SINGAPORE, July 24, 2025 – As companies in Asia Pacific (APAC), grapple with heightened economic instability and greater financial pressures on budgets, steering the right course on employees benefit strategy is more challenging than ever. The latest findings from its 2025 Benefits Trends Survey by WTW (NASDAQ: WTW), a leading global advisory, broking and solutions company, reveals a region-wide shift on how employers in APAC are approaching employee benefits amid rising costs, talent shortages and evolving employee expectations.
“With rising budgetary pressures and employee benefit costs, particularly around healthcare, costs issues have intensified, impacting employers’ ability to enhance and deliver on their employee benefits.”
Royston Tan | Head of Health & Benefits, Asia Pacific, WTW
“With rising budgetary pressures and employee benefit costs, particularly around healthcare, costs issues have intensified, impacting employers’ ability to enhance and deliver on their employee benefits,” said Royston Tan, Head of Health & Benefits, Asia Pacific, at WTW. “At the same time, competition for talent remains the biggest issue facing employers in APAC and that has been a top concern since 2021. Structural gap in the labour market especially for specialised skills, demographic shifts and workforce preferences are also contributing factors to this challenge faced by employers.”
With talent issues persisting, employers plan to use benefits as a tool to signal their organisational purpose and values as they work to attract and retain talent. The Survey, which gathered insights from close to 2,000 employers across 20 markets in the region, highlights a growing emphasis on smarter spending, enhanced employee experience and targeted wellbeing support.
Other key business issues and benefits priorities faced by employers in rebalancing their strategies include the following:
Markets, such as Hong Kong, Japan, Singapore and Taiwan, continue to face huge talent competition, partly explained through the slow population growth, particularly with aging populations and low fertility rates. Furthermore, employers in APAC are faced with one of the highest medical inflations globally, with a projected increase of 12.3% in 2025.
The survey shows that health benefits and wellbeing are areas where employers face the greatest challenges in implementing their benefit strategy.
Over the next three years, more than half of the employers (52%) see mental health as the top area which they wish to enhance and improve. Health benefits (50%) and financial wellbeing (28%) also rank highly, reinforcing the importance of core benefits and wellbeing support as benefits priorities for employers.
To manage the high-cost environment, half of the employers (51%) are looking to enhance the value they get from vendors of healthcare benefits. A third (38%) plan to adopt targeted programmes to better manage high-cost conditions. Among these employers, over 80% plan to increase the use of targeted programmes to address high-cost conditions such as mental health, women’s health, cardiovascular disease and cancer in the next three years.
Over the next three years, close to two-thirds (61%) of employers are looking to reallocate or rebalance their benefits spending to get more value from current investments. This recalibration involves enhancing some benefits while reducing or removing others, require careful consideration of employee needs and the value each benefit brings to the organisations.
“Employers in APAC markets face diverging priorities. They will need to recalibrate, doing less of what does not work and more of what does. Companies need to invest in employee needs with greater precision, improving experience and choice, and using benefits to communicate who they are and what they stand for,” added Royston.
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 from 20 markets in APAC, 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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