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US employers are rewriting the rules of benefits strategy, with cost control now the defining priority shaping decision making says new research.
The data from insurance specialist Lockton, shows a decisive shift away from talent-led thinking toward a more hard-edged approach focused on managing healthcare spend.
It reveals an increased openness to unconventional solutions, with some 46% of self-funded plan sponsors say they would consider international drug sourcing for pharmacy benefits, showing just how far organizations are willing to go to rein in rising costs.
It’s a more complex approach and carries potential legal and compliance risks, but the lack of clear regulatory enforcement appears to be lowering the barrier to consideration.
It is part of a broader re-assessment of employer priorities, where reducing costs has become the dominant concern.
Turning workforce data into early warnings for high-cost employees
Some 54% of employers now identify cost reduction as the most important factor shaping benefits decisions, up from 38% in 2025. In contrast, attracting and retaining talent has dropped to 19%, marking a sharp reversal from recent years when it rivaled cost as the top driver.
Shannon Demaree, Executive Vice President, People Solutions Regional Executive at Lockton, said: “With projected cost trends, employers face sustained challenges heading into 2027 and beyond, as the imperative to reduce costs is increasingly dominant.”
As hiring pressure eases, employers appear more willing to recalibrate the balance between cost and competitiveness. Demaree added: “With the labor market softening, priority on attracting and retaining talent plummeted from 44% in 2023 to just 19% in 2026, how plan sponsors are thinking has decidedly shifted.”
Benefits strategy shifts to cost control
Instead of converging on a single solution, however, organizations are spreading their bets across multiple cost management strategies, testing different levers to find sustainable savings.
Among self-funded plan sponsors, several approaches are already gaining traction, with 39% leveraging narrow or high-performing provider networks, while 30% are offering cardiometabolic management programs beyond standard medical coverage to reduce high-cost claims. Eligibility changes are also in play, with 23% applying spousal surcharges.
Pharmacy benefits remain a key battleground. While only 7% currently use international sourcing, the much larger proportion considering it suggests that more disruptive strategies are moving into the mainstream conversation.
Employers are not just cutting costs, they are weighing trade-offs between savings, disruption, and compliance risk.
Balancing cost reduction with employee impact
Even as cost control takes center stage, employee experience has not disappeared from the equation. Some 81% of employers say employee impact remains an important consideration when evaluating benefits changes.
Chris Bartnik, Senior Vice President, People Solutions Growth and Innovation Leader at Lockton, commented: “The challenge for employers is not simply cutting spend, it’s finding sustainable ways to manage cost while maintaining a competitive and meaningful benefits offering.”
Employers are being pushed to rethink their role in the healthcare landscape, moving beyond incremental adjustments toward more structural changes in how benefits are designed and delivered.
“It’s a lot,” Demaree added, “organizations are grappling with cost-management strategies, striving to maintain employee experiences, ensure quality care accessibility, and limit disruptions.”
Right now, employers are seemingly navigating rising healthcare costs with no clear consensus on the best path forward, testing a range of strategies while trying to preserve trust and value for employees.
Benefits strategy is no longer anchored primarily in talent competition, but is instead being reshaped by cost realities, with organizations forced to make more difficult trade-offs about what they offer, how they offer it, and what employees can expect in return.
