Employee benefits trends in Australia 2025

Technology investments are accelerating with the goal of enhancing company performance, but productivity is failing to keep pace. As Australian business leaders confront this gap, could employee benefits be the missing link between performance and productivity?

Mercer’s 2025 Australian Benefits Review (ABR) uncovers compelling insights: 97% of employers offer health and wellbeing programs, with financial wellness initiatives surging to 33% – nearly doubling since 2023. With employees spending an average of six work hours each month distracted by financial worries¹, addressing this stress is not just compassionate – it’s a strategic imperative to enhance focus and productivity.

"Wellbeing benefits are no longer just additional perks — they are vital for creating a healthy, resilient, and positive work environment, and essential for building a sustainable and engaged workforce," says Nithya Abraham, Mercer's General Market Leader, Digital & Insights.

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The report also highlights a growing recognition of total rewards strategies, with nearly half of employers (46%) adopting a formal strategy for total rewards, up from 42% in 2022. However, 58% still rely on one-size-fits-all rewards, missing the mark on personalisation. In today’s multigenerational workforce, tailoring benefits to diverse employee needs isn’t optional – it’s essential to maximise engagement and drive productivity.

"A one-size-fits-all benefits package in a five-generation workforce isn’t just inefficient, it’s a clear disconnect. It signals that we see employees as a collective, not as the unique individuals we’re asking them to be at work," notes Don Barrera, Mercer's Client Engagement Manager, General Market, Digital & Insights.

Employee Benefits FAQ

Employee benefits are additional forms of compensation and incentives – financial or otherwise – that go beyond legal requirements. They help improve work-life balance, enhance job satisfaction and work experience, and boost overall quality of life for employees. Beyond compliance, benefits are powerful tools for strengthening employer branding, attracting top talent, and increasing employee retention and motivation.

Employee benefits that focus on holistic wellbeing – such as mental health support, flexible work options and financial wellness programs – help reduce stress and increase focus. By addressing employees’ physical, emotional, and financial needs, organisations create a more engaged and productive workforce. Integrating these benefits into a strong Employee Value Proposition (EVP) not only supports employee wellbeing but also clearly communicates the organisation’s commitment to a culture of care. Mercer’s data-driven approach helps align with your EVP and employee benefits, and directly impacts productivity outcomes

The evolving demographics of the Australian workforce have deep implications for employee benefits. Personalising total rewards means understanding the unique preferences and life stages of different employee groups – from Gen Z to Baby Boomers. This can include flexible benefits, targeted recognition, and tailored career development opportunities. Mercer’s segmentation and analytics tools enable HR leaders to design and optimise their total rewards programs so that they resonate across generations, driving higher satisfaction and retention.

Measuring benefits impact involves tracking key metrics such as employee engagement scores, absenteeism rates, productivity levels and turnover. Mercer’s advanced analytics, benchmarking and listening tools provide HR leaders with actionable insights to quantify the ROI of benefits programs and continuously optimise their strategies for better business outcomes.

Rather than relying solely on annual surveys, a continuous listening approach is recommended. Regular pulse surveys, targeted 'moments that matter' feedback and digital focus groups provide timely insights into employee needs and preferences. This adaptive, ongoing listening strategy helps HR leaders respond quickly to emerging concerns, track progress over time and maintain meaningful dialogue with employees – ultimately driving higher engagement and productivity. Backed by Mercer’s extensive global normative database and deep HR expertise, Mercer employee listening solutions help HR leaders uncover what truly matters to employees, identify gaps between employee perceptions and behaviours, and generate actionable insights. 

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Employee benefits trends in Australia 2025

Technology investments are accelerating with the goal of enhancing company performance, but productivity is failing to keep pace. As Australian business leaders confront this gap, could employee benefits be the missing link between performance and productivity?

About the Australian Benefits Review

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Employee Benefits FAQ

1. What are employee benefits and why are they important?

2. How can employee benefits be designed to improve productivity and reduce workplace stress?

3. How can total rewards strategies be personalised to meet the needs of a multigenerational workforce?

4. How can HR leaders measure the impact of employee benefits on business performance?

5. How often should I run employee surveys to inform benefits strategy?

Download the latest employee benefits trends summary from the Australian Benefits Review (ABR) 2025