The Future of Employee Benefits for the Year 2025

Employee benefits cannot be a footnote or an afterthought these days. Companies in the US are even considering adding GLP-1 drugs, such as Ozempic and Wegovy, to their employee benefits program. These drugs, which are used to treat type 2 diabetes, also double as weight-loss tools. Employers are vying for their employees' attention and continued service, which is a major shift in the workplace equation. This is where employee benefits play a huge role as it attracts top talent, boosts productivity, and increases loyalty.  

Would you consider one job over another if it offered better benefits? They have become a vital component of employment these days since the security of a job alone doesn’t warrant continued motivation every day. 

Some of the most common employee benefits you will see in Indian companies are: 

• Health insurance coverage 
• Dental coverage 
• Disability coverage 
• Car and bike fuel allowances 
• Stock options and equity
• Maternity and paternity leave 
• Certificate reimbursement 
• Recreational facilities

The workspace has evolved and has become a hub for social interaction. The opportunity to work from home started as a stopgap measure for business continuity. Since then, it has been considered a crucial benefit. Employees now are looking for employers who offer a hybrid work environment because it offers flexibility. 

In this article, we look at the future of employee benefits for the year 2025, and the kind of impact it will have on employees and employers alike. 

Employee Benefits Trends for the Year 2025:

The benefits offered to employees are tailored to meet the unique needs of the employees. With more than 470 million people in the workforce in India, the demand for the right benefits would be different across the country. Here, we take up some of the employee benefits that will become commonplace in 2025, and beyond.

Creating Personalizable Benefits Packages:

A cookie-cutter benefits program will not always work as people have different expectations. A young new hire will prefer a travel benefit versus daycare benefits as the latter isn’t in line with their current lifestyle. A Gen Z employee might choose pet insurance and a free pass to a pottery class. You might soon see employers discussing the benefits package with new hires and personalizing them to match their tastes. 

During the employee onboarding process, technology can be leveraged to create a benefits portal that allows for the selection of their benefits. Employees must have access to benefits that are truly beneficial to them. If they were to receive something completely unrelated to their way of life, they would be disillusioned by their employer’s lack of understanding. 

Offering Flexible Work Arrangements:

According to the Pulse of the Profession Report by the Project Management Institute (PMI), 44% of Indian organizations have adopted a hybrid model while 10% are working fully remotely. Employees consider long commutes as a waste of personal and professional productivity. This is one of the biggest motivations behind working with a company that offers a flexible work arrangement.  

The Great Big Survey by Regus says:

• 93% choose flexible working over non-flexible working
• 61% would change jobs for flexible working
• 61% would turn down a non-flexible job
• 48% would have stayed in the previous job for flexible working

The above are the main reasons why flexible work arrangements are already a much sought-after perk. 

Financial Incentives:

Monetary incentives will act as a huge fillip for employees to go the extra mile. Employees who exceed company expectations must be rightfully rewarded. For most people, money is the ultimate motivator. Offering cash rewards instills a sense of purpose and accomplishment. Such incentives can be given to those who show high performance or hit the highest quota. 

Here’s how you can offer monetary incentives:

• Commissions
• Profit sharing
• Additional time paid off
• Gift cards
• Employee stock options 
• Individual bonuses

Do note that financial incentives can be a double-edged sword. They can demotivate employees who do not reach those goals and cause bitterness among employees. But when employed the right way, it encourages high performance and challenges them to break boundaries. 

Health and Wellness Incentives:

Corporates like TCS, Wipro, and L&T, have traditionally offered health benefits such as regular health screening tests and insurance coverages. Today’s employees are managing a variety of mental health challenges in and out of the workplace. Mental health conditions are linked with absenteeism, low productivity, and high turnover. This is where we will see a new shift in wellness benefits.

Employees are increasingly expecting ongoing support from employers to help with their mental well-being. One of the most important steps in creating an engaged and healthier workforce is to provide free access to cognitive behavioral therapists and psychiatrists. 

Here’s how employers can offer mental health support:

• Make mental health training mandatory for those in leadership and managerial positions
• Train employees to see signs of emotional distress
• Include mental health coverage as part of your health care plan
• Provide direct access to mental health professionals
• Offer regular workshops so employees can understand more about mental health

Creating a Rewards and Recognition Program:

A well-designed recognition program can drive an 11.1% increase in average employee performance. Organizations are only starting to realize the importance of having a recognition and rewards program as an incentivizing tool. Those with such a program will see an increase in employee retention and employee engagement. Frequent recognition will be a part of the company’s culture so much so that it can be facilitated from anywhere with a single click. 

Here’s how employers can create an effective rewards and recognition program:

• Define the objective of starting the program
• Engage with your employees to understand the rewards and recognition perks they prefer
• Ensure that the program is aligned to meet the organization’s goals and needs in the long run
• Come up with clear criteria for getting rewarded
• See the overall impact of the program and measure it accordingly

The success of the program depends on how well it is implemented. Make employees aware of the program and encourage them to be a part of it. 

Wrapping Up:

Companies that invest in employee benefits will see its after effects in its bottom line. That’s how powerful a rewards and recognition program is since it builds a highly engaged and productive workforce. Creating an employee benefits program that aligns with the lifestyle and aspirations of your employees is the perfect way to a successful employee-employer relationship.

For businesses that are looking to empower their employees with a comprehensive employee benefits program, The Reward Store is here to help you. 

Get in touch with us and we will show you how our rewards and recognition program can change the dynamics of your workforce.