Gallagher trends report shows how the industry is shifting
Canadian employers are reshaping how they support workers in 2026, moving away from one-size-fits-all benefits toward more flexible, integrated approaches even as rising costs and communication gaps challenge organisations of all sizes.
The key findings of Gallagher’s 2025 Workforce Trends Report Series are based on responses from more than 500 Canadian organisations. Authored by Ezaque Lopes, Gallagher’s chief revenue officer, the report identifies five trends shaping how employers attract, retain, and support their people.
Benefits grow more flexible
Rising health-care costs are prompting employers to move away from full co-insurance coverage, with many covering 80%–85% of costs. Health spending accounts – allowing workers to direct set annual amounts toward their own health needs – are increasingly common.
New drug therapies are adding complexity. GLP-1 medications, used for diabetes and weight management, carry high costs, prompting employers to consider prior authorisation or delayed coverage.
Mental health is also reshaping return-to-work frameworks, originally designed for physical injuries. Well-being days and flexible leave arrangements are emerging to address the unpredictable nature of mental health recovery.
“What we’re seeing in benefits design is a fundamental shift in thinking,” Lopes said. “Cost predictability and employee satisfaction don’t have to compete. Design changes like HSAs and adjusted co-insurance models give organisations both financial control and the flexibility employees need.”
Financial well-being gains ground
Forty per cent of employers surveyed said financial well-being has grown in importance. Retirement savings remain the cornerstone – 92% identified them as the most impactful financial initiative – but offerings are broadening.
Half of employers now provide financial planning or wealth management coaching, and 42% offer financial literacy resources. Only 11% enhanced retirement plans in 2025, with integration into total rewards a leading challenge.
Seventy per cent of employers report their retirement programs meet organisational needs “well” or “very well,” up from 66% in 2024.
“Financial well-being programs are evolving in stages,” Lopes said. “Now we're seeing the next phase: organisations asking how to integrate these programs more strategically into retirement design and total rewards. That’s the competitive advantage for those who get there first.”
Mentorship fills engagement gap
While 60% of employers report a highly engaged workforce, only 48% have a formal engagement strategy. Half now offer mentorship programs, recognising the role of career development alongside compensation.
Pay drives 41% of staff departures, with the rest due to management quality, culture, and career opportunities. Thirty-six per cent of employers say career well-being has grown more important to employees.
“For 2026, the opportunity is in integration, not addition,” Lopes said. “Most employers already have the building blocks – recognition, feedback, training and mentorship. The competitive advantage comes from connecting these into a formal engagement strategy.”
Total rewards communication lags
Only 47% of employers believe they communicate total rewards effectively. Most benefits communication follows a limited cycle: enrolment, selection, then little contact. Only 19% of organisations developed a comprehensive communication strategy.
“For 2026, this represents one of the highest-impact, lowest-cost opportunities available,” Lopes said. “Better communication doesn’t necessarily require more benefits, just helping people understand and use what already exists.”
Inclusion moves into operations
Inclusion initiatives are rising, with 82% of employers implementing programs in 2025, increasing to 92% among large employers. Flexible work is central: 71% offer hybrid arrangements, 27% full location flexibility, and half provide flextime.
“The 2026 focus is clear,” Lopes said. “Organisations that integrate flexible work into their broader inclusion strategy, rather than treating it as a separate benefit, will be better positioned to attract diverse talent and maintain engagement across different work arrangements.”
