Let’s discuss compensation and benefits, or “comp and ben” as we refer to it in the HR space. In an increasingly competitive job market, offering equally competitive compensation and benefits is crucial for attracting and retaining top talent. While salaries are usually the first thing people look at and care about, your benefits package is also critical.
In the past few years, companies have been shifting toward holistic benefits that meet their people’s different needs and preferences. There’s also been a shift toward pay transparency in response to changing local regulations and an emphasis on equitable pay.
This blog will examine popular comp and ben strategies for 2025, including traditional approaches, evolving needs, and the future of employee benefits and perks.
Traditional approaches to compensation and benefits
Let’s start with the basics of comp and ben. Compensation consists of a base salary and bonuses, and may also include annual increases and performance-based incentives. Employee benefits come in many forms, with some mandated by law, and others as optional perks.
Traditionally, companies have taken a one-size-fits-all approach to benefits, offering a fixed package including standard healthcare, retirement plans, and paid leave policies.
Daniel Stunes, manager of data monetization with SHRM Data and Insights, explains this methodology, “Traditionally, companies would approach benefits from the standpoint of, ‘What is something we can offer that benefits the most amount of people?’”
While this may have worked in the past, rising costs, low engagement with standard benefits, and the competitive market have challenged the status quo.
In recent years, many companies started to take a different approach to comp and ben. They want to stand out in the market and offer a comprehensive benefits package that considers the wants and needs of their people to attract top talent and retain their existing workforce.
Compensation and benefits for a multi-generational workforce
Today’s workforce spans several generations and even skews towards older workers according to global consultancy firm Bain & Co, who found that workers aged 55 and older will make up a quarter or more of the workforces in G7 countries by 2031, an almost 10 percent jump from 2011.
This generational divide has different expectations and needs when it comes to benefits.
Multi-generational workforces appreciate receiving a choice of flexible and personalized perks. Millennials and Gen Z employees are attracted to benefits such as student loan assistance, career development stipends, and mental health support. In contrast, retirement planning, long-term care insurance, and traditional health benefits are popular among Gen X and boomers.
Compensation and benefits trends for 2025
To understand the current state of compensation and benefits, we looked at SHRM’s Employee Benefits Survey, an annual survey that captures trends in benefits and perks. 2024’s survey included 216 available benefits offered by employers, up from 175 just two years before, highlighting how much benefits packages have grown and developed in the past few years.
The survey also revealed that companies are adapting to evolving employee expectations and finding out-of-the-box ways to stand out in the market. Employers have shifted from a “one-size-fits-all” methodology to a more niche approach to benefits.
What benefits are companies offering today?
SHRM’s 2024 survey highlights employers’ current benefits and reveals some new trends. For example, menopause-specific benefits were included for the first time since the survey was established in 1996. Seventeen percent of employers now offer menopause support such as counseling and education. And, in another nod to the older segment of the workforce, four percent of employers provide grandparent leave.
One of the fastest-growing benefits is related to pets. “The adoption and rise of pet ownership has never been higher,” said Cerys Goodall, chief operating officer at veterinary telemedicine company Vetster. According to the SHRM survey, in 2024, 22 percent of employers offer pet insurance, up from 19 percent in 2023 and 14 percent in 2022, indicating a focus on the employee’s entire family, including their pets.
There’s also been an increase in student loan benefits, primarily benefitting Gen Z and millennials. Data from the International Foundation of Employee Benefit Plans (IFEBP) found that the percentage of employers offering student loan repayment assistance programs more than tripled from 2019 to 2024, from four to 14 percent, and a further 18 percent of organizations are now considering adding a repayment program to their benefits package.
Other highlights from the survey revealed that 12 percent of employers offer gender-affirming hormone therapy and that more than one-third of companies that provide bereavement leave have added time off for loss due to failed pregnancy, surrogacy, or adoption.
Expanding health benefits beyond the physical
While health insurance remains one of the most important perks for employees—especially in the U.S.—the survey revealed that many companies have added mental health support, including therapy, mindfulness programs, and stress management. There’s also a greater emphasis on preventative care and holistic wellness, with many companies providing gym memberships, nutrition coaching, and wearable health incentives.
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Emerging trends in employee compensation
Looking at the other side of comp and ben—namely, compensation—there’s also been a recent shift in how companies handle pay. Pay transparency is gaining traction in many companies due to new legislation and pressure from younger team members who demand clearer salary structures and DE&I-focused compensation strategies. Companies are also moving beyond traditional job titles and offering skill-based pay, rewarding their people based on their acquired skills.
Consider the benefits your people want and need
In recent years, we’ve seen a shift from a one-size-fits-all approach to benefits, to perks that are more personalized, flexible, and employee-first. Companies have expanded their offering from basic health insurance, retirement plans, and paid leave to benefit packages that answer the needs of their people, from mental health support to pet insurance.
Instead of relying on guesswork or imitating what other companies are offering, try conducting a survey where you ask your people what benefits they’d like to receive or take a moment during an exit interview to ask what they felt was missing. This way, you’ll learn what your people really want and they’ll feel heard.
Now is the time to adapt to changing workforce expectations and provide the benefits that your people want and need.
