2025 Benefit Trends: What Brokers Need to Know to Stay Competitive in the Coming Year

Quick look: With financial pressures continuing to mount for many employees, this presents an opportunity for brokers and their clients to align benefit programs with financial wellness initiatives to provide support where employees need it most and stay competitive in the years to come.

Are benefits more important to employees than salaries? Research shows nearly 60% of employees would accept a slightly lower salary for employer contributions to health savings and spending accounts (59%) and better voluntary benefit offerings including critical illness and disability income (54%).

While establishing fair wages will always be “in style,” benefit trends illustrate the employee desire to secure their financial future in other ways. These days, traditional employee benefits like medical, dental, vision, and life insurance serve as a baseline, with hopes of an additional payoff from other long-term financial support.

While there are numerous ways to approach a financial-forward benefit plan, here’s a look at what’s being prioritized to enhance retention, engagement, and job satisfaction and the part a professional employer organization (PEO) plays in helping brokers and small- and medium-sized business (SMB) clients reach their goals.

Employees are focused on their financial future

Inflation is impacting employee financial health, and brokers must remain aware of these challenges and find ways to address the unique needs of their SMB clients.

Saving for retirement is still a significant part of the plan. However, benefit trends show employees are also invested in debt payoff, quicker access to their earnings, and education about how to manage and grow their finances.

401(k) retirement plans

401(k) retirement plans still top the list of financial benefits employees want and expect from their jobs. In fact, in some states, like New Jersey for example, it’s legally required for businesses with 25 or more employees to offer a 401(k).

It’s important to stay up-to-date on these requirements as they can change from year to year depending on state and federal regulations. However, beyond compliance, SMBs also need to educate their workforce about how these plans work and the long-term benefits of participating in a 401(k) to encourage participation.

Student loan assistance

Employers may consider offering student loan assistance or tuition reimbursement programs. Though not every company may have the resources to offer this benefit, it’s valuable to explore the option since 45% of workers consider student loan repayment assistance the single most important employee benefit.

These types of programs are often conditional upon employees remaining with the company for a set period or repaying the funds upon departure, offering mutual benefits to the employer and the employee.

Earned wage access (EWA)

The conversation around EWA has gained traction with many U.S. employers considering it as a future financial wellness benefit. Also known as on-demand pay, earned wage access is just as it sounds.

Employees receive access to their earnings instantly without being tied by a standard paycheck cycle. However, since this is a newer concept for U.S. employers, there are still compliance issues to iron out before being adopted. Nevertheless, brokers should have the idea on their radar if, and, when an SMB client inquires.

Financial education

With multiple generations making up the workforce, employees seek tailored advice from financial advisors or retirement specialists who can work with them regarding specific challenges or questions regarding their financial benefits.

Some employees are focused on transitioning to retirement while others may be focused on eliminating debt. Making financial resources and referrals readily available through an Employee Assistance Program (EAP) can help employees make more informed decisions as they save and invest.

Voluntary benefits provide personalization opportunities

Though financial wellness benefits are what’s currently in high demand, there are other areas broker clients can offer to be effective. This includes voluntary benefits, such as:

Supplemental health benefits

Nearly half of small firms offered critical illness coverage in 2023 and the numbers continue to rise. Other supplement health benefits may include mental health support, family-forming services, and assistance with addressing substance abuse disorders, among others.

Identity theft protection

Data breaches have caused rising concern for people who want to protect their online identity. As a result, some employers are expanding coverage beyond their business and offering it to employees for their personal use as part of a voluntary benefits program.

Legal assistance

Multiple industry reports show an uptick in employers offering legal services to provide employees assistance for family planning, in particular, including adoption proceedings and the creation of wills and trusts.

Determining true benefit value with a PEO

Understanding benefit trends gives brokers and SMBs a starting point to evaluate current plans. Yet, to maximize value, it’s helpful to partner with a PEO to ensure benefits align with a company’s overall growth strategy through:

Benefit customization

Employees are more vocal about what they want and need from their jobs, making it easier to customize benefit plans which will be most effective. Working with a PEO like ExtensisHR gives broker clients access to premium benefits from the best providers at competitive prices which are then tailored to fit specific SMB needs.

Technology implementation

Digital immediacy has become the expectation for people in all areas of life. Accessibility to benefits is no different. Whether it’s delivering provider network updates or making it easier for employees to update their profiles, housing benefit information in a centralized place helps to streamline the process.

Dedicated customer support

Technology is only as good as its driver, making the human element essential. Automating certain administrative tasks frees up the time needed to address individual challenges. ExtensisHR takes a people-first approach, with a fully dedicated customer service team and an on-demand knowledge base, to provide well-rounded support.

Developing a successful benefit strategy is a complex endeavor. Between maintaining compliance, aligning with a company’s budgetary needs, and meeting the demands of employees, having an expert HR and benefit partner is a game changer.

As a broker-friendly PEO, we deliver personalized attention and solutions which are adaptable to a changing environment to continually align with company goals.

Let us share more about how our HR and benefit services can make a positive impact for you and your clients. Contact ExtensisHR today.