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.
