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2025 Workforce Insights Guideonedigital.com

2025 Workforce Insights Guide 2Today’s business leaders face a maze of seemingly-contradictory challenges: The worst of ination has passed, yet nancial pressures persist. The once-hot labor market has cooled down, yet businesses are still beset by recruitment and retention issues. The isolation of the COVID-19 pandemic is long over, yet employee engagement and morale remain at rock bottom. However, it is critical that these challenges not result in a crisis of condence or a limiting of ambition. Employers have more information, more freedom of action, and more possibilities ahead of them than ever before. Uncertainty about the future should not act as a straitjacket, but as an incentive to invest resources in intelligent, long-term policymaking. Businesses that commit to such an investment will quickly nd that some problems, such as America’s tumultuous legal landscape, deteriorating insurance marketplaces, and growing cybersecurity threats, are simply too big for employers to solve on their own. In such cases, adaptation and risk mitigation should be prioritized over a search for silver bullets. Challenges surrounding employee morale and wellbeing are much more addressable. With new methods of data collection and sufcient determination, businesses can thoughtfully diagnose their shortcomings, bolster their value propositions, and identify themselves as destination employers. Employers are also facing second-order effects from the deployment of new technologies and healthcare solutions. A future of medical miracles and advanced labor-saving beckons, but so do enormous potential nancial costs. Business leaders should not ght against these trends, but embrace them in a pragmatic and thoughtful manner. In an erratic era that bucks all conventional wisdom, OneDigital’s 2025 Workforce Insights Guide is designed to provide clarity. With it, we hope to provide readers with an informative snapshot of the challenges that employers are currently facing and suggest a framework for thinking big and acting condently in the midst of uncertainty.After the enormous disruptions of the early 2020s, American businesses must learn to think big and act condently in an era of uncertainty.

2025 Workforce Insights Guide 3Table of ContentsUnpacking OneDigital’s National Workforce Survey We Surveyed Thousands of American Workers. Their Priorities are a Reality Check for People Leaders. Innovative Benets: Cost-Conscious Ways to Offer More A Blueprint for Ditching Your Company’s Expensive Health Plan Gene Therapies and GLP-1s: How Should Plan Sponsors Cover these Emerging Medicines? Taking Action for Inclusive Benets and Workplace Accommodations Industry Headwinds: Emerging Challenges for American Employers Regulatory Rumblings: Four Worrying Legal Trends for Employers to Watch Why America’s Property Insurance Market is Unraveling Businesses Are Vulnerable to Increasingly-Sophisticated Cyberattacks What Should Employers do with Articial Intelligence? Employers are Putting the Wrong People in Charge of AI Strategy The Promise of AI-Powered Telehealth Screenings De-Risking Corporate AI: Why Human Oversight Is Still Needed

2025 Workforce Insights Guide 4Unpacking OneDigital’s National Workforce Survey

2025 Workforce Insights Guide 5We Surveyed Thousands of American Workers. Their Priorities are a Reality Check for People Leaders. Employees feel like they are struggling to survive and need nancial support. Is the HR industry’s recent focus on culture and purpose misplaced? In February 2024, OneDigital commissioned the Employee Value Perception Study, which surveyed 2,000 full-time employees throughout the United States. This pool of respondents was selected to be a microcosm of the American workforce as a whole, with participants representing various industries, geographic regions, seniority levels, and job functions. Participant data was also broken down by “life stage,” which weighed factors such as marital status and whether or not participants have children. Every respondent answered more than 80 questions about their current employment experience, their overall wellbeing, and the factors that motivate them most in their professional lives. This generated an enormous amount of data with many meaningful takeaways, some of which proved to be quite surprising to our research team and in-house HR consultants. Here are some of the results that we gleaned from this national survey of America’s workforce: Employees feel nancially overwhelmed and economically defeated. It’s no secret that Americans have been exposed to signicant nancial pressures in recent years. However, the degree of nancial dismay expressed by respondents was quite severe, exposing a major wellbeing challenge that employers must work to address: Financial Stress Levels are Stratospheric 1 in 4respondents are considering taking a loan from their retirement savings accounts. This extremely unwise and heavily-taxed action is usually a sign of true nancial desperation. Remarkably, the proportion of employees considering this seems to increase with seniority – among executive-level respondents, it was a staggering 36%.57%of respondents said they could not handle a major unexpected expense. Among employees of intermediate seniority, fully 7 in 10 say they could not afford a sudden major expense.

2025 Workforce Insights Guide 6These results are especially disheartening because, according to most respondents, they are feeling this pain despite engaging in nancially responsible behaviors: 77% agree that it is important to save for retirement, and 2 in 3 say that they monitor their expenses very carefully and are saving some money from every paycheck they earn. The upshot of all this is clear: workers feel nancially overwhelmed and economically defeated. Many would say that they are struggling just to make it to their next paycheck and feel that they cannot get ahead even when they behave prudently and manage their money responsibly. These feelings of nancial stress do not bode well for employee engagement, morale, or productivity, and they are likely a key reason for the relative lack of concern over things like culture, values, and purpose.1/2of entry-level employees agree with the statement “Because of my debt, I feel like I will never have the things I want in life.” For all respondents surveyed, this gure was 37%. This tracks closely with the 35% who say they are worried about falling behind on debt payments. 44%of respondents say they worry about how their family would be able to nancially support themselves if they were to suddenly die. This proportion does not meaningfully change between different seniority levels, possibly indicating that a large fraction of all households are in a nancially precarious situation. 55%a majority of respondents say that they do not “know exactly where my paycheck will come from when I retire.” Intermediate-level employees were again the most alarming subgroup for this question, with 2 in 3 of them agreeing with the statement above. Even executive-level numbers left something to be desired, with 40% saying that they are unsure of their retirement income source.These feelings of nancial stress do not bode well for employee engagement, morale, or productivity.

