The increased competition among employers to hire and retain talent drives the employee benefits category’s growth

Employee Benefits Category - Procurement Intelligence

The employee benefits market is expected to grow at a CAGR of 4.5% from 2024 to 2030. North America accounts for the largest share of the category. The increased competition among employers to hire and retain talent along with increasing focus on maintaining work-life balance among employees are driving category growth. Major corporations are employing various strategies, such as mergers and acquisitions, strategic partnerships and contracts, and the development, testing, and release of new products. For instance, in August 2023, TA Associates and Warburg Pincus to expand its role as a pan-European leader in digital employee benefits solutions purchased Epassi Group, a provider of employee benefits.

Companies often provide employees with lunch and breakfast coupons so they may easily purchase meal packages. Employee meal cards will be in demand because of this aspect. Additionally, the prevalence of job-hopping is rising, which is driving up demand for goods like meal cards and employee benefits programs. This is explained by the ability of these solutions to raise staff productivity and happiness, which in turn improves a business' retention rate. The demand for these services would increase as a result of firms focusing more on such benefits to enhance the well-being of their employees due to the rising attrition rate.

Companies are continuously focusing on collaborating or commencing their own services. For instance,

• In June 2023, with the purchase of Benefits, an employee benefits advisory firm, together with the company's brokerage and consulting operations, Aon announced the development of the firm's Health Solutions capabilities in Chile. The acquisition considerably increases Aon's client base and the services already being offered by the company in Chile.

• In June 2023, Willis Towers Watson announced a partnership with Clyde & Co. To assist customers in navigating the fast-changing climate risk and liability landscape, the collaboration will employ the organizations' experience and in-depth knowledge of critical climate concerns.

• In April 2023, Mercer announced BT Super’s integration into the Mercer Super Trust. Additionally, Mercer disclosed that it had acquired Advance Asset Management Limited, further enhancing its position as Australia's top investment multi-manager and growing its retirement offerings.

• In August 2021, Up Group purchased Leeto to improve its offerings by adding a complementary digital service to its current offerings, including a platform that enables employees to access their benefits.

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Employee Benefits Sourcing Intelligence Highlights

• The global employee benefits category is fragmented, because of the presence of several large and minor companies operating both domestically and internationally. To strengthen their customer base, these businesses engage in collaborations, mergers and acquisitions, and new product releases.

• The bargaining power of buyers of employee benefits is high due to a few factors. First, there are many major suppliers in this category, giving buyers more power in negotiations. Second, switching from one provider to another is easy, meaning buyers are not locked into any one provider. Third, products and services offered by employee benefit providers are relatively standardized. This means that buyers have more options to choose from.

• In this industry, salaries are the largest cost component followed by platforms and technology needed to support the professionals.

• Vendors in this category offer services from wellness programs, concierge services, retirement planning, and others.

Employee Benefits Procurement Intelligence Report Coverage

Grand View Research will cover the following aspects in the report:

• Market Intelligence along with emerging technology and regulatory landscape

• Market estimates and forecasts from 2022 to 2030

• Growth opportunities, trends, and driver analysis

• Supply chain analysis, supplier analysis with supplier ranking and positioning matrix, supplier’s recent developments

• Porter’s 5 forces

• Pricing and cost analysis, price trends, commodity price forecasting, cost structures, pricing model analysis, supply and demand analysis

• Engagement and operating models, KPI, and SLA elements

• LCC/BCC analysis and negotiation strategies

• Peer benchmarking and product analysis

• Market report in PDF, Excel, and PPT and online dashboard versions 

Cost Intelligence Highlights

Grand View Research has identified the following key cost components for the employee benefits category:

• Salaries of consultants’/program professionals

• Analytics, Audits, and Benchmarking Tools/Technology

• Compliance, Legal, and Regulatory Cost

• Infrastructure and Marketing

• Utilities and Tax

• Others

Salaries and technology form the largest cost components of the employee benefits category.

List of Key Suppliers in the Employee Benefits Category

• Aon Hewitt

• Mercer

• Fidelity

• Met Life Inc.

• Aetna Inc.

• Benify

• Wills Tower Watson

• Marsh & McLennan Companies, Inc.

• Gallagher

• Axa Group