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Rising Benefit Costs: Employer Strategies [2024] | WTW
- Employers are increasingly concerned about rising benefit costs and are adjusting their strategies to manage expenses, according to a recent survey by WTW.
- Many employers are responding by rebalancing their spending.
- In addition to seeking cost savings, employers are also focusing on extracting maximum value from their current benefit plans.
Faced with spiraling benefit costs, employers are actively rethinking their strategies for 2025. A new WTW survey reveals that the primarykeyword, rising benefit costs, now top the list of employer concerns, prompting significant shifts in how organizations manage their employee benefits. This article from News Directory 3 dives into this critical focus on value and secondarykeyword, cost management. Discover how companies are re-evaluating spending, exploring new vendors, and maximizing the ROI of existing plans.We analyze the changing landscape, including the re-allocation of budgets and a sharper focus on employee engagement, particularly regarding mental health resources. Learn how employers are adapting to provide effective healthcare,manage financial burdens,and boost workforce satisfaction. Discover what’s next in the evolving world of employer benefits.
Employers Rethink Benefits Strategy amid Rising Benefit Costs
Updated June 13, 2025
Employers are increasingly concerned about rising benefit costs and are adjusting their strategies to manage expenses, according to a recent survey by WTW. The survey highlights that 90% of employers identify rising costs as a primary influence on their benefit strategy, a significant jump from 67% in 2023. This shift indicates a growing need for companies to re-evaluate their approach to employee benefits.
Many employers are responding by rebalancing their spending. The WTW survey found that 63% of employers plan to reallocate spending within the next three years, a substantial increase from the 8% that reported similar plans last year. This reallocation often involves exploring new benefit vendors, with nearly three-quarters of respondents considering a switch to save money.
In addition to seeking cost savings, employers are also focusing on extracting maximum value from their current benefit plans. This includes addressing high-cost medical conditions (44% of employers) and adopting preferred provider networks (37%). By focusing on these areas, companies aim to provide effective healthcare while managing expenses.
“After a long period of high benefits inflation and in the face of a possibly weakening economy, employers are taking a step back and looking to focus on what drives real value for employees and the business,” Jeff Levin-Scherz, population health leader for North America, health & benefits, at WTW, said.
Employers are also working to boost employee engagement with existing benefits, especially in areas like mental health. WTW suggests that companies will increasingly use communication strategies to encourage employees to take advantage of available resources, enhancing their overall experience.
What’s next
Looking ahead, employers will likely continue to prioritize cost management and value extraction in their benefits strategies.This may involve further reallocation of spending, adoption of new technologies, and enhanced communication efforts to ensure employees are making the most of their benefits packages.