Nobody knows better than benefits advisors just how much the employee benefits market has changed in the recent past. The industry’s evolution has been driven largely by growing demand for employee benefits, which have become ever more important to the employee value proposition in the continued battle for talent. In a labor market that remains tight (particularly for technology and AI talent), employee expectations for flexibility, choice and personalization in benefits continue to rise.
Demographic shifts complicate the challenges for employers seeking to optimize returns on their benefits investments. As Gen Z workers replace baby boomers, and millennials come to dominate the workforce, employers must navigate these cohorts’ very different priorities. For advisors, it is a complex and dynamic benefits landscape with rising employee expectations and employers demanding more value from every dollar spent.
These trends are reshaping the overall market and the rapidly changing role of benefits advisors, according to the 2025 LIMRA-EY Workforce Benefits study, which surveyed more than 800 US employers and 2,000 U.S. workers.
The changing role of benefits advisors
According to the research, an overwhelming majority (84%) of employers — and 95% of large employers — say benefits are critical to attracting top talent. It’s no wonder that 57% of all employers and 67% of large organizations expect to offer more benefits in the future. As demand for broader and more tailored benefits grows, employers expect advisors to build smart portfolios and connect them with partners that can deliver integrated, personalized experiences.
The clearest trend is for brokers to serve as strategic advisors and data providers in support of more informed and confident decisions. Nearly three quarters (71%) of employers say they are looking for advisors to share information on what employees want. Employers also want advisors to provide data on the latest trends relative to costs (61%), enrollment and participation (59%) and utilization (43%).
The survey also shows how clients evaluate and choose benefits advisors: 45% cite service quality as their top factor, followed by ability to design programs with holistic insurance coverages (39%) and to enhance overall benefits strategies (35%). Together, these priorities reflect employers’ belief that benefits advisors can help them navigate a wider range of options from benefits providers.
The evolving distribution landscape
Benefits advisors are still central to benefits distribution networks, though their relationships with clients, insurers and other benefits providers, ecosystem marketplaces and tech platforms will continue to evolve. Direct-to-employer channels are not seen as an immediate threat to advisors’ relevance. Why? Because advisors can help clients incorporate nontraditional benefits (e.g., wellbeing services) in their benefits programs and navigate the growing complexity of regulatory requirements — especially around state leave laws.
Alternative distribution models are gaining traction. Individual coverage health reimbursement arrangements (ICHRAs) offer employers opportunities to control costs while maintaining effective benefits delivery. However, employers remain cautious about how such significant changes might be received by employees. Professional employer organizations (PEOs) also show potential to serve underserved markets, but to attract larger employers, they must offer more configurable and flexible solutions.
Where advisors can add more value
There are clear opportunities for benefits advisors to expand their service offerings and further establish themselves as strategic advisors. Advisors can help employers tailor wellness programs to their workforce demographics, boost benefits return on investment (ROI) through higher utilization and align individual benefits with broader talent management goals.
Demand for freelance, gig and other nontraditional workers is rapidly increasing. With 77% of employers planning to expand their use of freelance labor and 61% willing to offer benefits to attract nontraditional workers, the market is clearly shifting toward more flexible and inclusive talent strategies. This is an opportunity for advisors to offer innovative ideas for new eligibility rules, develop purpose-built marketplaces and tailor benefits offerings to nontraditional workers.
Accelerating demand for absence and leave management services presents another opportunity for advisors to consult. With more employers offering paid family leave and related benefits, advisors can help orchestrate integrated, compliant and scalable solutions. Benefits advisors recognize the complexity of fragmented leave regulations across the US and understand employers’ willingness to pay a premium — two-thirds of mid-to-large employers prefer integrated absence services aligned with disability coverage over lower-cost alternatives.
Advisors may even play a larger role with technology transformation and integration. While 36% of employers expect benefits platforms and 32% expect insurers to provide technology for digitization, 25% see brokers as viable technology partners.
Advisors can advise on AI deployment that delivers personalized enrollment recommendations and improves benefits education. Brokers surveyed said they see potential for AI to transform underwriting, claims and client service through advanced data sources, like genetics and biometrics, enabling more accurate predictions. While regulators will influence this landscape, advisors can lead the industry by adopting AI-driven tools in their own operations.
Navigating talent constraints and ongoing consolidation
Industry analysts and observers have been monitoring consolidation among brokerages for many years. There are concerns regarding unintended consequences as smaller brokerage firms are acquired by larger shops: Will incentives for localized innovation be eliminated by the implementation of standardized processes? Will small- and mid-sized businesses receive less attention and lower service levels? Will general agencies (GAs), PEOs and other new market entrants seize market share as the competitive landscape evolves?
Consolidation is one way that advisors are addressing a significant talent gap. It has become more difficult for advisors to recruit the right mix of client relationship skills, industry domain knowledge and technical skills. An aging workforce means more veterans with valuable institutional knowledge and strong relationships are retiring. The bottom line is that talent availability and capability are becoming critical constraints for benefits advisors.
Consolidation and talent shortages will become a strategic issue in terms of advisors’ relationships with carriers. New compensation models and schedules may be necessary to support younger advisors as they build their books of business.
Workplace benefits remain a cornerstone of the employee value proposition and an essential tool in attracting and retaining talent. As the group benefits market experiences continue to change — especially in areas such as leave and absence management — advisors must evolve into strategic innovators. Their ability to leverage data, technology and personalized solutions will shape the future of benefits and drive better outcomes for employers, employees and the entire industry.
The views expressed in this article are those of the author and do not necessarily reflect the views of Ernst & Young LLP or other members of the global EY organization.
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