The quality of the employee experience will become a more pressing concern in 2025, given an employment environment that may well be more unsettled than it was during the “Great Resignation” of 2022.
 
Delivering will come down to affordable, vital and resilient employee benefits. That may be a tall order as costs mount while needs and expectations change. Data-driven strategies are critical for meeting the challenge.

Here are the influences at work.

Look Under the Hood at Healthcare and Insurance

Employers must go beyond stop-gap solutions to the ongoing rise in medical costs, which is likely to see its biggest increase in 13 years – trending at a projected 8%.
 
Prescription drug prices remain the biggest pain point; pharmaceutical spending may increase as much as 12% this year and prices by about 3.8% in 2025. There’s no relief with the expansion of the use of GLP-1 drugs (for weight loss and their originally intended diabetes management), as well as costly gene-tuned therapies.
 
Standard solutions to rising health insurance premiums tend to be short-term fixes and impulse thinking, like increasing employee cost shares or removing costly drugs from their plan formularies. The long-term trade-off can be employee frustration and additional expense, along with lower productivity and worsening health.
 
A more sustainable, longer-term solution is to put health claims data to work by applying clinical informatics and data analytics. The insights gained into identifying the controllable risks, along with improved analytics around provider contracts, are invaluable to reducing unnecessary medical and pharmaceutical cost burdens.

Ensuring Benefits Programs Add Value When Employment May Tighten

For all that U.S. employment levels have tended to grow in 2024, many business sectors can’t fill open positions.
 
It’s happening at a time when the workplace is poised to undergo a profound shift as many businesses embrace artificial intelligence and automation. Still, getting the most out of the workers they do have is a big concern: productivity has grown at an annualized 1.6% rate in the current business cycle, below the long-term rate of 2.1%.
 
Effective management of the full scope of benefits takes on heightened importance in this environment. It’s the total package – and how well the offer anticipates and responds to individual employees’ needs – that is integral to a quality employee experience. It also influences business success.
 
Even though it isn’t filling headlines like AI, training is the sort of benefit that has an impact on the employee experience and is worth touting. Even with tech-driven shifts in the workplace, workers still need to be trained – upskilled – to be able to work with AI and other technology. That’s easier and less expensive to do with existing employees, and 85% of employers invest in their people to develop new skills.
 
The ultimate challenge in 2025 for employers in creating the optimal employee experience will be relevance. That means benefits structured to meet the individual’s needs, wherever they are in their life journey. Getting there will again put the spotlight on data analytics to uncover the particulars – whether the financial and life planning needs of an older worker or the family planning and care issues of Gen Zs.

The Elephant in the Room? Employee Mental Health

The mental health crisis in the U.S. shows no sign of abating. Addressing it with a focus on well-being programs will be a priority for employers in 2025.
 
Anxiety (affecting 42.5 million Americans) and untreated mental illness (41%) have a profound cost in dollars and health. Related crises result in 60 million primary care visits annually, with 6 million more trips to emergency rooms. The “burned out” are three times more likely than others to job hunt.
 
It’s not just a productivity or compassion issue - it’s a financial one, as utilization of behavioral health benefits is escalating among 80% of employers. Even so, meeting the need is a challenge, given the high cost of therapy and the shortage of mental health professionals.

Mental Health is Health. There are solutions, starting with employee well-being programs that take a comprehensive and integrated approach to supporting workers’ whole health. Specific benefits addressing mental health should be explored, as well. Emerging digital platforms combine telepsychiatry with digital therapeutics and wellness apps (for everything from fitness to meditation) that help users manage stress and anxiety. Improved productivity and reduced absenteeism are other bonuses.
 
Further, cultivating more “human-centric” workplaces built around flexible work, collaboration and empathetic management makes for a cohesive environment while reducing stress and burnout. Once again, analytics will prove invaluable as a deep dive into claims and costs will reveal overall wellness trends and identify gaps in access and benefits equity. That’s the way to optimal employee – and business – wellness.

Author Bio

Jeff Faber is the Chief Strategy Officer for global insurance brokerage HUB International’s Employee Benefits Practice. He is responsible for the development and execution of cutting-edge cost-containment, risk-reduction, and employment-enhancing initiatives.

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