A Data-Driven Approach to Better Workforce Decisions

A Data-Driven Approach to Better Workforce Decisions
Aon Insights Series UK

09 of 13

This insight is part 09 of 13 in this Collection.

July 9, 2025 9 mins

A Data-Driven Approach to Better Workforce Decisions

Building a compensation and benefits strategy that’s relevant to your entire workforce.

To remain attractive as an employer, companies should provide an Employee Value Proposition that attracts and retains talent while making the best use of finite financial resources. Spend on compensation and benefits — your biggest employee cost — should be tailored for relevance across the workforce. How each employee feels about their package — and how well they “fit’” with their job and your company — are significant factors in retention and performance.

Analytics can be used to cut through this complexity. To show the relative impact between absolute spend, employee sentiment and person-job fit, analytics can help you answer the question: “For every £1 invested in your people, where do you get the greatest return for your business?”

Image

Introduction

Business and HR leaders continue to battle serious market challenges. Workforce costs are relentlessly rising, employee health is at a post-pandemic low and you have multiple demographic, regulatory and competitive issues to address.

As you face into these challenges, your approach to Total Rewards and your Employee Value Proposition (EVP) is key. You need to make the right decisions for your employees and your business within available budgets; and must continually adapt to changing demands and circumstances year after year.

So how do you know which decisions and actions will drive the optimal results? Do you have access to the data you need to provide insight and evidence to de-risk your choices? Can you predict how your decisions today will drive the outcomes of tomorrow?


Market Challenges:

Corporate Goals:

Use of Analytics:
  • Wage costs rising
  • Benefit costs increasing
  • Sickness absence growing
  • Workforce needs and expectations diverging
  • Pay transparency, fairness and equity becoming mandatory
  • Competition for talent increasing
  • Pace of change accelerating
  • Balance spend vs return
  • Improve employee health and wellbeing
  • Provide a meaningful EVP across all segments of the workforce
  • Offer the right packages to attract top talent
  • Drive engagement, performance and retention
  • Improve transparency and fairness of reward
  • Do you have all the facts you need at your fingertips?
  • Are you using robust insights, benchmarks and tools to support your decision-making?
  • Can you predict the future results of today’s decisions?
  • Can you track the impact of your decisions?
  • Are you able to learn, adapt and continually improve the impact of your EVP policies, practices and investments?

The Macro Question

In every sector, employee spend is one of the most significant expenses – ranging from 20 percent – 40 percent of operating costs in manufacturing, to 70 percent or more in service industries. Reliable insights and robust governance to allocate and optimise workforce costs are essential, yet the measurement of return on investment in people is considered hard to quantify and too often overlooked.

To unpack this equation, companies should start with the four areas of greatest significance: Compensation, Benefits, Person-Job Fit and Employee Sentiment.

For every £1 invested in your people, where do you get the greatest return for your business?

For every £1 invested in your people, where do you get the greatest return for your business?

Better Decisions On Your Most Significant Spend

Compensation and Benefits are consistently the biggest employee cost and the most significant factor in an employee’s decision to join and stay with any company.

Top 5 Most Influential Characteristics Attracting Employees

  • 47%

    Provides better than average pay & meaningful benefits

  • 21%

    Is a fun place to work

  • 20%

    Is a strong fit with values

  • 18%

    Provides support for my wellbeing

  • 17%

    Offers flexible working

With finite budgets to allocate and a diverse workforce to motivate and engage, your decisions on compensation and benefit spend are critical. But how do you know which factors are most impactful?

  • Where does your total spend on compensation and benefit improve employee retention and performance?
  • For which segments of your workforce is your market position on reward the most meaningful factor?
  • Which components of your employee value proposition have the greatest significance for which employees?
  • What would any change in package most likely achieve in terms of employee behaviours?
  • Where is satisfaction with your EVP greatest and least – and what can you do to improve this?

