Two-thirds of employers, or 67 per cent, are directing spend towards preventative healthcare as they look to manage rising medical inflation, according to Howden.
According to its Changing Face of Employee Health report, which highlights the growing prominence of healthcare as a core employee benefit, health support is becoming a stronger factor in workforce decisions.
Three in five employees, or 61 per cent, say they are more likely to stay with an employer that offers a good healthcare package, while 47 per cent consider it important when assessing a new role. Only 7 per cent of workers globally say healthcare is not an important benefit.
Meanwhile, in response to cost pressures, employers are continuing to focus on prevention and wellbeing. Globally, 67 per cent say they have adopted this strategy, with 55 per cent identifying it as the most effective measure they have used to manage rising medical costs.
The report shows that rising medical inflation is the main factor behind increased employer investment in prevention and wellbeing. Howden’s insurer data within the report predicts medical inflation of 7 per cent in 2026 net of CPI, meaning total inflation will be well above 10 per cent.
According to the report, most employers believe their health provision is effective. Globally, 93 per cent say their health plan meets employee needs and 86 per cent believe they achieve a good return on investment. Employee sentiment is more mixed. One in four employees, or 25 per cent, do not agree that their employer supports their wellbeing.
The report also highlights ongoing changes in the market, with 23 per cent of employers switching healthcare providers to secure a better deal. Additionally, 39 per cent are planning to switch and a further 26 per cent would consider switching if they found a better option.
The report also shows that 93 per cent of employers expect medical costs to increase and 41 per cent expect a significant rise. Regional expectations vary. Employers in IMEA expect costs to rise by 58 per cent. The figure is 27 per cent in Europe, 28 per cent in the UK, 52 per cent in Asia, 46 per cent in LATAM and 36 per cent in the Pacific.
Howden CEO and global practice leader of health & employee benefits Glenn Thomas says: “The findings show how quickly the world is shifting, with AI, new treatments and rising costs reshaping the health and benefits landscape. Employers are feeling the pressure. If organisations don’t recognise their people as their greatest asset and address people risks directly, productivity and growth will suffer. A healthy workforce is now the engine of performance.
“What stands out in the data is the gap between what employers believe they’re delivering and what employees say they’re receiving. Healthcare benefits are becoming non-negotiable for talent, yet many workers still feel their needs aren’t being met. It’s no surprise that so many businesses are now looking at substantial changes.
“Leaders can’t afford to wait. The pressures highlighted in this report show just how fast things are moving. Benefits must be both cost-effective and genuinely fit for their people.”
