'Tis the season for predictions, and an employee benefits CEO is forecasting more employee training to meet challenges, cost-shifting healthcare benefits and more hybrid work in 2025, based on what his clients in the tech, professional services, healthcare and manufacturing sectors are telling him.
Companies that lean on artificial intelligence "copilots" to assist their employees will have to plan for continuous reskilling of those employees to adapt to the accelerating A.I. capabilities, says Jon Cooper, chief executive officer of Overalls, an employee benefits provider that offers concierge assistance with non-work tasks.
"Employees who are being reskilled now in a year will have to be re-reskilled because the tools will have evolved to become more sophisticated as well," he says. "The departments responsible for employee education and upskilling, that will be a major focus for 2025 for a lot of companies: investing in their education capabilities."
In the area of healthcare benefits, Cooper predicts that companies in 2025 will take drastic measures to lower their costs, driven in part by the 2024 increases in healthcare plan renewal rates that many of his clients have reported, Cooper says.
Experts from HUB International reveal their outlook for employee benefits in 2025, from healthcare to AI.
"There's been an increasing shift of just putting more and more of the cost on employees," he says. He expects more companies will choose individual coverage health reimbursement arrangements (ICHRAs), where employees buy health insurance on their and companies reimburse them for some or all of their premiums, or reference-based pricing where the company pays a set price per healthcare procedure and the employee pays the difference if the actual cost is more.
Companies might also pair cheaper high-deductible healthcare plans with other insurance that pays out only in specific circumstances, like accident or cancer policies, which will create more paperwork burdens for employees, Cooper says.
"That's extraordinarily complicated for individuals to navigate," he says. "We see that a lot in our business; when people have this combination of products they're coming to us and saying, 'Hey, I don't know how to do this.'"
"It's putting a lot of responsibility to navigate a very complex situation on consumers who in many cases are already dealing with an accident or a family member who's sick," Cooper says.
Instead of blanket wellness benefits such as companywide gym memberships, more employers are offering individual benefits budgets for employees to select their own solution, he says. Some employees might choose a gym, while others might allocate their budget on fertility treatment, for example.
More companies in 2025 will also extend employee benefits that address employee life problems earlier, with the intent of avoiding lost time from work and more expensive interventions later on, Cooper says. A poll by Overall in 2022 showed that 83% of the 1,350 surveyed employees had lost work time "to life's struggles" and 43% had taken two weeks off from work to deal with an issue.
"Businesses are trying to go earlier upstream and say: 'What is that underlying problem that's causing the stress; Can we address that?'" he says. "From a mental health standpoint, it's not looking at it just as treating the symptoms through therapy, but trying to prevent the issues from reaching that tipping point in the first place."
More of his clients are beginning to incorporate an employee benefits element to their disaster and business continuity planning, especially in the wake of catastrophic wildfires, floods and hurricanes in 2024, Cooper says. Companies have set up emergency assistance pools of money reserved to help get employees back to work if their house is flooded or burned down, for example.
"More and more H.R. departments have to spend time thinking about: How do we respond and how do we help our employees in these situations?" he says. "As the frequency of those increases from climate change, the impact on businesses is getting larger and larger."
About half of Overall's clients are tech or professional services companies, and Cooper says he sees signs of a tech hiring rebound in 2025 as companies lift hiring freezes and raise more capital again, and as mergers and acquisitions activity increases in the sector. That will lead to a shift back to more hybrid work arrangements, he predicts.
"The number one thing they're recruiting on—and how they're trying to attract people away from Google and Amazon—is that they offer completely flexible work," he says. "As the market calls for talent and people start hiring again, it'll be a little harder to be so regimented about going back to the office five days a week."
Greater liquidity and greater competition for talent will also lead to more spending on employee benefits by tech companies in particular, Cooper says.
"Companies are starting to say: 'OK, there is a path to raising more capital, a path to exiting. Therefore, we can start to spend more,'" he says.
