Global State of Employee Benefits Report 2025: A Benefits Consultant's Take

Ben’s recent Global State of Benefits Report 2025 highlights some key trends reshaping the employee benefits landscape. As an employee benefit consultant, two trends in particular stood out:

1. Wellbeing benefit spend is in decline amid rising costs
2. Employee engagement with benefits remains a challenge

So I wanted to share my thoughts on what these trends mean, their root cause, and offer some thoughts on how employers can best overcome any wider issues these trends point to.

1. Wellbeing benefit spend is in decline amid rising costs

The report highlights that foundational insurance costs (e.g. life insurance and PMI) have surged. PMI alone is up 105% since 2024, forcing businesses to rethink benefits budgets. As a result, spend on wellbeing benefits - such as wellness apps – has dropped 10%.

While on the face of it, prioritising core healthcare benefits makes sense given NHS challenges, considering the longer-term impact of cutting preventative wellbeing initiatives is key to a sustainable benefits strategy.

Here are some of the wider elements we’d encourage clients to think about when it comes to health and wellbeing benefits:

• Preventative care initiatives can save you money in the long-term. Routine health screenings, mental health support, and lifestyle coaching can all help reduce or prevent illness-related absences. While Return On Investment (ROI) can be tricky to measure, employee surveys, usage and absence data can provide tangible evidence.
• Consider digital health solutions: While not a replacement for human-based care; implementing digital solutions  - such as telemedicine, AI-driven diagnostics, and virtual health consultations - can be an affordable initial ‘triage’ step before additional costly in-person visits are set up. 
• Explore levels of cover: reducing the levels of cover you offer on core benefits can provide budget for other wellbeing benefits. As an example, could you reduce your life cover to 3 x salary. Also, check if your standalone Employee Assistance Programme (EAP) is already offered as part of another benefit such as Group Income Protection.
• Consider flexible or voluntary benefits: Not all benefits need to be 100% employer-paid. Giving employees choice - from caregiver insurance to electric cars and retirement planning - allows them to tailor benefits to their needs.
• Negotiate better provider partnerships: Collaborating with healthcare providers and insurers to secure value-based care agreements and cost-sharing solutions can improve access to high-quality, cost-effective care.
• Explore your company culture: Stress is inevitable, but a supportive environment matters. Ensuring flexible working policies are visible, and giving line managers autonomy to make case-by case decisions for their team members can make a big difference.

2. Employee engagement with benefits remains a challenge

The report shows that a huge 73% of employees have either an average or low appreciation of their benefits offering, which is very concerning until you see the supporting data:

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• only 17% have a benefits strategy 
• 49% don’t offer flexibility or choice
• 62% don’t use data to measure their benefits
• 37% communicate their benefits just once a year

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Here’s my take on that supporting data:

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A benefits strategy really does make a difference: Without a clear strategy, benefits become a scattered mix of perks with no real purpose. A strategy – underpinned by data, benchmarking, your company objectives and your budget – ensures that your benefits form part of a much bigger picture that supports both your business and your workforce.

Flexibility is your friend (your benefits strategy will help with this!): Your employees are all different, so why would they all value exactly the same benefits? Ten years ago, companies were limited to a handful of options, but today’s explosion of benefits mean that savvy employers can use them to differentiate themselves in the market.

Data is key: How do you know whether employees value their benefits if you’re not measuring the data? Track usage rates, use engagement surveys, productivity trends, and exit interviews to measure impact and continuously review your offering.

Comms aren’t a once and done: Employees forget what’s available, just like car insurance details fade over time. Use clear, engaging, and multi-channel communication during onboarding and throughout the employee’s career. If you can, segment your messaging based on life-stages and demographics and gather feedback to gauge employee understanding and satisfaction.

Conclusion

The employee benefits landscape in 2025 presents both challenges and opportunities. By proactively addressing rising healthcare costs and enhancing communication strategies, businesses can develop benefits programmes that align with their business goals, and support and engage their people.

For more information on how ilumiti can support you on this journey, please visit our website: Comprehensive Employee Benefits Solutions — ilumiti

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Please Note: The Financial Conduct Authority does not regulate some forms of employee benefits.

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