At our recent UK People Solutions Forum, HR and benefits leaders shared the key challenges shaping their priorities for the year ahead. The discussions revealed a set of persistent pressures – including rising rates of ill health, shifting employee expectations, and mounting financial constraints – that are forcing organisations to rethink how they design and deliver their benefits programmes.
The six themes below reflect the issues that attendees told us are demanding the most attention – and our thoughts on how they might respond.
1. How can we support employees with mental health and wellbeing challenges, and create resilience throughout our workforce?
Mental health was listed as the biggest workforce health challenge facing forum attendees. Various factors are driving a mental health crisis in the workplace, including excessive workloads, poor work-life balance, and inadequate managerial support. This is driving record employee uptake of mental health services, including counselling and wellbeing, which are often available via Private Medical Insurance (PMI) schemes. Younger cohorts are the biggest users, with financial pressure and job insecurity among their key concerns.
Employers face an ethical imperative to support their employees. But there is also a strong business case for improving how tackling poor mental wellbeing. Employees suffering from conditions including depression and anxiety are more likely to make errors or poor decisions. They also exhibit higher rates of absenteeism, or presenteeism (low productivity due to low mood, burnout, or poor mental wellbeing). The ripple effects of these behaviours can create operational challenges for employers, and may carry additional financial, legal, and reputational risks.
To better care for employees facing mental health challenges, employers should look to proactively identify and mitigate potential risks. Cultural shifts, including setting reasonable workloads and ensuring (particularly junior) staff receive adequate supervision, can help employees to feel safe and supported. Further interventions such as stress management schemes and wellness programmes can prevent difficulties from escalating.
2. Cancer and chronic illness claims are rising – how can we ensure employees receive the care they need?
Cancer and chronic conditions are becoming a major pressure point for HR and benefits leaders. Rising cancer rates – particularly among younger people (opens a new window) – are driving higher volumes of PMI claims. For many employers, this is creating uncertainty around what they are expected to provide, and how to navigate the overlap between their existing PMI scheme and NHS services. In tandem, lifestylerelatedlifestyle-related health concerns are becoming more common, with half of over-50s suffering from metabolic issues. As a result, employers are increasingly likely to find themselves supporting employees managing multiple longterm health conditions.
The complexity of coverage around cancer and chronic illness presents another challenge. Employers and employees alike may be surprised to learn that certain chronic illnesses fall outside the parameters of their PMI scheme, while certain cancer treatments may be capped or restricted. As such, prevention becomes the new cure. To mitigate against future PMI claims, employers may explore means to popularise healthier lifestyle choices among their staff. This could involve modifying benefits to positively reinforce key messages, such as controlling alcohol intake and adopting a balanced diet.
Despite this, quantifying a tangible return on investment for prevention initiatives can be difficult. Changes to behaviour don’t happen overnight, and the benefits may not be reaped for years down the line. Employers must remember that prevention is a long-term investment, not a short-term cost.
3. We’re facing a data overload – how can we create usable and actionable insights for our benefits strategy (and can AI help)?
A consistent theme among attendees was the problem of data. Many employers now hold vast quantities of data, yet struggle to separate insight from noise. While more data is often considered beneficial, too much can become paralysing – obscuring patterns in how employees use their benefits, and delaying necessary actions.
Instead, strategic thinking is crucial. Rather than collecting data blindly, employers should focus on the high-value sources that are set to add value to their decision making. Methods of collection must be robust, too. For instance, while employee feedback can offer a useful insight into employees’ thinking, it may exhibit bias towards those who are more highly engaged with their scheme. Similarly, aggregating data across diverse cohorts can mask crucial differences in behaviour, leading to misinterpretation or small conclusions. Smaller employers may face the specific challenge of limited sample sizes, which can distort results.
Artificial intelligence (AI) is beginning to reshape this landscape. Many employers are already deploying AI-tools to process clinical and demographic data, monitor benefits usage, and manage budgets. As an always-on strategic tool, these tools can shift the relationship between employers and their data, and supporting employers to optimise their benefits strategies. But the technology must be embraced with caution, with appropriate checks to ensure transparency and data quality.
4. What can I do to make my benefits programme relevant to all generations?
Keeping benefits programmes relevant across an increasingly diverse workforce is a complex strategic task. With five generations now working side by side, employers must accommodate differing needs, expectations, and patterns of benefits utilisation. This includes rising sickness absence among Gen-Z, millennial-driven uptake of childcare support, and growing demand for cancer and chronic illness care among older generations.
For employers dealing with this juggling act, it is critical to consider demographics trends, how expectations vary by geography, and how a rising retiring age can further complicate the picture. Crucially, differences don’t just manifest in which benefits employees value, but also how those benefits are accessed, and which forms of communication resonate most.
To combat this, employers must adopt a dynamic approach to benefit design. Retrospective data is no longer enough for proactive planning, with productivity strains felt long before absence occurs. This involves tailoring communications by segment, and simplifying pathways to make benefits intuitive for all age groups. Digital tools, while useful, must not exclude those without the confidence to use them.
For employers, delivering such a personalised level of provision is sure to be a challenge. But the benefits are likely to be felt in improved retention and attraction.
5. How can I ensure my benefits programme retains value despite building cost pressures?
Employers have been contending with several financial pressures in recent years – from rising wages and increased NI contributions to elevated borrowing costs and persistent inflation. As a result, many have been forced to reassess their benefits spend. At the same time, employees are not immune to these pressures – and now more than ever, they will be looking to their employer for support.
Against this backdrop, there is greater need than ever for a disciplined approach to benefits management. Employers should consider how they can simplify and consolidate benefits to eliminate waste, and ensure budget is directed where it delivers the greatest impact. Once again, AI-powered analysis and dynamic budgeting tools can help employers to identify overlaps, and correct inefficiencies in real time before costs escalate.
Optimisation also becomes a strategic priority (opens a new window). Businesses invest significant resources into their benefit packages, but unless there is significant buy-in among employees, benefits will deliver little return. As a result, tracking uptake and employee satisfaction becomes crucial – ensuring programmes remain responsive to employee needs, and enabling employers to justify benefits spend.
6. Our benefits are in place – but employees aren’t engaging with them. What should we do to communicate more effectively?
The challenge of engagement was a recurring concern among attendees. Even when employers invest heavily in comprehensive benefits, employees may struggle to understand what’s available, or how to access support. This confusion is often fuelled by fragmented pathways, duplicated services, and poor communication. As a result, benefits often go underutilised until a specific need arises.
To overcome these barriers, employers must focus on targeted communications. Messaging may respond to key life and in-work events, such as new starters or an approaching retirement. Alternatively, as employees accustomed to AI-enabled tools expect increasingly granular information around their benefits, employers may look to adopt similar tools that can live within existing workflows (such as Slack or Teams) to give personalised answers on demand. These systems can help employees better understand which support is relevant to them, and guide them through the relevant pathway. In parallel, auditing providers and consolidating services can help to eliminate overlaps, while saving employer spend.
Ultimately, to build trust in their benefits programme, employers must apply the same discipline to the EVP that they would devote to customer experience. If benefits are easy to understand and effortless to use, employees are more likely to engage.
For more information, reach out to a member of our People Solutions team.