2025 Workforce Insights Guide 7You Can’t Eat CultureCultural initiatives are valuable, well-intentioned, and right. But they cannot overshadow your total rewards strategy. Over the last several years, an enormous amount of emphasis has been placed on the role of culture in attracting, retaining, and motivating employees. Corporate leaders and HR departments have sunk signicant resources into promoting cultural priorities such as inclusivity, work-life balance, and mental health awareness. Despite this, the unfortunate reality is that employee engagement is on a steady downward trajectory.1 To get a better understanding of this phenomenon, we asked survey respondents to rank 17 different job traits according to their relative importance. These 17 traits covered a broad swath of topics ranging from compensation, feeling a sense of purpose from one’s work, and access to professional growth opportunities. The ranking was done via a maximum difference scaling methodology, which gave respondents a randomly generated set of traits and asked them to select which ones were the least and most important to them. All in all, our respondents assigned a remarkably low level of importance to the type of intangible cultural priorities that have dominated recent workforce management discourse. The following items all received scores of -10% or lower, indicating a signicant de-prioritization relative to other traits on the list: These results beg the question, has the workforce management industry’s recent emphasis on culture been missing the mark? To assess that possibility, it’s helpful to understand which traits were rated highly: Health and retirement benets were notably among the positively-rated options, consistently ranking in the top tier of traits and scoring +30% or above across most respondent subgroups. Compensation also received a net positive ranking, albeit at a more modest level. Has the workforce management industry’s recent emphasis on culture been missing the mark? Feeling ValuedLeadership SupportOrganizational Culture and ValuesPersonal PurposeInclusivityMeaningful RelationshipsOrganizational PurposeWork-Life Balance

2025 Workforce Insights Guide 8To understand what this might mean, it helps to think of this in the context of Maslow’s famous hierarchy of needs. The hierarchy is typically visualized as a pyramid, with physical needs at the bottom and abstract desires for belonging, purpose, and fulllment at the top. One hypothesis is that the relative de-prioritization of intangible, culture-related items shouldn’t be interpreted as employees saying that they don’t care about those things (is there anybody out there who really doesn’t want work-life balance?). Instead, it should be understood in the context of recent ination, rising healthcare costs, and a cooling job market. Employees who are economically secure have the luxury to place things like inclusivity and purpose at the top of their list. However, for those who feel like they are being eaten alive by rising costs and scared to death that they won’t be able to retire, such concerns are understandably not at the top of their mind.Respondents ranked reputation above all else. When survey respondents were asked to rank various job traits, there was a consistent group of ve traits that performed extremely well across all subgroups. As mentioned above, two of these were healthcare benets and retirement plan benets. Another two were occupied by exibility and autonomy, both of which have historically been popular ingredients in employee value propositions. However, the single highest-scoring trait of all was somewhat surprising: brand/reputation. This trait received a staggering score of +43% across the entire pool of survey respondents and clocked in as high as +54% among some employee subgroups. These gures indicate a remarkably strong desire for something that is not necessarily top-of-mind for most HR professionals and people leaders. Everyone Wants a “Destination Employer” experience inner potential, purpose & meaning SelfActualizationSelf-Esteem NeedsSocial NeedsSafety NeedsPhysiological Needsconfidence, achievement, respect for others, the need to be a unique individualfriendship, family, a sense of connectionhealth, employment, property, family and social abilitybreathing, food, water, shelter, clothing, sleep

2025 Workforce Insights Guide 9The denition of brand/reputation supplied to the employees who participated in the survey was less about an organization’s prestige and more about the presence of publicly-available information suggesting that an employer treats its staff well and is not dysfunctional. This doesn’t mean that you need to be a Google or JPMorgan to attract top talent, but that positive Glassdoor reviews, media coverage, and word-of-mouth about your organization can play an outsized role in recruiting efforts. Here are three non-exhaustive and non-mutually exclusive reasons why jobseekers might place such a great amount of emphasis on reputation when assessing potential employers: 01 Easy Triaging: Looking for a job can be an extremely stressful and overwhelming experience. The modern jobseeker’s journey typically consists of viewing hundreds of listings, scrolling through dozens of company websites, and conducting interviews with several different potential employers. These employers are often broadcasting very similar messages about how great it is to work at their organization, and it can be difcult to gauge how true that is from the outside. It’s possible that part of the perceived value of companies with a stellar brand/reputation is that, at least in theory, they can be quickly triaged as high-quality employers without the need for extensive research. 02 Future Career Prospects: Putting in some time at a top-tier company is never going to look bad on a resume. Employees who rank this trait highly could be thinking of the long-term value it brings by making them more appealing to recruiters, stafng agencies, and hiring managers for the rest of their professional lives. 03 Social Desirability: One shouldn’t underestimate the appeal of being viewed as successful. For better or worse, humans are social creatures that place a large degree of emphasis on status symbols and comparative feelings of accomplishment. Though this is a seemingly trivial concern compared to the nancial wellness issues discussed earlier, it’s possible that many respondents simply feel a desire to associate themselves with a respected and sought- after organization. Participants expressed a near-universal obsession with something that is not necessarily on the radar of most HR professionals.