Benchmarking is Key

Reward professionals rely heavily on benchmarking when allocating compensation spend. Valid and reliable benchmark data is crucial to ensure market competitiveness, internal equity and fairness, to feed into budget planning and forecasting and to manage your risk and compliance.

But there is more you can do beyond benchmarking to make sure you get the best return on your reward spend.

The Power of Sentiment

Aon’s 2025 Employee Sentiment Study shows it is critical to understand how employees feel about their Total Reward packages. Nearly three-quarters of business decision makers surveyed expressed concerns about rising workforce costs as they strive to balance investment with growth.

Top Employee Expectations

  • 49%

    say employers should support employee wellbeing.

  • 45%

    say employers should help employees save for retirement/long term needs.

  • 37%

    say employers should support women's health (e.g., menstruation, menopause).

  • 37%

    say employers should provide financial education.

  • 36%

    say employers should support with childcare.

Benefits and Wellbeing

Amid rising healthcare and benefits costs, organizations are in a battle to keep their benefit plans affordable without jeopardizing employee satisfaction. The right data and insight can provide employers with the information and guidance they need to optimize benefits investments, improve employee health outcomes and attract talent in an increasingly tight job market.

Designing an employee value proposition that meets multigenerational needs is critical to widening the pool of available talent, particularly as life expectancy increases and people are working longer. By understanding the common needs and desires of each generation, businesses can tailor plans and communication strategies that resonate with distinct groups in a much more targeted way.

Top 5 Valued Benefits by Generation
Top 5 Valued Benefits by Generation

As well as meeting the unique needs of your workforce, personalized benefits also demonstrate a meaningful commitment to employee wellbeing that can be a compelling motivator to both current employees and potential hires. But just as critically, they help organizations to optimize their spend, avoiding the financial drain of services that aren’t of use or appealing to your workforce.

  • 42%

    of employees say they are willing to sacrifice pay in favor of better benefits.

  • 63%

    of employees say they are willing to sacrifice existing benefits in favor of better choices in benefits.

A data-led approach to optimising your Benefits portfolio makes a direct impact on return on investment. Data on employee demographics can be used to predict health risks and healthcare claim costs, allowing you to target interventions that will improve employee wellness, reduce absence and enhance overall performance and productivity.

Addressing the Human Factor – Person/Job Fit

So far, we have looked at Total Reward and how this drives employee attraction, retention and performance – and how important it is to understand the relationship between compensation and benefit spend vs employee sentiment.

Another critical factor is Person-Job Fit — or how well-suited any employee is to their role, colleagues and company overall. Fit, like sentiment, can be a significant predictor of employee retention and performance; and of any applicant’s likelihood to succeed if hired.

There are many ways to evaluate applicants and employees in terms of fit – though some methods like unstructured interviews risk subjectivity and bias.

The most scientifically valid approaches rely on psychometric assessments — standardised tests designed to measure a person’s capabilities, traits and preferences. The analytics within assessment tests often use data from millions of employees to ensure they are valid predictors of any employee’s performance.

Some look at individual traits such as personality or ability, while others introduce analytics to specific parts of the employee lifecycle such as interviews and candidate feedback.

Assessment Tools are a powerful way to understand employee drivers and preferences and predict employee behaviours. As part of a holistic approach to any employee value proposition, pre-hire and post-hire assessment tools add value across the employee life cycle:

  • Sourcing: Attraction and screening
  • Selecting: Behavioural, Cognitive and Cultural Fit
  • Developing: leadership, technical and interpersonal skills
  • Retaining: identify hidden potential, target interventions and accelerate career progression

Psychometric assessments can tell us what people value: whether they are status-oriented or financially motivated for example. Large volumes of assessment data can also highlight “norm groups” – populations in the workforce more likely to value components of any reward package or EVP.

