Now is the time to rethink your 2025 benefits strategy
As we approach 2025, we are on the cusp of a major shift in how employees perceive and interact with benefits.
The rapid pace of change in the workplace, combined with evolving employee expectations, means organisations must take bold steps to rethink their benefits strategies.
Now more than ever, HR and reward leaders are focused on ensuring benefits meet the personal, financial and emotional needs of employees.
Employee demand for benefits is undoubtedly driving this trend.
Our research shows that, aside from salary, benefits are the number one priority for employees when looking for a new role.
Here are some tips to prepare for 2025:
1. Experiences over things: Ephemeral consumption
Employees and consumers are increasingly prioritising experiences over material possessions. This trend, which I wrote about last year, continues to gain momentum.
Holidays and travel are on the rise, with the average UK holiday now costing £2,000 per person annually. Tech spending has also surged, but consumer expectations are shifting. People want high-quality experiences, not just more products.
The rise in experiential spending reflects employees’ desire to reward themselves with moments, not just items.
When it comes to employee benefits, this trend signals the importance of offering experience-based rewards.
Employees value benefits that allow them to live more fulfilling lives, whether through travel perks, wellness experiences, or personal development opportunities.
In 2025, benefits leaders must focus on creating emotionally uplifting experiences that connect employees to one another and their organisation.
Indeed, 45% of HR and reward leaders say they want to better align benefits with company values and purpose.
Benefits technology should also offer engaging content, multimedia experiences, social proof – all fast-growing consumer trends that should make their way into employee tech experiences too.
Benefits technology cannot be one way and transactional anymore.
2. Demand for quality tech experiences
Employees are tired of unreliable software and over-promised tech.
For reward and benefits leaders, this means offering a seamless, intuitive and modern experience for employees – and choosing a reward platform that evolves.
Benefits platforms must help employees navigate a growing range of benefits options and deliver personalised, timely suggestions that feel relevant and useful.
Forward-thinking employers are using content within the benefits platform to highlight the various resources, support and benefits available to people – and how they can be used together.
For example, in a sustainability article, companies can share updates on their progress towards net zero, initiatives employees can get involved in, volunteering opportunities, and the voluntary green benefits they offer such as EVs, electric bikes and tree planting.
3. Helping employees become their emotional best
Employees are seeking products and services that enhance their mental and emotional wellbeing.
We will see a shift towards benefits that help employees buffer against the stresses of life; whether that’s health or financial support, employees are becoming increasingly self-sufficient, driven by a desire to take control of their own wellbeing.
Recognising that people want more flexible and personalised benefits, greater choice, and benefits that are more relevant to them and their own personal wellbeing, organisations are increasingly looking to benefits allowances.
The wellbeing use case for card-based allowances is proving particularly popular; 54% of employers already offer a wellbeing-specific allowance with a further 34% planning to implement one in the next 12 months.
4. Savvy and self-sufficient employees
In 2025, I expect consumers to feel more in control than ever before, carefully considering their purchases and making informed decisions.
In the world of benefits, employees are becoming equally discerning, expecting greater choice and carefully weighing up their options.
To meet employees’ evolving needs, employers must continually adapt their strategies and look for new ways to engage their people.
Employees want digital wallets that let them spend as they see fit, or wholly mobile experiences that enable them to research and educate themselves on their options – however and whenever they want.
The case for rebuilding benefits
More than a decade ago, poor communication of benefits schemes in the UK was costing businesses £2.7 billion annually.
Although this issue hasn’t completely gone away, the way organisations approach benefits has changed.
Our 2024 research the shift away from cost-based approaches and towards value-based benefits strategies, as organisations increasingly understand the positive impact benefits can have.
And new studies show that benefits aren't just about retention or wellbeing – they are now central to organisational success.
Employee benefits have become a vital part of a company’s value proposition, driving engagement, productivity, and loyalty. These can be linked to the overall performance of your organisation.
Shaping the future of benefits in 2025
As you prepare your reward strategies for 2025, here are three useful tips:
1. Review and tailor benefits: Assess your current benefits offering now and ensure it aligns with the needs of your workforce. A one-size-fits-all approach won’t work in 2025 – tailored solutions that address health, financial wellbeing and flexibility are key.
2. Communicate and educate: A well-designed benefits programme is worthless if employees don’t understand or appreciate it. Invest in year-round communication and education efforts to make sure your people know how to access and get value from their benefits.
3. Prioritise wellbeing: Wellbeing is now a critical business priority. Ensure your benefits package includes comprehensive mental health, physical health, and financial wellness support to meet the needs of your workforce. In the UK, there’s a surge in employers offering core and voluntary health benefits as these become increasingly valued by their people.
2025 will no doubt be another pivotal year for employee benefits. Those organisations that embrace the evolving trends I’ve explored will not only stand out as employers of choice, but they will also create a thriving, resilient workforce ready to take on the challenges of the future.
In partnership with Benefex
The home of award-winning employee benefits, reward, recognition, & communications.