2025 Workforce Insights Guide 10To summarize, our survey respondents indicated that they are most attracted to employment that offers the following: While there is little overlap or commonality between the three priorities listed above, it is exceedingly rare for a single employer to be able to offer a top-tier experience in all three of these areas at the same time. When a jobseeker evaluates your organization as a potential employer, they’re probably not anticipating a perfect role where they will receive everything they’ve ever wanted. Instead, they’re likely weighing the various traits that you have to offer and asking themselves, “Is this worth it?” Assuming that baseline compensation is acceptable to an applicant, their decision on whether to work at your organization probably hinges on a mental checklist that captures the three priorities listed above. While excelling in all three areas may be challenging, it’s likely that you can maximize one or two of them in order to make yourself as “worth it” as possible. Key TakeawaysHow to Make Your Organization “Worth It” 01High-caliber health and retirement benets that support their nancial wellbeing.Flexibility and autonomy that give them more control over their workday. A brand and reputation that are associated with a positive employee experience. For more information on these topics, access OneDigital’s Employer Value Perception Study

2025 Workforce Insights Guide 11While culture and wellness-related values were ranked low by respondents, we would caution anybody against taking these results at face value for the following reasons: Negative scores do not indicate that surveyed employees do not value something at all, but rather that they value something less than the other given options. These responses are relative, not absolute. The self-reported nature of this data means that it is a representation of what employees say they prioritize, which could be different than what they actually prioritize. For example, one can imagine an employee who currently has a job with a healthy work-life balance within a supportive organization where they have made many meaningful friendships. It’s possible that they take these things for granted today and therefore assign them a low priority, but will sorely miss them when they transition to a new job that lacks such amenities.It’s also worth noting that while employees didn’t directly rate culture and wellness-related items very highly, the items that they care about the most are closely connected to these topics. The clear nancial pain that most respondents are feeling is not just a monetary matter, but a mental health issue that is deeply related to overall wellbeing. The yearning for exibility and autonomy is not just an issue of PTO and remote work policies, but a deep-seated craving to work in a culture where employees are trusted, valued, and empowered. The emphasis on working for an employer with a good brand and reputation doesn’t stem from self-aggrandizement, but from the desire to occupy a role that provides a path for growth and makes one feel a sense of purpose. The importance of purpose was conrmed in a separate portion of the survey that focused specically on what factors play the greatest role in participants’ happiness at work. Among a list of twelve response options, “feeling that my work is meaningful” took the top spot. Organizations that can reimagine existing culture and wellness initiatives and communicate their connection to more tangible concerns about nances and exibility will be well-positioned for success. The results of this survey don’t devalue the need to focus on such intangible priorities, but instead make a strong case for why they are a critical ingredient in becoming an employer of choice. Employees may not have ranked culture and wellbeing priorities highly, but the items they care about most are closely connected to these priorities. ‣ ‣ Don’t De-Prioritize Culture and Wellness; Reimagine Them02

2025 Workforce Insights Guide 12Use Hard Data to Make Group-Level Employee Value Propositions 03Over the next decade, the number of employees in the country is projected to increase by a paltry 0.4% 2, and will actually decline relative to the population as a whole. In light of these demographic constraints, business leaders should be asking themselves, “How much do I want my organization to grow during that time?” When faced with that question, our clients will typically say something like 10 or 15%. However, the hard truth is that everyone cannot grow at 10-15%. Such a goal would require your organization to grow dozens of times faster than the labor market as a whole, and that’s before turnover of existing employees is taken into account. While such an ambitious trajectory is possible, it’s not going to happen by itself. This type of runaway recruiting and retention success is only possible with a concerted strategy that is grounded in hard data about what employees want. The most competitive employers are not just advertising to jobseekers with a single, one-size-ts-all elevator pitch. Instead, they are using insights from sources like the Employee Value Perception Study to construct tailored value propositions that resonate with different target demographics. For example, while the brand/reputation trait discussed above was the highest-rated option among all respondents, there was quite a gulf between the perception of this value among those in different stages of their career. Self-identied intermediate level employees gave brand/reputation a rst-place rating with +55%, the highest of any subgroup. However, executive-level employees assigned it a much more modest fourth-place rating at +20%, with Health Benets, Flexibility, and Retirement Benets taking the top three spots among that subgroup. This type of nely-sliced data, with specic information about employees at different life stages, different career stages, and in different industries, can be an extremely powerful tool when properly leveraged. People leaders who discard old-school approaches to attracting and retaining talent in favor of these highly personalized and data-driven alternatives stand to make signicant recruiting, retention, and engagement gains over those who do not.Beating the labor market requires customized employee value propositions for different target demographics.

2025 Workforce Insights Guide 13Employees place an extreme amount of importance on benets offerings, often citing them as a critical factor in job satisfaction and retention. Employers would do well to mirror this energy and treat benets as what they are: a window into the health and morale of their employees, a tool for demonstrating value, and an opportunity to transform lives for the better. 010203Blueprint for Ditching Your Company’s Expensive Health Plan Gene Therapies and GLP-1s: How Should Plan Sponsors Cover these Emerging Medicines?Taking Action for Inclusive Benets and Workplace Accommodations Innovative Benets: Cost-Conscious Ways to Offer More