Conclusion

Effective use of data and analytics can enable you to:

  • Optimise the balance and effectiveness of spend on compensation and benefits – your single biggest employee cost
  • Improve the fairness and transparency of reward in line with emerging Pay Transparency regulations
  • Improve employee wellbeing and engagement and reduce days lost to absence
  • Ensure your Employee Value Proposition is positively perceived across all sections of your workforce
  • Drive measurable and tangible improvements in employee attraction, retention, performance and business results overall.

HR and business leaders should seek to drive greater value from the data they already hold and partner wisely to access broader market data and specialist insights. There will always be a delicate trade-off between hard financial measures and employee preferences and perceptions, but smart analysis across these factors can hold the key to maximising return on investment in people.

Simon Haines
Partner, Head of Talent Analytics EMEA

This article is current as of May 2025.

While care has been taken in the production of this document, Aon does not warrant, represent or guarantee the accuracy, adequacy, completeness or fitness for any purpose of the document or any part of it and can accept no liability for any loss incurred in any way by any person who may rely on it. Any recipient shall be responsible for the use to which it puts this document. This document has been compiled using information available to us up to its date of publication and is subject to any qualifications made in the document.

General Disclaimer

This document is not intended to address any specific situation or to provide legal, regulatory, financial, or other advice. While care has been taken in the production of this document, Aon does not warrant, represent or guarantee the accuracy, adequacy, completeness or fitness for any purpose of the document or any part of it and can accept no liability for any loss incurred in any way by any person who may rely on it. Any recipient shall be responsible for the use to which it puts this document. This document has been compiled using information available to us up to its date of publication and is subject to any qualifications made in the document.

Terms of Use

The contents herein may not be reproduced, reused, reprinted or redistributed without the expressed written consent of Aon, unless otherwise authorized by Aon. To use information contained herein, please write to our team.

2025 Employee Sentiment Study

2025 Employee Sentiment Study

Understand the deeper dynamics of today’s workforce to maintain a pipeline of adaptable, engaged and ambitious talent that helps achieve your business goals.

Download Report and Audiobook

Aon's Better Being Podcast

Our Better Being podcast series, hosted by Aon Chief Wellbeing Officer Rachel Fellowes, explores wellbeing strategies and resilience. This season we cover human sustainability, kindness in the workplace, how to measure wellbeing, managing grief and more.

Aon Insights Series Asia

Expert Views on Today's Risk Capital and Human Capital Issues

Aon Insights Series Pacific

Expert Views on Today's Risk Capital and Human Capital Issues

Aon Insights Series UK

Expert Views on Today's Risk Capital and Human Capital Issues

Client Trends 2025

Better Decisions Across Interconnected Risk and People Issues.

Construction and Infrastructure

The construction industry is under pressure from interconnected risks and notable macroeconomic developments. Learn how your organization can benefit from construction insurance and risk management.

Cyber Labs

Stay in the loop on today's most pressing cyber security matters.

Cyber Resilience

Our Cyber Resilience collection gives you access to Aon’s latest insights on the evolving landscape of cyber threats and risk mitigation measures. Reach out to our experts to discuss how to make the right decisions to strengthen your organization’s cyber resilience.

Employee Wellbeing

Our Employee Wellbeing collection gives you access to the latest insights from Aon's human capital team. You can also reach out to the team at any time for assistance with your employee wellbeing needs.

Environmental, Social and Governance Insights

Explore Aon's latest environmental social and governance (ESG) insights.

Q4 2023 Global Insurance Market Insights

Our Global Insurance Market Insights highlight insurance market trends across pricing, capacity, underwriting, limits, deductibles and coverages.

Global Risk Management Survey

Better Decisions Across Interconnected Risk and People Issues.

Regional Results

How do the top risks on business leaders’ minds differ by region and how can these risks be mitigated? Explore the regional results to learn more.

Top 10 Global Risks

Trade, technology, weather and workforce stability are the central forces in today’s risk landscape.

Industry Insights

These industry-specific articles explore the top risks, their underlying drivers and the actions leaders are taking to build resilience.

