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In 2025, HR Teams and Reward Leaders face a perfect storm of rising costs, shifting employee expectations, and global complexities. More than ever, benefits are a critical lever for your company’s success. In our Global State of Benefits Report 2025, we uncovered some of the key trends that are reshaping the benefits landscape.
Read on to learn how these insights can help you build a benefits package that really sticks the landing in 2025.
Trend 1: Low Employee Engagement
Despite 63% of companies identifying employee engagement as their top priority in 2024, only 9% offered full flexibility in their benefits packages, and only 17% had a global benefits strategy in place. The lack of choice and communication—with only 37% of organisations only engaging employees about benefits annually—has led to low appreciation and usage of benefits.
Disjointed platforms further exacerbate this issue, as 70% of global companies lack a unified solution for benefits management. Employees struggle to find what they really need, reducing the perceived value of their benefits.
Companies can boost engagement by implementing flexible benefits and improving communication. Flexible allowances empower employees to spend on the benefits that matter most to them, while regular touchpoints ensure that they know what benefits are available to them.
But there’s another challenge. Most organisations don’t even have the data they need to make improvements; 62% of companies don’t measure the success of their benefits strategy. Without clear metrics, HR teams are left guessing at what’s working and what’s not, making it harder to optimise benefits for engagement and retention.
Employers should consider implementing a centralised benefits platform to simplify access and improve communication. Companies should also track key engagement metrics like utilisation rates and employee satisfaction to ensure their benefits are making an impact.
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Trend 2: Reprioritising Foundational Benefits
In 2024, organisations reallocated their budgets to prioritise foundational benefits like medical and life insurance. This shift was largely driven by soaring global healthcare costs. Meanwhile, spend on wellbeing benefits dropped by 16 percentage points since 2022, signalling a pivot away from perks to essentials.
But focusing solely on reactive interventions without addressing preventative measures risks perpetuating the cycle of rising costs and declining health outcomes. Companies will want to hold off on completely cutting wellbeing spend, and instead pair foundational benefits with preventative wellness initiatives. Low-cost strategies like workplace wellness programs, ergonomic assessments, and access to digital wellbeing tools can reduce long-term healthcare expenses while boosting employee satisfaction.
With employer healthcare costs increasing by up to 151% in some regions, benefits leaders are under growing pressure to rethink their approach. More organisations are shifting toward hybrid models that combine traditional insurance with preventative care, such as epigenetic testing, mental health support, and lifestyle coaching. Taking a proactive stance on employee health isn’t just a nice-to-have—it’s a necessity.
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Trend 3: Global Complexity Challenges
As global workforces expand, managing benefits across borders has become increasingly challenging. Diverse regulations, cultural expectations, and varying market standards create inconsistencies and inefficiencies. Consequently, 23% of companies delegate full benefits autonomy to regional offices, leading to fragmented strategies that frustrate employees and HR teams alike.
Intelligent, unified platforms are emerging as a solution, allowing organisations to standardise benefits while accommodating local nuances. Companies may want to invest in centralised benefits platforms that streamline global operations and deliver consistent employee experiences. Ensure your strategy balances global consistency with regional flexibility to address diverse workforce needs effectively.
With 54% of companies now managing globally dispersed workforces—a 3% increase from last year—the demand for scalable, centralised solutions is growing. But like we mentioned earlier, only 17% of companies have a defined global benefits strategy, leaving many struggling to create a cohesive employee experience. The companies that will succeed in 2025 are those investing in technology that enables efficiency while maintaining the flexibility needed to support different regional needs.
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Trend 4: The ESG Opportunity
Despite dominating much of the conversation in previous years, Environmental, Social, and Governance (ESG) considerations remain underrepresented in benefits strategies, with only 24% of companies prioritising environmentally conscious offerings. While initiatives like electric vehicle schemes are gaining traction, the broader social aspects of ESG—such as inclusivity and equity—are often overlooked.
But the winds are due to change. Generation Z, which will comprise 27% of the global workforce by 2025, highly value sustainability and inclusivity. Organisations that fail to align their benefits with these principles risk losing talent to competitors who demonstrate stronger commitments. Flexible bank holidays, DEI-focused initiatives, and sustainable benefits can enhance your employer brand and meet the expectations of a values-driven workforce.
Companies that integrate social responsibility into their benefits—whether through inclusive healthcare policies, sustainable investment options, or support for underrepresented groups—will gain a significant competitive edge. Employers should go beyond surface-level ESG efforts and embed these principles into their benefits programs.
The future of benefits: Adapt or fall behind
The data is clear: HR and Reward Leaders who take a proactive, data-driven approach will lead the way in 2025. Flexibility, innovative tech, and ESG-aligned benefits aren’t just trends—they’re the new standard for a competitive, future-proof benefits strategy.
Companies that embrace this shift will build stronger, more engaged workforces, while those that stick to outdated benefits risk losing top talent. The good news? With the right tools and insights, you can take control of your benefits strategy and turn it into a true driver of success.
Want to dive deeper into these trends? Read our Global State of Benefits Report 2025 to see how leading organisations are staying ahead of the curve.