Skip to content

The Next Horizon: Adapting to Changing Workforce Benefits

Author

Patrick T. Leary, MBA, LLIF
Corporate Vice President, Workplace Benefits Research
LIMRA and LOMA
pleary@limra.com

July 2025

The workforce benefits landscape continues to evolve at a transformational scale. To explore the implications of a changing landscape, LIMRA and EY partnered on the third edition of our Harnessing Growth research series.

Since the publication of our 2023 study, several new considerations have emerged that are impacting the benefits environment. The peak of the pandemic is behind us, and employers’ work models are stabilizing. Five generations are currently in the workforce, and we have reached a generational tipping point.

According to the Bureau of Labor Statistics, as of late 2023, Generation Z workers eclipsed Baby Boomers in the workforce. Gen Z now accounts for 18 percent of the overall workforce and is expected to represent more than 30 percent by 2030. 2025, however, has introduced both business and labor force uncertainties as a new administration introduces new policies and initiatives; employers now operate in an unpredictable environment.

Six Themes

Our new research surfaced six themes that will help organizations identify opportunities for profitable growth in a dynamically changing environment and to be vigilant in the face of change.

First, despite the changes that have occurred in the business environment and the labor force, one thing remains certain: workforce benefits remain central to employers’ value proposition in the competition for talent. Employers across all size segments expect to offer the same or more benefits in the future. This outlook presents significant opportunities for benefits organizations as they look to connect workers with the coverages they need. But the workforce itself is changing, as employers look to utilize different approaches to meet their staffing needs.

Figure 1. In five years, do you think your company will be offering fewer, the same or more benefits than it does now?

(Percent of Employers)


Filter the data in this chart by clicking on a color bar in the chart legend.

Source: Harnessing Growth in Workforce Benefits: The Next Horizon, LIMRA and EY, 2025.

Freelance/Gig Workers

The second takeaway from our research is that the demand for freelance labor is growing and is underserved. As mentioned earlier, employers are operating in an unpredictable environment. To address staffing needs while remaining nimble, many employers use freelance workers. Almost two-thirds of employers currently use freelancers (to at least some extent). In five years, that number is expected to rise to 77 percent.​

At the same time, many workers, particularly younger workers, look to gig and freelance work as a viable option for a primary source of income or to supplement income from an existing full-time occupation. How will this growing segment of workers obtain the insurance, retirement, and related coverages that they need? Many employers are looking to offer benefits to freelance workers; covering these workers will require a reexamination of worker classification, benefits eligibility, and other requirements.

As the labor force evolves, so do benefits needs. Our 2023 study introduced the Wheel of Wellness, a new lens through which benefit providers and employers can view workforce benefits programs in a holistic way.

Benefits Evolution

The third takeaway from our research is that the aforementioned Wheel of Wellness continues to remain very relevant and showcases further the evolution in benefits needs. Our research finds that both employers and employees value a wide range of benefits, from traditional high-utilization benefits to benefits that address holistic wellness needs. Few benefits have seen a decline in interest, and, as we surfaced in our earlier research, generational differences are pronounced.

One benefit that has emerged as a priority is paid family or medical leave. For both employers and employees, this benefit ranks in importance just below high-utilization benefits, such as medical and dental insurance, and ahead of well-established benefits such as life and disability insurance. This brings us to our next key takeaway: the “next horizon” of absence/leave management services is emerging.

Absence/Leave Benefits

Our research indicates that absence/leave management services are becoming increasingly important to employers, as many are expanding both the number and types of leave options that they provide to their workforce. Absence/leave management offerings can consist of an array of mandated and company-provided leaves, which present significant challenges for employers, who must track and administer these plans.

This is especially the case for employers that operate in multiple states, each of which may have different mandates. As a result, many employers are looking to outsource (either fully or partially) the administration of their programs to insurance carriers, payroll providers or third-party administrators. Addressing the challenges related to leave management programs and their administration can absorb significant time and HR capacity, potentially impacting the delivery of other benefits. As such, employers will lean on their partners, including their brokers, even more for assistance in developing their workforce benefits plans. Brokers are a well-established and successful distribution channel, but their role is evolving as market forces and other parties exert strength and authority.

Brokers’ Role

Our fifth takeaway is that benefits brokers remain essential; however, just as the workforce benefits landscape is evolving, so too is the role of the brokers. Brokers shared with us that their clients are demanding more and are hyperfocused on the economic value (i.e., return on investment (ROI)) of their programs. Brokers are also concerned about sales capacity and ushering in the next generation of strategic brokers.

This may introduce a sales and service gap as a generational shift occurs in the brokerage sales force. And while brokers expressed the need for innovation, a majority believe artificial intelligence (AI) will be where disruption comes from, which is our final key takeaway.

Figure 2. Most Important Factors When Choosing a Broker/Benefits Advisor

(Percent of Employers)

*Multiple responses allowed

Source: Harnessing Growth in Workforce Benefits: The Next Horizon, LIMRA and EY, 2025.

AI Disruption

Our final takeaway is that organizations must digitize or risk being disrupted, and AI may be the catalyst. The role of technology continues to accelerate across the landscape of workforce benefits, and AI provides significant opportunities to break through and address long-standing challenges that the industry has faced.

Employee interest and expectation in digital capabilities in areas such as online claims submission, online enrollment and digital communications continue to increase. Our research shows that four of the five largest digital capability gaps exist in the claims function, and these areas provide significant opportunities for organizations to deliver impactful data-driven experiences.

These capabilities include same-day claims payments; the ability to proactively trigger claims based on medical data; real-time integration for claims management with human resource information systems (HRIS); and an integrated claims experience based on a singular event. AI provides optimization opportunities across the benefits life cycle and can improve experiences, drive better engagement, and improve efficiencies.

Conclusion

Our research shows that benefits are at the heart of the employee value proposition. However, the marketplace is changing — along with the needs workers are looking to address. To succeed, organizations must remain vigilant in this evolving environment by offering benefits and services that resonate most, while also engaging digitally to remain relevant and support the changing needs of today’s workforce benefits landscape.

 

Did you accomplish the goal of your visit to our site?

Yes No