In late January, we launched a series of articles exploring trends shaping employee benefits in 2025. Our previous articles covered public policy changes , remote work monitoring,  and the growing affordability crisis - major concerns for both employers and employees.

With economic volatility and tariff threats becoming daily-and even hourly-news stories, organizations must prove every dollar is well spent. In this final instalment, we focus on how small businesses can leverage data analytics to optimize their employee benefits strategy and strike a better balance between cost control and employee satisfaction.

Why Data Analytics is Essential for Small Business Employee Benefits in 2025?

As small businesses face mounting pressure to offer competitive benefits while controlling costs, data analytics is emerging as a powerful tool to guide benefits decisions. From analyzing utilization rates to benchmarking against industry standards, data-driven insights can help employers tailor their benefits offerings to match employee needs, maximize ROI, and maintain cost-efficiency in a challenging economic climate.

What Are Ancillary Employee Benefits and Why Do They Matter?

Ancillary products refer to additional employee benefits that go beyond traditional health and dental plans. These include services like Employee Assistance Programs (EAPs), telemedicine, virtual care, wellness initiatives, and enhanced disability coverage. As employee expectations evolve, particularly in remote and hybrid work environments, ancillary benefits are becoming essential for attracting and retaining talent.

However, offering all these products can be costly. That’s why small business employers must carefully monitor benefits utilization data to prioritize the offerings that provide the greatest value.

How Data Analytics Helps Small Businesses Optimize Employee Benefits?

Monitor Utilization and Employee Preferences

To maximize the effectiveness of employee benefits, small businesses should:

• Analyze usage data of EAPs, virtual care, and wellness programs to determine which services employees engage with the most.
• Regularly survey employees about their satisfaction with the available benefits to ensure they align with actual workforce needs.
• Assess cost vs. value: If a benefit is underutilized, reallocating resources to more impactful programs can improve both employee satisfaction and cost efficiency.

Use Absence and Disability Data to Spot Trends

Absenteeism and disability claims are significant cost drivers for employers. By tracking trends over time, small businesses can detect potential issues early and take proactive action.

• Track short-term and long-term disability claims to identify workplace stressors or health issues.
• Compare absenteeism rates to industry benchmarks to evaluate how well their current programs are supporting employee health.
• Consider enhancing mental health support or ergonomic workplace adjustments if disability rates are high.

Leveraging Data to Improve Retirement Benefits for Employees

Retirement plans are a crucial part of a comprehensive employee benefits package, yet many employees fail to maximize employer contributions or participate in voluntary savings programs. Data can help small business owners optimize retirement plan design and communication.

• Analyze contribution rates: Determine what percentage of employees are taking full advantage of employer-matching contributions.
• Track enrollment trends to identify which demographic groups are under-participating.
• Survey employees to understand their financial concerns and tailor financial wellness programs to their needs.

Data-Driven Insights to Manage Health and Dental Benefits Costs

Health and dental plans are among the most expensive components of employee benefits packages for small businesses. By using claims data analytics, employers can refine plan designs to better match employee needs and control rising costs.

• Assess Spending Account Viability: If traditional coverage is underutilized, switching to a health spending account (HSA) may offer employees greater flexibility.
• Explore Modular Plans: Offering customizable, modular plans can help small businesses balance cost control with employee choice.
• Benchmark Utilization Data: Comparing benefits utilization rates to industry data can highlight gaps or opportunities to adjust plan offerings.
• Survey employees during onboarding and offboarding to gather feedback on the benefits package at critical career stages.

Building a Cost-Efficient Employee Benefits Strategy with Data Analytics

With economic uncertainty, including rising healthcare costs and ongoing inflation, small businesses must adopt data-driven strategies to maintain competitive benefits while controlling expenses.

• Predict Plan Renewal Costs: Analyzing historical claims data helps forecast future costs and anticipate budget pressures.
• Optimize Plan Design: Use data insights to identify cost drivers and adjust plan features such as formularies, dispensing fee caps, or dental recall limits.
• Enhance Employee Satisfaction: When benefits align with real employee needs, employee satisfaction and retention improve—reducing costly turnover.

Why Data-Driven Employee Benefits Strategies Are Essential for Small Businesses?

For small businesses, offering the right mix of employee benefits is a delicate balance between cost and value. By adopting data analytics tools, employers can make smarter, evidence-based decisions that enhance plan utilization, improve employee satisfaction, and control costs effectively.

In 2025 and beyond, data-driven employee benefits strategies will no longer be optional for small businesses-they will be essential to maintaining a competitive advantage in attracting and retaining top talent.

Tired of guesswork? AGA experts can help you in sorting out the appropriate data, analyze it and provide recommendations on how to get the most out of your benefit plans. We are here to help you deliver the best of people and technology!