2025 Workforce Insights Guide 142 in 5employees are concerned that their medical plan is not competitive with similar employers in their industry.A deteriorating health insurance marketplace is pushing more employers to experiment with alternative health plans. However, it is important to calculate the risks carefully before switching to something new. It’s no secret that employers and employees everywhere are buckling under the strain of health and pharmacy plan expenses. Premium renewals have been particularly painful in the last couple of plan cycles, with costs often rising faster than prots, wages, or ination, contributing to widespread nancial stress in the American workforce and a renewed focus on cost containment. This means that the value of health insurance plans is declining in real terms, which has, in turn, resulted in growing discontent with the status quo among both plan sponsors and members. This discontent has motivated a growing number of employers to experiment with health plan funding models that would have once been considered too risky. Employers who are willing to assess the wide array of funding models available to them, think critically about the pros and cons of each, and make a strategic decision to try something new may be able to realize signicant savings. Finding the right funding model can have positive ramications that go well beyond your company’s bottom line. Optimizing your health plan can result in better health outcomes for employees, reduced nancial stress within your workforce, and elevated productivity and morale. To kickstart this journey, it’s critical to understand the three primary types of health plan funding models: fully insured, level-funded, and self-funded. A Blueprint for Ditching Your Company’s Expensive Health Plan OneDigital 2024 Employee Value Perception Study For more information on these topics, access OneDigital’s Cost Containment Playbook

2025 Workforce Insights Guide 15Protection, Control, and Financial Risk When evaluating different plan types, it can be useful to envision them on a continuum dened by a central trade-off between plan protection and plan control. Here, “protection” refers to protection from the nancial liability that can result from higher-than-expected plan usage or catastrophic claims. High protection levels tend to correlate to higher premium costs, more stable and predictable health expenditures, and less transparency into how an organization’s health dollars are being spent. “Control” refers to the ability of plan sponsors to customize their plan design according to the needs of their organization, determine what is covered and how, and pick which health vendors and service providers they would like to work with. High-control plans tend to correlate to lower costs in years where utilization is at or below average, a higher degree of nancial volatility and risk (although there are ways to mitigate this), and greater access to health spending information. Virtually all health plan funding models can be bucketed into three categories: 01Fully Insured Plans These are the most conservative, providing maximum nancial protection with minimal control. Employers outsource all plan management to their carrier for a fee and have limited access to plan expenditure data. Monthly expenses are predictable, and liability is capped. 02Level-Funded Plans Similar to fully insured plans, level-funded plans offer limited liability with some potential for cost recovery if utilization is lower than expected. Employers may receive rebates through dividends, but costs can increase if usage is higher than anticipated. More ControlLess ControlMore ProtectionLess ProtectionFull-Funded Level Funded Bundled Self-Funding Unbundled Self-FundingSelf-Funded Plans These plans offer the highest level of customization and control but also come with greater nancial risk. Employers manage all aspects of the plan and assume full nancial responsibility. The benets include retaining any savings from lower-than-expected usage, making this option appealing for those frustrated with rising premiums. 03

2025 Workforce Insights Guide 16For employers tired of the status quo and feeling powerless against constant premium hikes, self-funded plans deserve serious consideration. Below, we will explore three of the most innovative and impactful variations of self-funded plans in greater detail: “Unbundled” Self-Funded All mid-market and large self-funded plans have the following components: a medical administrator, a pharmacy benet manager, reinsurance protection for catastrophic plans, and either purchased access to an existing health network or another mechanism that determines how claims will be paid. In a self-funded model, the employer is responsible for directly contracting and managing these vendors for these different plan components. These components can either be “bundled” with the same carrier, or “unbundled” with different vendors taking over one or two of the components. Bundled self-funded arrangements are often viewed as a favorable next step after level-funding, but employers may also transition straight from a fully insured plan. In a bundled arrangement, plan sponsors will partner with a major medical carrier to administer all components of their health plan. The employer takes on all the nancial risk under their reinsurance limit, and the carrier takes on the administrative lift. Unbundled self-funded plans are at the farthest end of the risk-protection spectrum due to the level of control employers gain by moving fully away from the medical carrier arrangement. Unbundling allows plan sponsors to pick “best in class” providers to administer their health plans; this can result in some additional administrative lift on the employer’s end, but typically yields the highest level of savings. This plan category offers employers near-total control over the structure of their plan, near-total transparency into data about their plan spend, and the maximum amount of both risk and reward. Group Health Insurance Captives A group insurance captive is a strategic healthcare funding arrangement between multiple like-minded employers. In order to participate in a captive, employers must either already be self-funded or prepared to go self-funded. Together, these employers can act as a team to pool their risk, leverage economies of scale, and create and administer their own high-performing health plan. This sharing of responsibility means that captives are less risky and come with a lower administrative burden than un-bundled self-funded plans that are operated by a single employer.

2025 Workforce Insights Guide 17What’s Your Risk Tolerance? Ultimately, determining which plan model is the best t for your organization and whether it is time for a change requires a realistic appraisal of how much additional nancial risk and administrative burden your organization is willing to tolerate. Realistically, the riskier options detailed above are not going to work for everybody. Though the higher costs of fully insured plans are irritating, there is a reason that they continue to stick around. For many employers, the high level of nancial protection and total outsourcing of plan management are worth the additional expense. However, those struggling with the burden of skyrocketing premiums should do their due diligence and conduct a study of alternative plan funding model options. Employers who don’t seriously investigate this possibility risk leaving money on the table and subjecting themselves to unnecessary and painful premium increases down the road. Reference-Based Pricing Reference-Based Pricing (RBP) is an alternative network option that allows members to go to any provider at a fraction of the price of traditional carrier networks. RBP Plans are unique in that there is no network of participating providers or facilities — members are free to seek care from any provider or facility they want. Under an RBP plan, the plan sponsor is placing a cap on the amount paid for specic services by their health plan. RBP plans are offered by many entities, including both major carriers and smaller “boutique” providers. This cap is determined by referencing an existing price index as a baseline and adding a certain margin on top. Medicare prices are the most common point of reference for RBP plans. This means that instead of a healthcare provider sending an insurance carrier their “sticker price” for a service performed, as is the case in most conventional plans, an RBP plan sponsor will reference the Medicare price for said service and tell the provider that they are willing to pay (for example) 125% of that rate. This type of plan structure obviously has the potential to save sponsors and members large sums of money. However, there are more hurdles to implementation for RBP plans than for any of the options discussed above. For one thing, healthcare providers are not necessarily obligated to see patients with RBP plans in non-emergency situations, and technically have the right to turn patients away if they do not want to work with RBP plan members. In addition to this, healthcare providers may provide treatment to RBP plan members, but bill them at a higher cost than is mandated by their plan guidelines. This is called “balance billing” and must be negotiated on the back end by plan sponsors. Lastly, because this plan type is different from all other forms of health insurance, it requires a signicant employee engagement and education campaign in order to ensure that adoption and utilization go smoothly.

