Summary
Re-evaluating your benefits administration strategy may help support greater talent retention and organizational cost savings. We created this blog to give HR and benefits leaders a clear, data-driven reason to step back and take a fresh look at their current strategy.
What's inside:
- Statistics that may reveal opportunities to optimize your benefits program.
- Questions to consider after each data point.
- Insight into how data-driven tools and unified platforms can address these challenges.
The world of employee benefits is ever changing, requiring HR and benefit leaders to constantly be aware of the variables that may impact their strategy. An effective benefits strategy must account for everything from regulatory requirements to meeting the needs of multiple generations in the workforce.
When used strategically, benefits may support employer-of-choice goals, talent retention and organizational cost management. If that's not enough to encourage you to step back and look at your current benefits strategy, these industry statistics may entice you:
1. Benefits continue to make up roughly 30% of total compensation costs1 and health care costs are rising at their fastest pace in 20 years.2
Employer-paid benefits accounted for about 30% of total compensation costs for private industry workers as of early 2026, according to data from the U.S. Bureau of Labor Statistics.1 Layer on top of that Marsh (formerly Mercer)'s2 projection that total health benefit cost per employee will rise 8.2% in 2027—the steepest increase since 2003—and it's clear that the benefits line item deserves the same scrutiny as any other major budget category.
Predictive modeling can analyze claims trends and utilization patterns to estimate the potential cost impact of a plan change before you make it—and may help identify issues and waste concerns, such as ineligible dependents. Employers seeking to manage rising costs can use data to help inform earlier decisions.
Questions to consider:
- Do you have the visibility you need to see where your health care dollars are going?
- How are you ensuring only eligible employees and dependents remain on the plan?
- Are you able to use predictive analytics to model costs before you commit to a plan design change?
2. 62% of covered employees select the more expensive health plan3 and one-third of surveyed benefits-eligible workers said they don't fully understand their benefit options.4
Our State of Employee Benefits 20263 revealed that 62% of covered individuals enrolled in a traditional plan vs 38% in an HDHP when both options were available. This decision may reveal an opportunity to support employees with personalized guidance, considering that 41% of American workers admit they don't fully understand their benefits, according to Voya’s 2025 research.4
When employees aren't equipped to make an informed decision, they may select coverage that does not align with their needs or expected costs. Decision-support tools may help employees evaluate more than the premium price.
A benefits guidance tool can provide an enrollment experience similar to a "customers also bought" feature. Rather than requiring employees to interpret plan documents without assistance, it can analyze available household data and expected needs to surface a short list of potentially suitable options—helping employees compare alternatives rather than defaulting to last year's plan simply because comparing alternatives feels like too much work.
Questions to consider:
- Can employees easily compare plans and access decision-support resources at the point of choice?
- Are employees able to estimate their likely out-of-pocket costs based on their own claims history and expected usage?
- Does your benefits administration platform surface personalized recommendations rather than a static list of options?
3. 90% of surveyed employees who used personalized guidance reported greater satisfaction with their benefits choices than the year before.5
Among employees who used personalized, data-driven decision support during enrollment, 90% reported being more satisfied with their health benefit selections than they were the year before, according to a 2025 Voya survey.5 A modern benefits platform that pairs consumer-friendly design with data-driven guidance can help transform enrollment from a confusing annual chore into something closer to a guided shopping experience—one that steers employees toward the option that helps them evaluate options based on their individual health and financial situation.
Employees may compare enrollment with other consumer experiences rather than with last year's paper benefits packet. A consumer-oriented experience can include clear comparisons, transparent cost estimates, and guided decision support available when employees need it. Mobile-first enrollment can allow employees to compare plans, estimate costs, and complete enrollment from a supported device on their own schedule. A more familiar experience may encourage engagement and confidence in plan selections.
Questions to consider:
- Does your enrollment experience feel as intuitive as shopping on a familiar consumer app or website?
- Are you using video, interactive tools, or other multimedia to make benefits easier to understand?
- Can employees complete enrollment and access their benefits information from their phone, start to finish?
4. Benefits rank as the #2 strongest factor both in attracting employees to an organization and in driving them to consider leaving — second only to pay.6
According to SHRM's Q2 2026 Global Employee Monitor,6 pay and benefits are leading factors in an employer’s ability to attract and retain talent. Benefits are one way employees assess how much an employer invests in them, which may make it useful to consider the differing priorities of a multigenerational workforce when developing a benefits strategy.
Decision-support tools can consider an employee's demographics, past claims activity and life-stage data to provide a more personalized benefits experience tailored for them: which plans and voluntary benefits are more likely to align with an employee's stated needs and preferences across health, savings and protection.
Meanwhile, plan design can account for today’s multigenerational workforce. Offering employees options instead of a “one size fits all” package may help them weigh what matters most to them rather than assuming everyone has the same priorities.
Questions to consider:
- Does your benefits package include options that support employees' broader financial well-being, not just health care?
- What opportunities do you have to differentiate your benefits offering from others in your industry?
- Do your employees actually understand—and value—the full scope of what's in their benefits package?
5. A single dependent verification audit saved one company an estimated $777,000 in a year.7
A professional services firm with more than 20,000 U.S. employees moved onto a unified benefits administration platform to replace a patchwork of legacy systems. Running a dependent verification audit through that platform surfaced ineligible dependents still enrolled in the plan, resulting in an estimated $777,000 in savings for a single plan year. The same platform consolidation also reduced administrative demands during open enrollment so successfully that its leader felt comfortable taking vacation during open enrollment—something that would have been unthinkable under the old, manual process.
That's the kind of cost typically sitting in plain sight: not a rate negotiation or a plan redesign, but data that nobody had easy visibility into. A unified platform may support more efficient administration and cost-saving opportunities by helping identify those issues that manual processes may miss.
You can't improve what you don't measure. Tracking benefits administration KPIs consistently can help organizations gauge progress, identify opportunities, and monitor spending. Benefits ROI may include cost per employee as well as measures associated with retention, engagement, and decision-making confidence. Potential measures include audit findings, help-desk volume, retention data, and year-over-year satisfaction with plan selections.
Questions to consider:
- When was the last time you ran a dependent eligibility audit and do you have the tools to run one regularly, not just once?
- Does your benefits management system integrate with your HCM or ERP solution to eliminate redundant work and reduce data errors?
- If your organization is growing through M&A or rapid headcount changes, can your current systems keep pace without manual reconciliation?
Download the Benefits Administration Buyers Guide as a resource to help evaluate your current benefits administration strategy as well as the technology that supports it.