HONG KONG, June 10, 2025 – As companies in Asia Pacific (APAC), including Hong Kong, grapple with heightened economic uncertainty and greater financial pressures on budgets, steering the right course on employees benefit strategy is more challenging than ever. This is according to a survey by WTW (NASDAQ: WTW), a leading global advisory, broking and solutions company. As a result, employers are turning to smarter spending, sharper focus and using employee benefits as a strategic tool to drive engagement, retention and purpose for their workforce.
The 2025 Benefits Trends Survey found rising benefit costs to be the top issue (81%) influencing Hong Kong employers’ benefit strategies in 2025, up from 64% in 2023. Competition for talent (65%) continues to be one of the top concerns, other than the financial pressure on budgets (56%) and expectations for an enhanced employee experience (38%).
“With rising costs and economic instability, companies are taking a step back and looking to focus on what drives real value for employees and their business,” says Eric Lam, Head of Health & Benefits, Hong Kong and Macau, WTW. “Budget constraints, talent issues and the uncertainty on potential impact of tariffs show no signs of easing soon. Employers are evaluating how to mitigate these challenges through their existing employees benefit programmes.”
As the cost of medical care continues to show significant growth in Hong Kong with a projected increase by 9.8% this year, employers face greater challenges in delivering their strategy in key areas such as health benefits (63%) and wellbeing programmes (29%).
To address these concerns, employers are shifting their strategy. Few are expanding their benefit portfolio, choosing to instead focus on extracting value from their current offerings and improve financing, employee experience, analytics and administration.
In the next three years, 58% of employers plan to reallocate or rebalance spend. To tackle the high costs, a majority (61%) plan to enhance value or switch to better-value vendors across health, retirement and risk benefits. Only a quarter (25%) plan to tackle high-cost medical conditions and 27% plan to adopt a network of preferred medical providers.
Eager to address employee pressure points, companies are also looking to improve the following priority areas over the next three years: maximizing value, health and inclusive benefits. Many plan to increase their use of communication and use nudges and navigation solutions to influence behaviors and enhance the employee experience. Regularly reviewing vendor performance, including employee feedback, is also a key action employers are taking.
“Its not about increased budgets and ever-increasing programmes. Instead, it’s focusing on smarter spending and finding innovative solutions for old and new challenges.”
Eric Lam | Head of Health & Energy, Hong Kong & Macau, WTW
“Organisations are facing more pressure than ever to deliver the right benefits strategy. Its not about increased budgets and ever-increasing programmes. Instead, it’s focusing on smarter spending and finding innovative solutions for old and new challenges. These can include reshaping benefits or even targeting support and spending on the benefits that matters most, enabling personalisation and helping employees make better decision.
“There is still a long way to go to address these pressure points but helping employees to make the best of their benefits through greater choice and support are what matters most to them. This can significantly enhance employee experience and give companies an edge in the competition for talent,” adds Eric.
The 2025 Benefit Trends Survey examines the future direction of an organisation’s benefit strategy, how innovative solutions are being used for old and new challenges, and how employers are reshaping their benefits in a cost-constrained environment. The survey was conducted from early March to mid-April this year with responses from a total of 5,538 employers across 105 markets. Amongst which, 1,994 employers are based in APAC, including 104 from Hong Kong, representing a broad range of industries in both the private and public sectors.
At WTW (NASDAQ: WTW), we provide data-driven, insight-led solutions in the areas of people, risk and capital. Leveraging the global view and local expertise of our colleagues serving 140 countries and markets, we help organizations sharpen their strategy, enhance organizational resilience, motivate their workforce and maximize performance.
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