A third of proposals to change and invest in employee benefits are being blocked by management teams due to a lack of evidence that the plans would achieve the desired outcomes.
A survey of 360 businesses, representing almost two million employees, found that the high number of rejections highlights growing pressure on HR and reward professionals to justify benefits investment with data.
They are being required to up the business case ante while also responding to external influences and employee demands.
However, collecting and using data to drive meaningful change remains a challenge for HR, according to the Benefits Design Survey 2025, from Howden Employee Benefits conducted in partnership with Reward & Employee Benefits Association (REBA).
Respondents told researchers that a lack of data maturity is restricting their reward strategies and their ability to measure the return on investment (ROI) of their benefits package.
Four fifths (80 percent) of respondents are concerned that future proposals will be refused unless they work up stronger business cases.
Stronger business cases require richer data, but the survey found there were large data use gaps when it came to informing benefits decisions.
Only two data points are used by the majority of survey respondents. They are benefits costs, which are used by 67 percent, and employee satisfaction, used by 62 percent. Data on absence rates are used by just 42 percent, while healthcare claims data is used by 35 percent and wellbeing scores by 23 percent.
In spite of the large proportion of benefits proposals being rejected, more than 80 percent of respondents said they had still managed to make significant changes in the past year. They reported that workforce health and wellbeing was the main driver of change.
Researchers said that this demonstrates increasing employee demand for access to employer-sponsored services, combined with greater pressure on workplace culture and productivity.
Matthew Gregson, executive director at Howden Employee Benefits, said: “This year’s research evidences the clear imperative for reward professionals to embrace the use of data in both governing their programmes, engaging decision-makers and driving change. Without it, benefits and wellbeing programmes may well stagnate, not keeping pace with the expectations of employees or needs of the organisation.”
Decision-Making spotlight
The research also examined how data was used to bring about change. Researchers confirmed that the seniority level for decision making differs between benefits. For example, pension changes are almost three times as likely as wellbeing changes to go to the board for approval.
This could be for two reasons: the size of the change, because amending pensions can be complex and expensive; the lack of board-level engagement with wellbeing, possibly due to a lack of compelling data.
Researchers also found a difference in the type of data used to make decisions.
For pensions, benchmarking (used by 85 percent of those proposing changes) is more than twice as likely as member outcomes (38 percent) or ROI modelling (29 percent) to gain management approval.
Researchers said the concern is that decision-making is being influenced by one metric only – competitiveness.
In comparison, when assessing the different pillars of wellbeing, people proposing changes use employee opinion data “significantly more” than claims and other metrics to inform recommendations.
Gregson said: “Although it is recognised that there are significant barriers to getting and analysing quality data, it is clear that today not enough of the right data is used to validate recommendations that are being put in front of the board and other decision-makers.
“Reward teams need to focus in on the specific problems they are trying to solve and working hard to obtain data that can demonstrate a much clearer link between the proposals they are making and the outcomes they want to drive.”
Data quality blocks
The research identified a number of barriers that HR and reward professionals need to overcome to improve their data maturity.
Almost six in ten (59 percent) reported that they struggle with data availability and usability, more than half (51 percent) face difficulties in gathering external benchmarking data, while 48 percent lack the tools and 24 percent the skills to analyse and interpret the data.
For larger employers, there will likely be the budgets and the need to bring those solutions in-house and up-skill reward teams or work in partnership with data teams in the business to improve data maturity.
However, mid- and SME organisations are expected to become increasingly reliant on their benefit advisers and insurers to help them achieve greater data maturity. The provider said that this is where the market needs to respond with data, research and tools to help empower HR and reward teams.
Debi O’Donovan, director at REBA, said: “Despite being seemingly awash with sources of data, there are still significant gaps in the analysed data insights that employers really need. However, as employee benefits continue to be used more strategically within businesses, these insights gaps will close. Especially as employers work with consultants and providers to improve analytics.”
Gregson added: “I can’t remember a more pivotal time in reward strategy, due to so many internal and external challenges facing employers. And with economic uncertainty and employer costs increasing, additional budget to solve problems and enhance offerings will not come easily.”
He said that this is where the research provides “a clear imperative and blueprint” for HR and reward professionals to “really embrace the use of data to govern their programmes”.
They can use this data to “engage senior stakeholders and enable better decision-making” and where initiatives have been delivered, these types of metrics will prove that the continued value of investment in benefits and wellbeing is a key business driver, he added.
