HR leaders are grappling with a wide variety of challenges today. Whether it's rising costs, decreasing engagement or exceptionally high expectations around benefits, organizations are scrambling to find the best way to support their employees.
Employee benefits programs are typically used for this purpose, but organizations will need to be careful. The key in 2026 is to take a strategic, data-driven approach to employee benefits, designing programs that are both affordable and personalized to support employees and also attracting and retaining talent.
Rising costs lead to strategic decisions
With economic uncertainty impacting both organizations and employees – not to mention the expectation that health care costs will rise by roughly 10% in 2026 – HR leaders will have to find a way to modify existing programs to fit their budget. But rather than defaulting to across-the-board cuts, which often eliminate benefits that many employees expect and rely on, they will have to embrace a smarter strategy.
Solution: Workers demand excellent benefits, both from existing employers and when considering job offers. Embrace the data analytics and AI-powered tools that can allow organizations to better predict trends in benefits usage and identify cost-saving opportunities. Consider alternative approaches, such as benefits captives and direct primary care arrangements, which can offer greater transparency and control.
Focus on overall wellbeing
While many employers say they have a wellbeing strategy, employee participation often remains low. This highlights a critical truth: wellbeing initiatives fail when they seem meaningless or are disconnected from workplace culture.
Solution: Wellbeing isn't just about getting your steps in or in-house massages. HR leaders will need to take a more holistic view of wellbeing, including not only physical, mental and financial health, but also retirement planning and workplace culture and growth. Some of these can be addressed by programs the organization likely already has in place, but the C-suite will need to actively support the programs and lead by example. What's more, a strategic program, lead and used by company leadership, will be more effective than a single, isolated program.
Strengthen retirement planning
Roughly two-thirds of American workers are confident they are saving enough for retirement. At the same time, however, they are aware that the rising cost of living will make it challenging for them to save enough to feel secure. And many employees who participate in retirement plans are reducing contributions or shifting investments due to economic uncertainty.
Solution: In 2026, HR leaders are integrating their retirement plans into broader financial wellbeing strategies that help their employees to prepare for a wide variety of financial challenges, including emergency savings, debt management and personalized financial guidance. This helps support employees' financial wellbeing overall, but it has a side benefit of reducing employee stress and improving workplace productivity.
Lower engagement and the role of benefits
Employee engagement around the world fell by at least 2 percentage points in the last year – costing businesses $428 billion in productivity. This almost certainly stems from uncertainty in the workplace, including economic volatility, layoffs or even AI adoption. Employees are unsure where they fit at work and whether their contributions are valued. And complications outside work – whether it's a medical condition, mental health challenge or even caregiving responsibilities – bring additional stress.
Solution: A one-size-fits-all approach no longer works for a multigenerational workforce with diverse needs and expectations, but HR leaders who truly understand what their employees need and want will have the edge. With employee benefits acting as a lever for improving engagement and retention, organizations that take the opportunity to provide those benefits will come out ahead. Personalized benefits, developed with the help of workplace data and employee personas, can not only build trust with employees but also increase engagement and productivity.
Looking ahead
To achieve all of these goals, HR leaders will need to shift their focus. Gone are the days of standard benefits packages. Today's workplace demands data-driven decisions to match the high stakes of the workplace. AI-powered HR platforms can streamline those routine tasks and make it easier for HR teams to focus on the strategy.
To strengthen your employee benefits program in 2026, consider these tips:
- Dive into the data. Utilize those HR technologies to find out how your employees are using their current benefits and what they may still need. Invest in advanced benchmarking, peer comparisons and predictive analytics to uncover the details, and determine specific goals to develop an effective plan.
- Use your expert advisor or broker as a guide. Your broker is an expert in employee benefits and strategic decision making. Ask them to help you determine what your employees need and want and set goals around those benefits. Finally, use those suggestions to make the right choice for you and your organization.
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