A new report released today has warned of a growing gap between employers and employees when it comes to the provision of healthcare.

Broking group Howden has released its latest study which found more than two thirds (67%) of businesses are investing in preventative healthcare to tackle soaring medical inflation.

The report, the Changing Face of Employee Health, analysed data from insurers, employers, and employees from key regions around the world.

This comes as health increasingly emerges as a top priority for employees. More than three in five (61%) are now more likely to stay with an employer who offers a good healthcare package, and nearly half (47%) view it as an important factor in looking for a new role. Only 7% of global workers do not think it is an important benefit.

The broker said it emphasises the need for businesses to address their healthcare offering, but this is challenging to navigate in a high cost environment. As a result, employers are increasingly taking steps to mitigate rising costs, with the majority investing in prevention and wellbeing. 67% of employers globally have utilised this strategy, and 55% also listed it as being the strategy which has worked best for them, which is largely mirrored across the world.

Medical inflation is driving this investment. With Howden predicting from its insurer data that medical inflation will reach 7% in 2026 – net of CPI, meaning total inflation will be well over 10% – this is going to have a profound impact on employers, leading many to restrategise and rethink their provisions. As a result, businesses are shaking up health plans despite feeling that they are already getting a good deal.

While the vast majority of employers believe their current healthcare plans meet the needs of their staff, a quarter (25%) of employees do not agree that their employer supports their wellbeing, highlighting a substantial gap – and while investment plans may be working, there is scope for improvement as a significant number of employees are yet to feel the benefit.

Glenn Thomas, CEO and global practice leader of Health & Employee Benefits at Howden, explained: “The findings show how quickly the world is shifting, with AI, new treatments and rising costs reshaping the health and benefits landscape. Employers are feeling the pressure. If organisations don’t recognise their people as their greatest asset and address people risks directly, productivity and growth will suffer. A healthy workforce is now the engine of performance.

“What stands out in the data is the gap between what employers believe they’re delivering and what employees say they’re receiving. Healthcare benefits are becoming non-negotiable for talent, yet many workers still feel their needs aren’t being met. It’s no surprise that so many businesses are now looking at substantial changes.

“Leaders can’t afford to wait. The pressures highlighted in this report show just how fast things are moving. Benefits must be both cost-effective and genuinely fit for their people.”

The report also highlighted a discrepancy between what employers are planning to do against how they feel their current plans are working. The majority of global employers (86%) believe they are getting a good return on investment (ROI) from their private healthcare outlay, and 93% of global employers also believe their current health plan meets the needs of employees.

“This provides an interesting disparity against potential changes employers have already made, or are planning to make,” the report continued. “Nearly a quarter (23%) of employers have already switched healthcare providers to get a better deal and 39% are planning to do so, while 26% have not yet made plans to switch – but would consider doing so if they get a better deal.”

In response to the report Charlotte O’Brien, head of employee benefits at MetLife UK, said: “The value of prevention tools in the workplace cannot be understated. That’s particularly true in an environment where more employees than ever are out of work due to ill-health – something that the Government’s Keep Britain Working Review predicts to increase if no decisive action is taken.

“Howden’s report shows encouraging numbers when it comes to businesses investing in preventative healthcare and the employees’ response. Our own research has shown that having preventative tools in place not only helps reduce absenteeism, but also increases productivity, improves company culture and morale, and enhances employee engagement. All things that not only reflect positively on employers, but the wider economy too.

“Ultimately, long-term sickness can cause significant difficulties for businesses of any size. While we can’t prevent sickness and absence altogether, prevention services can help employees in feeling supported and cared for in the workplace. In turn, this can help businesses in keeping productivity levels up, reducing absenteeism, and lower healthcare costs as an employer.”

The uplift in investment comes as 93% of global employers expect their medical costs to rise, and 41% anticipate a significant rise. While this is a major consideration across the globe, it is impacting regions differently. For example, businesses in IMEA expect medical costs to rise by 58%, compared to 27% for those in Europe (not including the UK at 28%).

Health increasingly emerges as a top priority for employees. More than three in five (61%) are now more likely to stay with an employer who offers a good healthcare package, and nearly half (47%) view it as an important factor in looking for a new role.