For several years now, employee benefits programs (health, life insurance, retirement, employee savings, wellness, etc.) have been experiencing continuous inflation: increased regulatory complexity, rising costs, heightened social expectations, and competitive pressure to attract talent.
At the same time, the macroeconomic and social context is becoming more challenging :
- Sustained inflation in healthcare and life insurance costs
- Successive reforms of pensions and social protection
- Tensions in the labor market and difficulty in retaining key skills
- Growing employee demands for meaning, fairness, and protection.
Given these findings, it is tempting to treat employee benefits as simply a cost item to be contained or a social obligation to be managed at a minimum.
At KYU, we believe that it is possible to leverage employee benefits to make them a real strategic tool for compliance and attractiveness while optimizing costs.
1. What if the CSRD were an opportunity for mutualization ?
Employee benefits are sensitive and complex issues that must comply with local regulatory requirements, which vary greatly from one country to another, while also meeting the specific expectations of each employee population. This is why they are very often managed and controlled locally with a high degree of autonomy and without interference from corporate headquarters, which, in fact, has little visibility into how its employees are protected.
Beyond local regulations and market practices, the Corporate Sustainability Reporting Directive (CSRD) requires European companies to publish detailed information on their environmental, social, and governance (ESG) impacts. Its social component is particularly important for employee benefits policies, as it includes transparency requirements on :
- Working conditions and well-being: health, safety, work-life balance ;
- Access to employee benefits: health insurance, pension plans, preventive measures ;
- Equality and inclusion: indicators on diversity, equal pay, equitable access to programs.
The companies concerned must publish a sustainability report in accordance with ESRS (European Sustainability Reporting Standards), including specific, quantifiable, and comparable social indicators across all their own activities, in Europe and internationally (e.g., health coverage rates, prevention spending, employee satisfaction).
The companies concerned must publish a sustainability report that complies with ESRS (European Sustainability Reporting Standards), including specific, quantifiable, and comparable social indicators across all of their own activities, in Europe and internationally (e.g., health coverage rates, prevention spending, employee satisfaction).
Our advice: take advantage of this requirement to map out employee benefits on a global scale and define the Employee Benefits policy you want to embody.
2. What if we turned employee benefits into an insurance strategy that serves your employer brand ?
The health, welfare, and retirement plans that companies put in place are not just administrative obligations; above all, they are major social commitments that companies make to their employees, which directly influence their attractiveness and ability to retain talent. However, they are often managed locally, without a consolidated vision or integration into the overall social responsibility strategy promoted by Human Resources.
In reality, a well-structured Employee Benefits policy can become a powerful tool for attracting and retaining talent and promoting employee well-being—in short, for enhancing the employer brand—while aligning with the company’s CSR commitments and values.
To achieve this, it is essential to :
- Centralize governance to manage risks and harmonize practices ;
- Communicate effectively about the quality and strength of coverage to build trust and attractiveness ;
- Align the Employee Benefits strategy with Group policy to transform these programs into a competitive and sustainable asset
Our advice: make Employee Benefits a differentiating factor for your employer brand to improve the well-being of your employees and attract and retain talent in a sustainable manner.
3. What if we optimized employee benefit costs ?
Beyond the current economic and political context, employee benefit budgets are under increasing and continuous pressure due to:
- Significant medical inflation: globally, healthcare costs are rising by an average of 10% per year, with varying degrees of disparity between countries, due to the combined effects of aging populations, medical innovation, and rising pharmaceutical spending ;
- Increased social performance requirements: employee expectations in terms of health coverage and well-being are growing rapidly, which is driving up budgets.
In this context, the implementation of pooled solutions (international pooling, captive reinsurance companies, pooling agreements with insurers) becomes a strategic lever for :
- Reducing costs through risk consolidation and claims pooling ;
- Improve negotiating power with insurers by consolidating volumes ;
- Manage health and welfare expenses globally by integrating performance indicators and international benchmarks
Alongside mutualization, brokerage relationships also need to be rethought, as they have changed little despite fundamental shifts in the sector. The commission-based remuneration model remains the norm, which can lead to a lack of visibility with overall costs that do not distinguish between the cost of risk and associated expenses.
This remuneration model also has a negative effect because it is not controlled. In an inflationary market such as the one we have been experiencing for several years now, this results in automatic remuneration increases that are not correlated with the actual workload.
Our advice: explore mutualization solutions and challenge your brokers to increase the scope of your Employee Benefits and offset the impact of medical inflation while securing your medium-term budgets.
