration of employee needs and the value each benefit brings to the organization. Employers should decide how they want to optimize existing resources to support wider benefits ambitions. They need to decide which benefits to prioritize, how to create an enhanced employee benefits experience and how to improve benefits administration and operations. Effective communication strategies will be crucial to managing employee reactions to these changes.

1. 04

   Focus on the benefits that matter most

Against a backdrop of cost control and recalibrating benefit spend, employers are looking to……..

Contact

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Jean Baptiste Kullmann

Commercial Director, Health and Benefits, France

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Eva Liu

Head of Strategic Development, Health & Benefits, Asia Pacific

LinkedIn

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Alexandra Lyner

Health and Benefits, Great Britain and Western Europe

email Email phone +41 44 804 20 72

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Jeremy Povey

Senior Consultant, Health & Benefits, CEEMEA

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Raul Puchuri

Health and Benefits, Latin America

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Courtney Stubblefield, ASA MAAA

Health and Benefits, North America

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