Employee benefits trends in 2025

Key takeaways: 2025 benefits trends

• People prefer customizable benefits over generic plans that do don’t meet specific needs.
• Group health insurance continues to be the most in-demand benefit.
• Interest in retirement savings plans has increased from previous years.
• People’s confidence in their benefits decision-making abilities is growing.

Showing genuine care for a workforce by offering in-demand benefits is crucial to a company’s success. In fact, when employees feel cared for at work, they report being 17% more engaged, 17% more loyal, 12% more productive and 29% more holistically healthy than employees who report they do not feel cared for at work.¹

However, just because a benefit has been historically popular does not mean it will remain so in the future. Employers must pay attention to the latest trends in the employee benefits market so they can anticipate people's changing needs and plan their next recruitment and retention strategies accordingly.

What’s driving benefits trends this year?

A noticeable shift is taking place within the workforce. As the costs of living and medical care continue to rise, employees want to feel valued and cared for by their employers more than ever. They want customizable benefits that work for them and their family instead of generic plans that do not meet their specific needs.

Top trends in employee benefits

A recent survey conducted by ADP² discovered the following employee benefits trends:

• Interest in retirement savings plans has increased
• Health care options are forcing difficult decisions
• Employees want their benefits to be personalized
• Confidence in benefits decision-making is growing

Retirement on the brain

For the first time in ADP’s employee benefits survey history, 401(k) plans tied with dental insurance as the second most important employee benefit, increasing by 11% in the last two years alone. Clearly, employees are thinking about their financial futures more than ever before.

Employers have an excellent opportunity to help employees prioritize retirement savings thanks to the SECURE 2.0 Act, which offers tax credits to offset plan costs. Once they’ve chosen a plan, they may want to take the following steps to increase employee participation:

• Expand investment options with a range of choices
• Implement auto-enrollment so it’s easy for every new employee to start saving
• Match contributions to incentivize and enhance savings potential
• Offer a financial wellness program that provides personalized guidance
• Enable access to online tools so employees can manage retirement on their own
• Integrate 401(k) plans with payroll so deductions are seamless

Health care options are forcing hard choices

A struggle for many people today is balancing health care insurance premiums with out-of-pocket costs while trying to save funds for unexpected medical expenses. Employees are split on how to address this challenge.

Of the people surveyed, only a slight majority (53%) prefer to have less money deducted from their paycheck and pay more at the time of care. The rest (47%) prefer to have more deducted from their paycheck and pay less at the time of care.

Meeting everyone’s personal preference may not be possible, but employers can still prioritize cost-effective, quality health care. Here’s how:

• Regularly review health plan options to determine the best cost/coverage balance
• Promote health spending accounts (HSAs) by highlighting their tax advantages and the ability to save for future health care expenses
• Provide matching contributions to HSAs
• Implement wellness programs that prioritize preventative care
• Ensure program information is easily accessible online so employees can make informed decisions

Employees want personalized benefits

One-size-fits-all benefits plans often fail to meet people’s true needs, as each individual is vastly different. At least three-quarters of employees surveyed report an interest in personalized benefits recommendations. Employers can deliver on such expectations by taking the following measures:

• Identify unique employee needs within the workforce
• Evaluate options to ensure that there are a wide variety of plan types and service offerings
• Regularly solicit employee feedback on the benefits they need and want
• Design a flexible benefits plan platform where employees can easily customize their benefits
• Consider legal requirements to ensure plan offerings meet all relevant laws

Benefits decision-making confidence is growing

The days of confusing paper benefits packets aren’t fully behind us yet, but employees’ confidence in their ability to make informed decisions about their benefits has increased. Most survey respondents (84%) say they are confident they chose the health care plan with the best overall value. The majority (81%) also say they know where to go to pick the right health plan.

Some practical tips to continue these positive trends include:

• Communicate early and often about where employees can find benefits information.
• Provide benefits information online and on mobile devices so employees can evaluate at a time that suits them.
• Invest in intuitive and user-friendly technology for benefits management.
• Provide ongoing education and support for benefits choices.

 

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Stay ahead of the curve with top employee benefits

With knowledge of the latest trends, employers can properly evaluate their existing plans and determine how to enhance them or offer new benefits for employees before the next open enrollment. Some of the popular employee benefits today include:

• Medical insurance
• Retirement savings plans
• Mental health coverage
• Dental and vision insurance

Medical insurance

Group health insurance continues to be the most in-demand benefit. Eighty-two percent of employees rank it their most important benefit, and 93 percent rank it in their top three.

Given this survey data, employers should sponsor medical insurance that provides affordable coverage and meets employees’ personal needs and preferences. They may also want to consider networks that include the leading providers in their area, as well as offering lower premium and higher deductible plans that withhold less money from employee paychecks each pay period.

Retirement savings plans

401(k) retirement savings plans are surging in importance, with 60 percent of employees ranking them in their top three most important benefits. This increase highlights how much employees are pondering retirement and their financial future.

Offering retirement benefits can help employees realize their long-term savings aspirations and prepare for lives beyond their jobs. It also shows that the organization cares about them and is invested in their financial well-being.

Mental health coverage

The societal trend of prioritizing mental health has translated into what employees are looking for in their benefits packages. Not surprisingly, the number of people ranking mental health coverage in their top three most important benefits has risen notably.

Employers can respond by offering an employee assistance program (EAP) free of charge to their workforce members. Ensuring that the medical plan covers comprehensive mental health care is also crucial.

Dental and vision insurance

Sponsoring dental and vision insurance may not feel as impactful as offering mental health coverage or 401(k) benefits, but it’s still important to a wide swath of people. In fact, 63% of employees rank dental insurance as a top-three benefit, and 31% rank vision as a top-three benefit. Employers should consider providing both dental and vision coverage options within their benefits package to meet demand.

Frequently asked questions about employee benefit trends

What are the latest trends in employee benefits?

A recent employee benefits survey conducted by ADP found that people are thinking about their financial futures more than ever before, while health care options are forcing difficult decisions in the near term. The study also found that people want their benefits to be personalized, and they have growing confidence in their benefits decision-making abilities.

What benefits do employees want most?

A recent ADP benefits survey found that traditional benefits, like health insurance and dental insurance, remain in demand or are gaining popularity. Here’s the breakdown:

• 82% of employees rank medical insurance their most important benefit.
• 63% of employees rank dental insurance in their top three most important benefits.
• 60% of employees rank retirement savings plans in their top three most important benefits.

ADP Editorial Team The ADP editorial team is comprised of human resource professionals with extensive experience solving complex HR challenges for businesses of all sizes.

¹MetLife’s 22nd Annual U.S. Employee Benefit Trends Study 2024

²2024 ADP TotalSource® Employee Benefits Survey

This article is intended to be used as a starting point in analyzing trending employee benefits and is not a comprehensive resource of requirements. It offers practical information concerning the subject matter and is provided with the understanding that ADP is not rendering legal or tax advice or other professional services.