As economic headwinds pick up across Asia Pacific, with Hong Kong especially feeling the pinch, companies are getting smarter about managing rising costs and keeping their best people engaged.

The latest 2025 Benefit Trends Survey by WTW suggests the old remedy of throwing more money at problems is being tossed out. In its place, businesses are sharpening their pencils and rethinking how to get more value from the benefits they already offer.

Rising costs push benefits into the spotlight

According to WTW, a staggering 81% of employers in Hong Kong cite rising benefit costs as the primary factor shaping their benefits strategy for 2025 – a steep climb from 64% just two years ago. The region is staring down a projected 9.8% spike in medical costs this year alone, putting significant strain on corporate health budgets. Add to this a series of unrelenting pressures cited by employers:

• Talent competition (65%)
• Fiscal constraints (56%)
• Rising employee expectations (38%)

Benefits are also no longer just an HR hygiene factor – they’re fast becoming a lever for business strategy.

“Budget constraints, talent issues and the uncertainty on the potential impact of tariffs show no signs of easing soon,” said Eric Lam, who leads the Health & Benefits segment for Hong Kong and Macau at WTW.

Employers are evaluating how to mitigate these challenges through their existing employee benefit programmes.”

No longer more – just better

Rather than expanding their menu of perks, most organisations are now focused on squeezing maximum value out of what they already offer. It’s about doing more with less and doing it smarter.

In the next three years, 58% of companies in Hong Kong plan to rebalance or reallocate their benefit spend. This isn’t about cutting but about recalibrating. A majority (61%) are said to be eyeing better-value vendors across health, retirement and risk offerings, aiming to enhance quality without adding zeros to the budget.

Only 25% plan to directly address costly medical conditions, and just 27% intend to build networks of preferred medical providers – a sign that the focus is squarely on strategic adjustments rather than wholesale overhaul.

The human side of smart spending

What’s driving these changes isn’t just spreadsheets – it’s people. Employees today are demanding more personalised and more meaningful benefits that reflect their needs. And in a high-pressure, high-cost environment like Hong Kong, they’re looking to their employers for support that feels tailored rather than templated.

Companies are responding with a renewed focus on three fronts: value maximisation, health, and inclusive benefits. That includes better communication, behavioural nudges, and navigation tools to help staff make informed decisions. They’re also paying closer attention to the performance of vendors and gathering feedback directly from employees to course-correct when needed.

“Organisations are facing more pressure than ever to deliver the right benefits strategy,” Lam said.

It’s not about increased budgets and ever-increasing programmes.

“Instead, it’s focusing on smarter spending and finding innovative solutions for old and new challenges. These can include reshaping benefits or even targeting support and spending on the benefits that matter most, enabling personalisation and helping employees make better decisions.”

Strategic benefits as a talent magnet

The stakes are high. In a market where top talent can pick and choose, the value and relevance of benefits can tip the scales. Employers who lag behind risk more than disengagement – they risk departure. With budgets under siege, the temptation might be to trim what’s often considered “non-essential”. But that would be a short-sighted move.

The survey underscores this point: employees don’t just want more. They want better. They want benefits that reflect their stage of life, their goals, and their concerns – whether that’s navigating health care, saving for retirement, or simply feeling seen and supported.

By offering well-designed, purposeful benefits, employers are not only protecting their talent pipelines – they’re also reinforcing company culture and deepening engagement.

From nice-to-have to need-to-invest

WTW’s survey, which included responses from over 5,500 employers across 105 markets – 1,994 of them in Asia Pacific and 104 in Hong Kong – highlights a pivotal shift in thinking. Benefits are no longer a static line item on the budget sheet. They’re dynamic tools for talent retention, cultural alignment and even risk management.

The days of cookie-cutter perks are behind us. In their place, a more strategic, data-informed approach is emerging – one that treats employee benefits not as a cost centre but as a cornerstone of business resilience and growth.

Employers who think beyond pay packets – and see benefits for what they truly are – gain a competitive advantage in the war for talent. Or to borrow an old saying, they’re not just throwing perks at the wall to see what sticks. They’re building with purpose to create workplaces where people want to stay.