2025 Workforce Insights Guide 18These novel prescription drugs are both medically miraculous and prohibitively expensive. Here’s how health plan sponsors can insulate themselves from nancial risk. Recent scientic breakthroughs have gifted us with two new types of medicine, each of which has the potential to provide truly transformative relief for suffering patients: gene therapies for rare diseases, and glucagon-like-peptide-1 receptor agonists (GLP-1s) for diabetes and weight loss. While these developments are excellent news for humanity, their high costs also present challenges for health and pharmacy plan sponsors in the United States. How should employers balance the imperative of providing coverage to plan members and dependents with the high level of nancial risk posed by these treatments? Gene Therapies: Cutting-Edge Treatments at Steep Prices Gene therapies represent a frontier in treating genetic disorders, often offering the only viable solution for debilitating lifelong conditions. Gene therapies treat disease by introducing or altering genetic materials within the body, and frequently require only a single injection in a patient’s lifetime. Only about a dozen pioneering gene therapies are on the market today, but the FDA projects that this will grow exponentially in the near future. This inux of new gene therapies will force health plan sponsors to confront the extraordinarily high nancial costs associated with these treatments, which are frequently priced in the millions of dollars.The nancial implications for health plan sponsors are profound. Employers can face signicant nancial consequences if even a single plan member undergoes gene therapy treatment. Self-funded plans, where employers bear the direct cost of medical claims, may be particularly vulnerable. Gene Therapies and GLP-1s: How Should Plan Sponsors Cover These Emerging Medicines?

2025 Workforce Insights Guide 19While self-funded plans have the option of simply excluding coverage of gene therapies, this comes with its own type of cost: the bulk of gene therapy recipients are the dependent children of covered employees, who frequently suffer from debilitating conditions with no other treatment options. To manage these costs, some sponsors opt for gene therapy carve-out policies, where coverage for gene therapy is not included in the baseline health benet and an additional premium is paid to a secondary insurer for a specialized gene therapy policy, which pays out in the event that a plan member requires gene therapy treatment. Additionally, stop-loss insurance is recommended to protect against catastrophic claims, with stop loss carriers covering all plan claims after a certain annual spending threshold is crossed. GLP-1 Drugs: Should Plan Sponsors Provide Coverage for Weight Loss?Obesity is one of America’s most pressing public health crises, with nearly 40% of adults classied as obese—a sharp increase from 15% in the 1970s. 2 This epidemic is not only a health concern but also a major economic burden, costing the healthcare system an estimated $173 billion annually. 3 GLP-1 drugs, initially developed for type 2 diabetes, have emerged as a potent weapon against obesity. By slowing glucose absorption and gastric emptying, these drugs reduce appetite and extend feelings of fullness, leading to substantial weight loss. Drugs like Zepbound have shown remarkable results in clinical trials, with patients losing over 22% of their body weight.4 However, the high cost of these medications—often exceeding $1,000 per month—poses a signicant barrier for plan sponsors. While coverage of GLP-1s for diabetes is uncontroversial, only one in four employers cover these drugs for non-diabetic plan members who seek to use them for weight loss.5 This coverage decision would be more straightforward if GLP-1s were a cure-all for obesity. However, the truth is that these medications come with signicant side effects, including abdominal pain, nausea, and more severe risks such as medullary thyroid cancer. GLP-1s are also new enough that very little is known about their potential long-term effects on patients. In addition to this, the efcacy of these drugs is largely contingent upon consistent dosage, with discontinuation typically resulting in signicant weight gain. Recent gene therapies have been priced at over $4 Million, and it is possible that future approvals will go higher still.

2025 Workforce Insights Guide 20Proponents of coverage would argue that the upsides outweigh these concerns. Coverage of GLP-1 drugs is a potential recruiting strategy, reecting a company that values employee wellbeing and offers comprehensive benets. Utilization management programs are used by 79% of employers covering GLP-1 drugs, which can help control costs effectively.6 Covering GLP-1 drugs for weight loss adds about 9.0% in annual medical claim spend on average.7 In some circumstances, this can be more cost-effective than other medical interventions for weight loss, such as bariatric surgery. Regardless of whether your organization decides to cover GLP-1 drugs, it is valuable to consider alternative approaches to supporting employee health and weight loss, such as employer-sponsored nutritional and exercise programs. Employers can promote physical activity initiatives, like subsidized gym memberships, workplace wellness challenges, and exible time off for exercise. Employers might also consider policies promoting nutritional education and access, including partnerships with local farmers’ markets to supply healthy food options in the workplace. Lastly, employers can also work with vendors to provide access to the latest weight-management technologies, including wearable Continuous Glucose Monitors (CGMs) and apps that combine human and AI tness coaching. A Fork in the Road for Health Plan Sponsors Both GLP-1 drugs and gene therapies highlight the tension between medical innovation and the nancial realities of health coverage in the United States. For employers and plan sponsors, the challenge lies in balancing accessibility and employee wellbeing with nancial realities and organizational risk. Employers are encouraged to monitor new developments in the medical and pharmacological space, model the ways in which these could impact their health plan spending and larger business goals, and make informed decisions on the optimal path for their organization. OneDigital’s employee benets and pharmacy consulting practices stand ready to assist our clients in making these difcult calculations.1 in 3employers cover GLP-1 drugs for weight loss.For more information on these topics, access OneDigital’s whitepaper on whether to cover GLP-1 drugs

