Personalized benefits: The lever for engagement & retention in 2025

By Suvarna Mishra, HR Director at Pluxee India: In 2024, global employee engagement dropped to 21%, resulting in over US$400 billion in lost productivity worldwide, another reminder for leaders to revamp people strategies amid evolving work dynamics. The figures mirror the engagement slump of 2020, reminding leaders that action is urgent and overdue.

Hybrid work, digital acceleration, multigenerational teams and shifting life priorities have redefined what employees value. From mental well-being and financial security to purpose-driven work and flexibility, priorities have become more personal and nuanced.

According to a recent Mercer study, 55% of HR leaders across IMEA (India, Middle East, Africa) now place employee experience at the top of their agenda to attract and retain talent.

Traditional, standardized benefit frameworks are no longer enough. Tailored programs and flexible benefits have become core to earning trust and retaining talent, not just to meet expectations but to build loyalty and sustain performance in a changing world.

From one-size to right-size: Navigating the challenges of flexible benefits

Today’s employees want workplace benefits to reflect their individual circumstances, aspirations and life stages. This goes far beyond standard insurance policies and paid leave.

Pluxee India insights show that 36% of employees now seek greater parental and childcare support. Paid leave is increasingly expected not only for newborn care but also for ageing parents, sick children and unconventional dependents.

Single parents, primary carers for elderly or differently abled family members and even pet parents are shaping benefit expectations for the modern household.

Virtual care and guided health services have also grown in value. Employees’ appreciation for their benefits is on the rise as employers expand choice and access. Virtual consultations and cost navigation tools now rank among the most appreciated additions to benefit portfolios.

Employees are no longer passive recipients of predefined benefits, they expect voice and choice, with the freedom to configure packages that fit their changing needs and drive their engagement.

Yet while the case for personalization is clear, the reality is more complex. Shifting from static, legacy benefits to flexible, tailored models poses structural and cultural hurdles. Cost frameworks are tough to overhaul, especially for businesses used to traditional funding models.

Many HR leaders must still navigate outdated systems that limit data-driven personalization. Digital readiness, integration of new platforms and ensuring data security add further layers of complexity.

Workforce diversity itself creates a balancing act, aligning multiple generations, lifestyles and priorities within the same policy framework. A mindset that sees benefits as transactional costs rather than strategic investments can slow progress too.

HR leaders need to build a strong case for change, clearly linking modernized benefits to measurable impacts on engagement, retention and productivity metrics.

The strategic advantage of personalization

Organizations that treat personalization as an advantage see employees feel heard and supported, leading to higher retention and stronger employer brands. A thoughtful, flexible benefits strategy signals that people are understood as individuals, not just as workers.

This directly influences whether employees stay and grow with their employer or look elsewhere for support they can’t find internally.

Employers who redesign benefits for flexibility and relevance see measurable improvements in engagement scores and performance, critical when productivity remains under pressure.

How HR leaders can get it right

Modernizing benefits calls for a steady shift, listening, testing, evolving and aligning with business goals.

• Understand personas and life stages: Design benefits that flex with different needs, from early-career professionals to mid-career parents and late-career employees caring for family.
• Leverage technology and data: Use insights to personalize offerings at scale and monitor what matters most to different segments.
• Co-create with employees: Build a culture of feedback and engagement. Use surveys, internal networks and pilot programs to ensure benefits stay relevant.
• Invest in communication and advocacy: Market benefits as purposefully as products or services. Replace generic brochures with targeted campaigns that highlight real, practical value.
• Make managers your champions: Train them to connect employees to available support. A Gallup study shows managers trained in science-backed coaching practices see their teams’ engagement improve by up to 18%, with manager performance rising by 20% to 28%. When leaders are equipped to communicate and champion benefits, take-up and impact increase significantly.
• Keep change manageable: Small steps matter. Programs that promote downtime, encourage movement and support mental well-being don’t always require big budgets but can yield measurable returns. Social connections, financial literacy and wellness webinars can also activate positive change.
• Tie personalization to outcomes: Show how every flexible benefit aligns to higher engagement, lower attrition and better performance, and track results that make the ROI clear to leadership.
• Finally, benefits must evolve alongside workforce expectations. HR leaders who build disciplined change management into benefit redesign, with clear messaging, visible leadership buy-in and consistent engagement, see stronger results.

The future of work demands personalization

The world of work will keep evolving, with human connection remaining at its core. Personalized, flexible benefits are a proven driver of engagement and retention for organizations.

The moment to act is today. Reimagine benefits as a key pillar of culture, connection, and competitive advantage. The organizations that do so, will lead the way toward a more engaged, loyal, and resilient workforce in 2025 and beyond.

Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of the organization.

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