Employers have made meaningful strides in expanding benefits in recent years, from IVF and menopause-related care to adoption support. Yet even as the range of offerings increases, the underlying structure of employer benefits has remained largely unchanged: standardized plans, fixed packages and limited flexibility for individual needs. At the same time, workforce expectations are becoming more complex. Employees across generations are navigating different life stages, financial priorities and personal responsibilities. As a result, traditional one-size-fits all models are falling short, leaving many employees underserved or paying for benefits they rarely, if ever, use.
Rather than continuing to layer new offerings onto an outdated framework, a growing number of organizations are rethinking benefits at the foundational level and shifting toward a flexible “build your own benefits” approach. This model gives employees a defined allowance or a set of options they can tailor to their individual priorities, whether that includes traditional healthcare, caregiver support, wellness benefits or less conventional offerings like pet insurance.
This shift reflects a broader reset in total rewards strategy. For HR leaders, the challenge is not simply expanding benefits. It is designing programs that balance personalization with cost control and compliance while maintaining fairness across an increasingly diverse workforce.
The Limits of Traditional Benefits Design
Benefits remain one of the largest investments employers make. According to the U.S. Department of Labor Bureau of Labor Statistics (BLS), employer costs for private industry workers averaged $46.15 per hour worked in December 2025. Of that total, $32.36 went toward wages and salaries, while $13.79 went to benefits, meaning benefits account for roughly 30% of total compensation costs.
Yet despite that level of investment, more than half of employees say they are unsatisfied with their current benefits, pointing to a growing disconnect between what employers offer and what employees actually need.
Much of that disconnect comes down to design. Many programs are still anchored in a narrow definition of benefits, centered on core offerings like health insurance and retirement, rather than reflecting the full range of employee circumstances.
For instance, dual-working parents, mid-career women, caregivers and employees with children often encounter benefits that don’t match their day-to-day realities. Even in households with strong support systems, coordinating work schedules, childcare and other responsibilities can create constant friction. When workplace structures fail to account for that reality, employees are left to bridge the gap on their own.
Over time, this mismatch creates inefficiencies on both sides. Employees often pay for benefits they rarely, if ever, use while lacking access to support that would be more meaningful. Employers, meanwhile, continue investing in offerings that see limited engagement. Without a more flexible approach, organizations risk overinvesting in underutilized benefits and underdelivering on what employees actually need.
What Employees Actually Want: Choice, Relevance, and Inclusion
In response, employees are placing greater emphasis on choice and adaptability in their workplace benefits. Priorities shift over time, whether because of life stage, family responsibilities or personal goals, and employees expect their benefits to keep pace.
That is why flexibility has become so important. Instead of locking employees into predefined packages, HR leaders should be designing benefits systems that allow employees to direct resources toward what matters most to them in the moment – whether that’s caregiving support, mental health resources or another area of need – and to adjust those choices over time. By giving employees more flexibility and control over how benefits are allocated, organizations can create more inclusive programs that serve a broader range of people, not just those who fit traditional models.
To make this work in practice, HR teams need better visibility into what employees truly value. Regular feedback loops play an important role here. Annual or biannual surveys can help identify shifting priorities, while more open channels like HR inboxes or suggestion programs allow employees to share input in real time. Together, these insights help organizations move beyond assumptions and design benefits programs that reflect the realities of their workforce.
The Rise of “Build-Your-Own” Benefits and the Business Case
The “build your own benefits” model puts flexibility and personalization into practice while giving HR leaders a more structured way to address cost and compliance pressures. A common approach includes a defined allowance or benefits “bucket” that employees can use to select the options most relevant to them.
The key shift is moving away from fixed bundles toward modular options that employees can choose and adjust as their needs change. In some cases, employees can also expand beyond that allowance at their own cost, creating more personalization without significantly increasing employer spend.
From a business perspective, this model can also improve efficiency. When benefits align more closely with employee demand, organizations can reduce waste tied to underused programs and ensure that their investment is actually being used.
It also gives employers more predictable cost structures. Defined contribution models allow employers to set clearer spending parameters and still offer a competitive and differentiated benefits experience. That balance matters. HR leaders are under growing pressure to modernize benefits without creating open-ended cost exposure, and a more flexible model can help solve for both.
And the appeal of this approach is not only financial. From a compliance and equity perspective, offering a consistent structure to all employees can support fairness while still allowing for individual choice. In other words, equity does not have to mean identical benefits for everyone. It can mean giving employees equal access to a system that lets them prioritize what is most relevant to their own circumstances.
There is also a clear connection to retention. When employees feel their benefits reflect their actual needs, they are more likely to see those offerings as meaningful rather than transactional – and that can shape how they view their employer more broadly. In fact, 78% of employees say they would consider leaving due to inadequate wellness and benefits, according to Intuit. Organizations that build more relevance and flexibility into benefits strategy will be better positioned not only to support employees, but to keep them.
Looking Ahead
Benefits strategy is shifting from a static offering to a more dynamic, employee-informed system, one that can flex as needs change across life stages, households and career moments. For total rewards leaders, “build your own benefits” is less a perk trend than a structural redesign: shifting spend toward relevance, strengthening inclusion through choice, and creating clearer parameters for cost management and governance. Organizations that listen to employees, regularly reassess needs and build flexibility into their programs are better positioned to close the gap between investment and impact. As workforce expectations continue to evolve, the future of benefits isn’t about offering more. It’s about offering what matters.
Sarah Peterson Herr is a former in-house attorney and employment law nerd with over 10 years of employment law experience. As a legal editor on the Brightmine team, she focuses on employee privacy and compensation and benefits compliance, including health care benefits, health care continuation and retirement benefits. Sarah earned a Bachelor of Science in psychology from Baker University, a Master of Arts in counseling psychology from the University of Kansas and a Juris Doctor from Washburn University.