2025 Workforce Insights Guide 21Employers are increasingly recognizing the importance of providing benets that not only support the physical health of their employees, but also foster ethical, inclusive, and socially responsible outcomes. While a great deal of progress has been made on this front in recent years, OneDigital’s 2024 Employee Value Perception Study found that more than 3 in 10 employees do not feel safe bringing their whole self to work. A conscientious approach to employee benets can go a long way towards bridging this gap by encouraging a positive workplace culture, enhancing employee wellbeing, and demonstrating a real commitment to inclusivity. The following policy proposals are just some of the many ways that caring employers can take concrete actions to make their workplaces accommodating to employees of all stripes: employees do not feel safe bringing their whole self to work. - OneDigital 2024 Employee Value Perception Study Taking Action for Inclusive Benets and Workplace Accommodations 3 in 10

2025 Workforce Insights Guide 22Offering benets that go above and beyond the conventional suite of corporate offerings is an excellent way for an organization’s leaders to demonstrate that they care about the holistic wellbeing of their employee population. By implementing policies such as those outlined below, companies can simultaneously meet the diverse needs of their workforce and build a respectful culture that attracts and retains top talent. Medical Coverage Comprehensive medical coverage is a cornerstone of inclusive benets, ensuring that all employees have access to the healthcare services they need. This can include steps such as: Expanded Coverage: Truly inclusive medical benets should cover a wide range of health services that cater to the unique needs of diverse employee populations, including mental health services, preventative care, and specialty medications.Reproductive Care and Women’s Health: Regardless of what jurisdiction your organization is situated in, it is possible to support employees seeking access to reproductive care. Providing information to female employees on high-quality, in-network providers for menopausal and gynecological care is an excellent way to counter systemic gaps in the availability of medical treatment for women’s health issues. Gender-Afrming Care: Providing coverage for gender-afrming care and treatments related to sex afrmation or reassignment is crucial. Recognizing these services as medically necessary and including them in health benets plans validates the identities of transgender and non-binary employees and supports their health and wellbeing. How to Design More Inclusive Benets Offerings

2025 Workforce Insights Guide 23Flexible Time Off and Caregiver Support Understanding the varying caregiving responsibilities employees may have is essential for creating an inclusive workplace. Companies can support their employees by: Parental Time Off: Offering parental time off for all parents, regardless of gender, including adoptive and foster parents, ensures that all families are supported. Caregiving Support: Recognizing that employees may be responsible for caregiving beyond childcare, such as eldercare, and offering policies like paid time off or ex time can signicantly alleviate the stress and challenges associated with these responsibilities. Floating Holidays: Allowing employees to choose their holidays according to their cultural, religious, or personal signicance promotes respect and understanding of diverse traditions and practices. Diverse Wellness Programs Creating wellness programs that are inclusive and accessible to all employees is vital for promoting overall health and wellbeing: Employee Surveys: Conducting surveys to understand the needs and preferences of employees can help tailor wellness programs that are truly benecial. Accessibility and Flexibility: Ensuring that wellness programs are accessible to employees with disabilities and provide resources in multiple languages can greatly increase participation. Cultural and Economic Consideration: Designing programs that are mindful of cultural food preferences and economic situations ensures that wellness initiatives are relevant and inclusive.

2025 Workforce Insights Guide 24Supporting neurodivergent employees often entails customized resources and policies that meet their individual needs. These can include: Coaches and Navigators: Assign coaches or navigators who can guide neurodivergent employees through both personal challenges and professional development, including setting career goals, navigating workplace dynamics, and accessing resources. Schedule and Location Accommodations: Allow employees to exibly deviate from a standard work schedule in order to receive medical care themselves or act as a caregiver to others. Compliance Assistance: Enlist compliance expertise to ensure that accommodations and support measures meet legal and regulatory requirements. This not only ensures that neurodivergent employees are being properly supported, but also mitigates legal risk and liability for the company. A key part of building an inclusive workplace involves recognizing and supporting neurodivergent individuals, who may have unique challenges and strengths. Neurodivergence is a nonmedical term for people whose brains develop and work differently than the average person. This can encompass a variety of conditions such as ADHD, autism, dyslexia, dyscalculia, dysgraphia, and Down’s syndrome. Employers can take steps to support these employees by: Employers can make in-person workspaces more neurodiversity-friendly by implementing some minor adjustments that cater to various sensory and communication needs: Sensory Accommodations: Creating quiet spaces helps employees with sound sensitivity to focus and feel comfortable in their work environment. For those with tactile sensitivities, permitting modications to work uniforms can make a signicant difference. Movement and Flexibility: Some individuals work best when they can move or dget. Allowing the use of dget toys, offering exible seating arrangements, and securing walkable spaces near your ofce can improve focus and productivity. Communication: Adopting a clear and straightforward communication style, avoiding sarcasm, and providing concise verbal and written instructions can help prevent misunderstandings. Accommodating Neurodivergent Employees Implementing Support Measures Making Workplace Adjustments 0102

2025 Workforce Insights Guide 2503Focusing on Training and Awareness Understanding unconventional workplace behavior through a framework of neurodiversity is a relatively new concept. Educating your workforce about neurodiversity and how to support neurodivergent colleagues can be a benecial step to ensure that everyone in your organization is on the same page: Neuro-inclusion Workshops: These can cover topics such as understanding different neurodivergent conditions, effective communication strategies for neurodiverse employees, and simple process changes that managers can make to help their team members feel more comfortable. On-Demand Resources: Providing access to corporate trainings in a pre-recorded, on-demand format allows employees to learn at their own pace and revisit materials as needed. Promoting a Welcoming Culture: In-house training resources should emphasize the importance of kindness, patience, and exibility regarding interpersonal communication in the workplace.