Human Capital Analytics

Our Human Capital Analytics collection gives you access to the latest insights from Aon's human capital team. Contact us to learn how Aon’s analytics capabilities helps organizations make better workforce decisions.

Human Capital Quarterly Insights Briefs

Read our collection of human capital articles that explore in depth hot topics for HR and risk professionals, including using data and analytics to measure total rewards programs, how HR and finance can better partner and the impact AI will have on the workforce.

Insights for HR

Explore our hand-picked insights for human resources professionals.

Workforce

Our Workforce Collection provides access to the latest insights from Aon’s Human Capital team on topics ranging from health and benefits, retirement and talent practices. You can reach out to our team at any time to learn how we can help address emerging workforce challenges.

Mergers and Acquisitions

Our Mergers and Acquisitions (M&A) collection gives you access to the latest insights from Aon's thought leaders to help dealmakers make better decisions. Explore our latest insights and reach out to the team at any time for assistance with transaction challenges and opportunities.

Natural Resources and Energy Transition

The challenges in adopting renewable energy are changing with technological advancements, increasing market competition and numerous financial support mechanisms. Learn how your organization can benefit from our renewables solutions. 

Navigating Volatility

How do businesses navigate their way through new forms of volatility and make decisions that protect and grow their organizations?

Parametric Insurance

Our Parametric Insurance Collection provides ways your organization can benefit from this simple, straightforward and fast-paying risk transfer solution. Reach out to learn how we can help you make better decisions to manage your catastrophe exposures and near-term volatility.

Pay Transparency and Equity

Our Pay Transparency and Equity collection gives you access to the latest insights from Aon's human capital team on topics ranging from pay equity to diversity, equity and inclusion. Contact us to learn how we can help your organization address these issues.

Property Risk Management

Forecasters are predicting an extremely active 2024 Atlantic hurricane season. Take measures to build resilience to mitigate risk for hurricane-prone properties.

Technology

Our Technology Collection provides access to the latest insights from Aon's thought leaders on navigating the evolving risks and opportunities of technology. Reach out to the team to learn how we can help you use technology to make better decisions for the future.

Trade

Our Trade Collection gives you access to the latest insights from Aon's thought leaders on navigating the evolving risks and opportunities for international business. Reach out to our team to understand how to make better decisions around macro trends and why they matter to businesses.

Transaction Solutions Global Claims Study

Better Decisions Across Interconnected Risk and People Issues.

Weather

With a changing climate, organizations in all sectors will need to protect their people and physical assets, reduce their carbon footprint, and invest in new solutions to thrive. Our Weather Collection provides you with critical insights to be prepared.

Workforce Resilience

Our Workforce Resilience collection gives you access to the latest insights from Aon's Human Capital team. You can reach out to the team at any time for questions about how we can assess gaps and help build a more resilience workforce.

More Like This

View All
  • Why Economic Slowdown is an Ongoing Risk for Organizations

    Article 6 mins

    Why Economic Slowdown is an Ongoing Risk for Organizations

    Economic slowdown ranks as the number three global risk in 2025 — and is projected to rise to number two by 2028. Amid trade tensions, inflation and geopolitical instability, organizations must strengthen liquidity, enhance workforce agility and rethink capital strategies to stay resilient.

  • Client Trends 2025

    Article 11 mins

    In Conversation with Iberdrola: Navigating Megatrends

    Spanish energy multinational, Iberdrola – a leader in grids, storage and clean energy – talks with Aon about its efforts to adapt and respond to climate impacts through its shift towards renewables and building a workforce for the future.

  • Using Climate Data to Protect Employee Health

    Article 8 mins

    Using Climate Data to Protect Employee Health

    Employers are increasingly looking to defend the health and safety of their employees in a changing climate. By modeling the impact of weather on employees like they do for physical risks, employers can proactively establish solutions to protect workers.

View All
Subscribe CTA Banner