Expert view: Flexible, digital-first benefits that work across a diverse workforce will build resilience
We live in times of change. There is a real sense of uncertainty and transition with the increase in global tensions, a changing of the guard for UK politics, the shifting US political landscape, and the economic fallout from the Covid-19 pandemic. And there are also significant changes happening in the world of work and employee benefits. It will therefore be those organisations best equipped to navigate this transition who stand the greatest chance to emerge with their businesses intact and healthy.
The principal way to navigate these changes is to understand the trends that both underlie this transition in a macro sense and by way of more local, immediate factors.
This research report identifies the key priorities for employers that want to remain competitive and responsive to employees’ needs.
Digital tools
Digital transformation is the foremost trend, affecting both business and benefits strategies. Increasingly, organisations are using digital tools to manage benefits, track pay-gaps and optimise workforce roles. Automation and AI are reshaping job structures, creating demand for digital skills, and driving shifts in benefits management.
Another prominent trend is demographic shifts in the workforce. An ageing population and growing diversity in the workforce necessitate more personalised benefits. This report notes an increase in flexible working arrangements to support caregivers, older workers and individuals with chronic illnesses.
At the same time, employers are prioritising strategies to attract younger talent, whose retention rates have declined owing to unmet expectations around career growth and pay, accompanied by a noteworthy uptick in reported mental health issues among members of Generation Z. With mental health emerging as a top priority in general, employers are emphasising preventative health measures to reduce long-term healthcare costs.
Regulatory changes
To complicate matters, the incoming Employment Rights Bill introduces several legislative reforms aimed at enhancing employee rights. Provisions include a standardised National Minimum Wage, expanded pay-gap reporting, flexible working as a default option, and new protections for unpaid caregivers. Although nearly half of employers believe these changes might not significantly disrupt their benefits strategies, larger organisations anticipate challenges related to increased costs, compliance and workforce adjustments.
As organisations rise to these immediate challenges, the report further indicates strong strategic responses to macro trends such as adapting pay strategies to support greater flexibility, skills development and reskilling, enhancing employee value propositions by offering comprehensive benefits, and investment in benefits that promote long-term health.
Conclusion
This report suggests that organisations embracing adaptability in their benefits strategy will be better equipped to handle ongoing changes in the labour market, technology, and regulation. By focusing on flexible, digital-first benefits and addressing the needs of diverse employee groups, employers can build resilience and ensure that their benefits strategies align with both immediate and future workforce expectations.
In partnership with Barnett Waddingham
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