From spend to impact: the challenge facing employee health

Howden Employee Benefits has recently shared its Global Employee Health report, bringing together global data with insights from employers, employees, and insurers to reveal how employee health benefits are really evolving, and what that means for employees. 

The survey explores how rising costs, innovation and new treatments are reshaping employee health benefits. It also highlights the growing disconnect between what employers believe they are delivering and what employees experience, underlining the need for benefits that are both cost-effective and people focused.

We’ll summarise and explore many of the key findings in this blog. 

Employee healthcare: a key driver of attraction and retention

There is no doubt that employees are prioritising their health and wellbeing, and receiving a strong healthcare benefits package from their employers is non-negotiable. Out of global survey respondents, more than three in five (61%) employees state that they are more likely to stay with an employer who offers a good health package and almost half (47%) would factor healthcare into choosing a new job. Only 7% of global workers do not think it is an important benefit.

This reinforces the need for businesses to address their healthcare offering soon, otherwise both productivity and growth will suffer. However, this is of course a tricky task to navigate in a high-cost environment.

Striking a balance between managing costs and supporting your people 

Many employers are increasingly taking steps to mitigate rising costs, with the majority investing in prevention and wellbeing, particularly across the UK and Europe - 72% have utilised this strategy in the UK, compared to 67% globally, and just over half (55%) of these listed it as being the strategy which has worked best for them.

Global medical inflation is projected to reach 10.6% next year, and 93% of employers are correct in assuming that health benefits cost will rise again as early as this year.

This is going to have a profound impact on employers and poses a key challenge: reevaluating their employee health plans to save costs, whilst still meeting the needs of their people. And employers need to move fast. 

The report shows a growing disconnect between employer perception and employee reality. While the vast majority of employers (93%) believe their current healthcare plans meet the needs of their people, a quarter (25%) of employees do not agree that their employer supports their wellbeing, highlighting a substantial gap. 

There is an opportunity here though - whilst investment plans may be working, there is scope for improvement as a significant number of employees are yet to feel the benefit.

What do your people really want? 

Access and affordability remain critical pain points

Your people want quicker access to healthcare that’s affordable. They’re feeling frustrated about long waits for healthcare as NHS appointments continue to be delayed or cancelled. In the UK, only 53% of employees start treatment within a week of diagnosis, 33% say delays have made their condition worse. Despite having private cover, 40% paid out of pocket to get treated.

Usage alone is growing at double-digit rates, and privately funded procedures outside insurance have almost doubled since 2019. The costliest conditions in the UK are musculoskeletal, cardiovascular and cancer. 

Employers who help employees understand how to use their benefits, and who streamline the journey from symptoms to treatment, can reduce delays, improve health outcomes, and boost productivity.

A growing appetite for obesity drugs

Demand for new metabolic treatments like GLP-1s such as Ozempic is rising, and more than a quarter of UK employees have already used these treatments. In fact, 41% of employees believe their employer should cover these weight-management drugs as part of their healthcare plans, which is encouraging around 44% of employers to reassess their healthcare plans altogether. 

The rapid rise in usage means half of UK businesses who cover weight-management drugs now view them as a cost concern, directly impacting what they can offer as employee benefits. Just under half of businesses expect costs to grow even further, and one in five cite obesity-related conditions and the associated treatment as the single most prominent factor driving their costs up. 

However, while employers are going to have to absorb increased costs if they are to address demand and cover weight-management drugs, it could have a positive impact in the long-run. Weight-related illnesses, such as diabetes, account for a significant number of sick days, resulting in a lack of productivity. Many UK businesses are already investing in prevention and using weight-management drugs as part of this strategy could curb health issues before they have a detrimental business impact.

Demand is growing, and employers can’t look the other way. But the cost of new obesity drugs matters. These treatments are not a silver bullet - they should sit within a broader, more personalised approach to supporting weight-related health.

Mental health support popular, but stigma persists

Mental health support in the UK is widely available and used, with just under half (49%) of employees accessing this in the last year. However, stigma and uncertainty still stops many people from getting help when they need it. Confidentiality worries, concerns about career impact and fear of being judged all act as barriers. Many people do not know who sees their data, whether their usage will be visible to managers or what happens after they reach out for help. Without reassurance, people wait too long or disengage entirely.

Culture plays a key role here. Employees must feel confident that using mental health support is safe, accepted, and stigma-free - and managers are key to setting that tone. When leaders avoid the conversation or seem uncomfortable, employees quickly pick up on it. Mental health issues also intersect with musculoskeletal pain, sleep problems, and chronic conditions, meaning delays in support can worsen outcomes and drive-up wider healthcare costs.

To make support effective, employers need to address both cultural and practical barriers: reinforce confidentiality, communicate consistently, and create integrated pathways that normalise it. 

What can employers do?

UK employers are facing tougher decisions around healthcare design, access and affordability, Pressure on the NHS, rising use of benefits and new treatments mean health plans need clearer boundaries and stronger partner choices. As a result, many employers are actively reassessing their providers to look for better value plans and solutions.

A critical first step for employers is to understand what is driving cost, including rising claims, changing demand and the long-term impact of new treatments. Employers often need help deciding where to invest and where benefits should be limited to keep plans affordable.

Access and navigation are just as important as cover. Many employees are unsure how to use their plans or how to move quickly from symptoms to diagnosis, which can lead to delays or unnecessary self-pay. Organisations need a partner that can simplify care pathways and helps them select providers that can integrate clinical, digital and navigation support seamlessly.

Clear communication is central to everything. Uncertainty around coverage and confidentiality, particularly for mental health, can prevent employees from seeking help early. When employers explain clearly how benefit plans work, what is covered, and how privacy is protected, trust grows and support is used when it matters.