Roughly three-quarters (73 per cent) of Canadian employers say the rising cost of benefits is the No. 1 issue influencing their benefits strategy this year, up significantly from 40 per cent in 2023, according to a new survey by WTW.
The survey, which polled more than 145 employers across the public and private sectors, found more than half (55 per cent) plan to reallocate or rebalance their benefits spend over the next three years, up from just 10 per cent in 2024.
Rather than adding new offerings, many employers are aiming to extract greater value from existing plans through better financing, improved employee experience and enhanced vendor performance, the survey noted.
Read: U.S. health benefits costs rising to nearly 8% in 2025: survey
Mental-health concerns among employees continue to climb and more than half (55 per cent) of employers cited this as a top issue. They also cited the competition for talent (54 per cent), employee experience expectations (43 per cent) and cost-of-living pressures (32 per cent) among their challenges in 2025.
Nearly two-thirds (64 per cent) of employers said they plan to enhance value or switch to better-value vendors across health, retirement and risk benefits. Nearly half (44 per cent) said they aim to address high-cost medical conditions directly, while others are focused on delivery gaps in well-being programs (32 per cent), leave benefits (30 per cent) and health benefits (26 per cent).
To support employees and drive better outcomes, many employers are investing in communication, behavioural nudges and digital navigation tools, the survey noted, adding regular vendor reviews, often informed by employee feedback, have become a central part of this evolving strategy.
When asked about their top priorities for the next three years, employers cited mental health, maximizing value, health benefits, financial well-being and retirement benefits.
Read: 79% of Canadians would use mental-health services more if cost wasn’t a factor: survey