U.S. Employers Overlooking Key Benefit Opportunities Impacting Employee Engagement and Retention

A recent report from HUB International Limited sheds light on significant gaps in how U.S. employers manage employee benefits. The 2025 U.S. Workforce Vitality Gap Index indicates that while many organizations aim to enhance their employee benefits, they often depend on inadequate data, leading to missed chances for boosting employee engagement and productivity.

This lack of insight can have severe repercussions. Linda Keller, COO of Employee Benefits at HUB, noted that companies are striving to attract talent in a competitive job market but may not fully understand the preferences and needs of their workforce. As a result, the strategies they implement may not align with what employees truly value, which could negatively affect productivity, retention rates, and workplace culture.

Despite employees expressing a desire for benefits that truly cater to their needs—such as flexibility and financial wellness—many organizations still prioritize compensation over these critical areas. Jim O'Shaughnessy, Managing Partner of HUB Retirement and Private Wealth, highlighted that while employers often aim to provide financial support, the solutions they offer may not resonate with employees, indicating a disconnect that leaves many employees dissatisfied.

Key Findings from the Index

The HUB report provides several notable findings that employers should consider:
1. Personalization Drives Retention: Approximately 75% of employees would be more inclined to stay with their current jobs if their benefits were tailored to their personal needs. However, many employers still fail to implement such personalized programs.
2. Flexibility Over Pay: Employees place a higher value on work-life balance and flexibility, often ranking these benefits above salary. Despite this, most employer programs tend to focus primarily on compensation.
3. Mental Health Participation Lags: While over one-quarter of employees report mental health concerns, the uptake of support programs is low, suggesting there is a gap in awareness or perceived value among employees.
4. Increased Spending Not Always Effective: Although 72% of employers are planning to enhance their total rewards programs, they need to leverage accurate data to ensure their investments yield maximum value.

The Business Costs of Misalignment

The report emphasizes that misaligned talent strategies could have significant business costs. Even when organizations invest heavily in benefits programs, ineffective strategies can lead to disengagement, higher absenteeism, increased turnover, and challenges in attracting new talent.

In today's economic climate, leaders are tasked with maximizing efficiency while minimizing costs. Therefore, aligning employee benefits spending with performance outcomes is essential to ensuring that these investments are truly effective.

Conclusion

HUB International encourages employers to approach benefits planning strategically by utilizing accurate and current data. This approach enables organizations to design benefits that truly meet their employees' needs and avoids unnecessary expenditures. In essence, prioritizing employee preferences in benefits planning is not simply good practice; it is a necessary business strategy for fostering a healthy, engaged workforce.

For further insights, organizations can access the full 2025 U.S. Workforce Vitality Gap Index. HUB International also invites employers to connect with their employee benefits or retirement advisors to optimize their strategies and better support their workforce, both nationally and across borders.

About HUB International

Based in Chicago, Illinois, HUB International Limited is a leading global insurance brokerage and financial services firm that specializes in risk management, insurance, and employee benefits. With over 20,000 employees across North America, HUB provides tailored solutions and advocacy to help clients navigate an ever-evolving landscape of challenges. To learn more, visit HUB Media Center.