Steadily rising costs and increased demand for personalization mean employers must keep a closer eye on the return on their benefits investments in the coming year.
“As companies and HR teams navigate another year of workforce challenges, one truth remains: benefits can make or break your talent strategy,” according to the 2025 Annual Lifestyle Benefits Benchmark Report from the employee benefits platform Compt. “But not just any benefits — the kind that flex and adapt as quickly as your people’s needs do.”
Analysis of transactions in which employees made purchases at more than 65,000 vendors worldwide revealed several insights that can help employers align with both organizational and employee expectations.
- The power of flexibility. All-inclusive stipends account for 71% of company budgets. They combine categories such as health and wellness, family care and personal essentials into one flexible benefit, helping employees address both daily needs and long-term goals.
- Health and wellness still lead. Health and wellness remains a priority for employees, accounting for 18% of stipend spending. This reflects the importance of investing in employee wellbeing.
- Rise of professional development. Spending on professional development increased from 13.3% in 2023 to 15% in 2024 in the non-taxable category. This shows that companies now recognize the need for upskilling to meet evolving workplace demands, particularly in fields such as AI and technology.
- Student loan repayment gains traction. Employers recognize the burden of student debt on employees’ financial wellness. With repayment growing from 6.8% to 12% of nontaxable spending, it’s a key tool for attracting and retaining top talent.
- Regional differences in stipend funding. Stipend funding varied regionally, with the West spending $1,259 per employee and the Midwest spending $632, reflecting differing market dynamics.
- Adapting to hybrid work. Spending on remote work office equipment declined from 4% in 2023 to 3% in 2024, reflecting the ongoing shift toward hybrid models and stabilization of remote work setups. Return-to-office mandates also are heavily influencing this trend, as employers balance varying work locations.
“2025 will demand more variety from benefits programs than ever before,” said Amy Spurling, founder and CEO of Compt. “Winning companies will recognize benefits as a critical piece of compensation as well as employee support, as teams navigate complex personal and professional challenges. The future belongs to flexible, inclusive programs that adapt to individual needs in a broader workplace evolution.”