2025 Workforce Insights Guide 26In an era where employees increasingly seek purpose and alignment with their personal values in their work, employers are responding by integrating benets that underscore a commitment to social and environmental responsibility. This trend not only enhances a company’s appeal as a forward-thinking employer but also contributes signicantly to a more inclusive, sustainable, and ethically responsible business landscape. Here’s a closer look at how these benets are being implemented: Social Responsibility Policies Adopting policies that address broader societal challenges demonstrates a company’s commitment to more than just prot. These policies may include: Emergency Employee Funds: Creating a safety net for employees facing unforeseen nancial hardships can cultivate a supportive workplace culture. Mental Health Days: Acknowledging the importance of mental health by offering dedicated time off encourages employees to take care of their wellbeing without stigma. Daycare Services: Providing on-site daycare or subsidizing childcare costs helps ease the burden on working parents, promoting work-life balance specialty medications. Sustainable Practices With environmental concerns increasingly inuencing consumer and employee choices, companies are stepping up by: Promoting Eco-friendly Materials: Switching to sustainable materials in company operations, from the cafeteria to the ofce supplies, reects a commitment to reducing environmental impact. Investing in Sustainable Choices: Offering rewards or incentives for employees who make eco-friendly choices. This can include subsidizing public transit or bikeshare costs for commuters, partially subsidizing employee purchases of efcient appliances, or funding local environmental initiatives. Environmentally and Socially Responsible Benets

2025 Workforce Insights Guide 27Volunteering and Charitable Donations Corporate philanthropy not only benets the community but also reinforces a company’s ethical values. In addition to offering PTO for volunteering, businesses can give back by: Matching Employee Donations: Doubling the impact of employees’ charitable contributions through matching programs can encourage generosity and demonstrate the company’s support for causes important to its workforce. Strategic Charity Partnerships: Aligning with charities that reect the company’s values and mission can enhance brand integrity and foster employee pride in their organization. By weaving these social and environmental responsibilities into benets offerings and company policies, employers can address the immediate needs of their employees while also contributing to positive changes in the wider world. Actions like these are an excellent way to demonstrate your organization’s commitment to ethically sound behavior goes beyond mere rhetoric, and that your leadership is seriously invested in corporate responsibility.

2025 Workforce Insights Guide 28Businesses don’t operate in a vacuum. Even the most successful companies are subject to the whims of governments, marketplaces, and our planet’s very climate. Employers who lose touch with these foundational issues risk becoming the victim of unfortunate circumstances that they could have been prepared for and hemorrhaging resources that could have been spent on other priorities. 010203Regulatory Rumblings: 4 Worrying Legal Trends for Employers to Watch Why America’s Property Insurance Market is UnravelingBusinesses Are Vulnerable to Increasingly-Sophisticated Cyberattacks Industry Headwinds: Emerging Challenges For American Employers

2025 Workforce Insights Guide 29The following four items are ongoing legal and regulatory developments that business leaders should be aware of, as each of them has the potential to signicantly impact employers everywhere. » Multiple class-action lawsuits have been led by employees against plan sponsors due to the alleged mismanagement of health and pharmacy benets. The most high-prole of these suits were led against Johnson & Johnson and The Mayo Clinic in early 2024. » The substance of the allegations against these two plan sponsors are very different, but they both center on alleged violations of ERISA duciary obligations. Said obligations have traditionally been more associated with retirement plans, but these lawsuits are a reminder that the same rules apply to health and pharma benets as well. Under ERISA, a benet plan duciary is any person or entity with authority over an employer-sponsored benet plan, meaning that both businesses and individual employees who play a role in managing the plan may be sued for violations. » Best practices for minimizing exposure to health plan duciary lawsuits include vendor due diligence and cost benchmarking, third-party plan reviews, transparent communication with plan members, thorough documentation of the rationale for plan changes, and proactive efforts to contain plan costs. Regulatory Rumblings: Four Worrying Legal Trends for Employers to Watch Health Plan Fiduciary Lawsuits 01What we’re doing: OneDigital is monitoring the progress of these novel lawsuits and providing our clients with guidance on duciary best practices and benet cost-cutting strategies.

2025 Workforce Insights Guide 30 » In early 2023, the FTC unveiled a proposed rule to ban virtually all non-compete agreements due to their dampening effect on competition and innovation. Though there was some initial skepticism as to whether this measure would make it past the proposal stage, the FTC voted 3-2 in favor of enacting the ban in April 2024. » The rule was published in the Federal Register on May 7, 2024, and was initially scheduled to go into effect on September 4, 2024. Once in effect, the rule is designed to apply both retroactively and going forward to all workers in the United States, with only a few exceptions. This ruling supersedes all relevant state laws and regulations. » As expected, a urry of legal challenges to the rule were immediately led. Implementation of the rule is expected to be delayed past the September 4, 2024, date while these challenges are considered. There are legitimate questions as to whether the FTC is able to enact such a sweeping change without an act of Congress, and it is difcult to predict how and where this will end. The Death of Non-Compete Agreements 02What we’re doing: OneDigital is keeping our clients appraised of the latest developments and providing guidance on which non-competes will still be permissible if this rule is enforced. Proposed Taxation of Benets Plans 03 » The idea of implementing a tax on employer-sponsored benet plans has been kicking around in Congress for quite some time. While some support for this idea is ideological in nature, proponents are increasingly framing their case in scal terms. » As the country’s decit and debt problems grow increasingly severe, employer-sponsored benet plans represent a potentially enormous stream of untapped revenue. A tax on benet plans would likely involve the imposition of one or more deductibles on plan spending, with any expenses beyond a plan’s deductible subject to taxation at a rate determined by Congress. It is possible that employers below a certain size would be exempted.

