Global findings from the WTW Benefits Trends Survey, 2025
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.
Findings from the 2025 Benefits Trends Survey offer a clear direction. While cost is now the top concern, employers aren't backing away from their benefit ambitions. They are recalibrating – doing less of what doesn't work and more of what does. They are investing in employee needs with greater precision, improving experience and choice, modernizing administration and using benefits to communicate who they are and what they stand for.
Here's seven things employers need to know – and do – now.
01
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.
02
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.
03
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.
04
Against a backdrop of cost control and recalibrating benefit spend, employers are looking to become more targeted in how they support employees, focusing on the issues that matter most (Figure 3). Mental health tops the list, with the growing impact of mental health challenges on engagement, absenteeism and health claims making this a business-critical issue.
Companies are also prioritizing delivering better value from existing programs, by helping employees navigate and use benefits more effectively. Communication is key: employees need to know what's available, how to use it and why it matters. And as cost-of-living issues remain, supporting financial resilience is becoming more central to how employers define benefits.
To focus on what matters most, employers should assess their benefits for impact. Expanding programs that directly alleviate employee pressure points, while trimming back low-value benefits. Listening strategies and analytics are key to both prioritization and messaging.
05
The demand for personalized benefits is growing rapidly. Employees no longer want a single benefit package – they want the flexibility to reflect their own personal circumstances and benefits to be as individual as their needs. Employers are responding: 38% globally offer moderate or high benefit choice today, but that figure is expected to double to 76% within three years.
Employers are looking to redesign their benefits to allow meaningful choice. This could include providing voluntary benefits or allowing optional enhancements to current benefits to full flexible benefit allowances. For leading employers, we see choice alone isn't enough. Decision support, digital navigation tools and enhanced education all play a crucial role in accompanying personalization, to ensure workers get the best value from the choice on offer.
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