2025 Workforce Insights Guide 31ERISA Preemption for Self-Funded Plans 04 » Fully insured health plans are regulated at the state level, which allows state governments to mandate differing coverage levels for employers offering these plans. For example, fully insured plans must cover in-vitro fertilization (IVF) services in New Jersey, but such coverage is optional in neighboring Pennsylvania. » Self-funded health plans are different, having historically been regulated solely at the federal level under ERISA. ERISA has been understood to pre-empt any state-level efforts to regulate self-funded plans. However, in recent years, several state governments have attempted to disrupt this status quo and impose regulations on self-funded plans. » It is much easier and more efcient for multi-state employers to build a single federally-compliant plan rather navigate a uid set of requirements from dozens of different jurisdictions. If the historic ERISA pre-emption in this matter were to disappear, it would result in a fragmented legal landscape and a mountain of new compliance obligations for self-funded plan sponsors. » As a erce advocate for the interests of our employer clients, OneDigital maintains a presence on Capitol Hill and works closely with the National Association of Benets and Insurance Professionals (NABIP) and the Council of Insurance Agents & Brokers (CIAB). In this capacity, we work to monitor legislative developments in Congress and report them to our clients, push for common-sense reforms, and argue against unnecessarily burdensome regulations. To learn more, you can connect with our in-house compliance consulting team.What we’re doing: OneDigital is lobbying against the taxation of employer-sponsored benets plans. » In addition to being a new nancial burden on employers and employees, such a policy could also disincentivize some businesses from offering health insurance at all. Though a proposal along these lines is unlikely to become law in the next Congress, it remains a real possibility as long as the nation’s nancial health continues to deteriorate. What we’re doing: OneDigital is lobbying to codify ERISA preemption of self-funded plans into law.

2025 Workforce Insights Guide 32Poor economic conditions and surging natural disasters have prompted commercial property insurers to abandon large swathes of the country. The economic turmoil of recent years has contributed to increasingly costly building materials, a shortage of construction workers, extended construction timelines, higher business interruption costs, and ballooning property valuations. However, these market-based challenges are not a novel threat. They have been faced before and can be overcome with time. Unfortunately, man-made climate change and an unprecedented increase in the strength and frequency of natural disasters are a novel threat. Today, geographic location and climactic conditions act as critical drivers in the ination of property insurance prices. Regions vulnerable to hurricanes, oods, wildres, tornadoes, and winter storms typically incur higher insurance rates due to the increased frequency and severity of these events, which collectively caused losses exceeding $100 billion in 2023.8 Between 2020 and 2023, the U.S. experienced more than 80 weather and climate disasters with losses surpassing $1 billion.9 This period witnessed several unnerving milestones, including the devastating Hurricane Ian, untold billions in ooding and wildre damage, tropical storms traveling unusually far north, and countless broken temperature and rainfall records. These events have precipitated a rapid unraveling of the commercial property market, with carriers swallowing gargantuan losses and policyholders facing steep renewals. As conditions worsen and capacities shrink, insurers are increasingly opting to abandon entire states and regions, leaving commercial property owners in the lurch. State and local governments are scrambling to staunch the bleeding and provide public-sector insurance options, but the extent to which they can remedy the situation without federal support is unclear. This negative trajectory has caused both insurers and policyholders to express grave doubts about the future feasibility of property insurance in America.What should commercial property owners do? This challenging landscape of economic pressures, increasing natural disasters, and insurer withdrawals has placed commercial property owners in a difcult position. In the past, property insurance rates were primarily determined by the building’s quality. Today, rates are increasingly inuenced by factors such as the construction year, materials used, the property’s geographic location, and particularly by its vulnerability to natural disasters. Why America’s Property Insurance Market Is Unraveling

2025 Workforce Insights Guide 33Insurance strategies once considered conservative are now essential in today’s tough property market. In this environment, it is crucial for property owners to take proactive measures to ensure their coverage is both adequate and cost-effective. If you are worried about your current coverage or your next renewal, consider these steps to mitigate your risk prole and make yourself more attractive to insurers: 01Bundle and Prepay Policies: By combining multiple insurance policies with the same provider, you may qualify for discounts. Additionally, consider paying premiums in advance to benet from possible cost reductions offered by some insurers. 02Enhance Property Security and Maintenance: Address delayed maintenance issues such as upgrading sprinkler systems, repairing roofs, and updating security and electrical systems. These improvements can lower the risk of damage and potentially reduce your insurance premiums. 03Conduct Thorough Inspections: Hire a licensed professional to inspect your property thoroughly. Identifying potential risks or existing damages early can help manage your insurance premiums better. 04Update Building Valuations: Have your insurance agency perform a current valuation of your building to ensure your coverage matches the property’s value and condition. This helps prevent underinsurance, particularly given recent inationary trends. 06Actively Manage Your Coverage: Work closely with your insurance agent to ensure you have the best possible coverage. Regularly review your policy details and adjust as market conditions and your property needs change.05Benchmark Insurance Costs: Compare your property’s insurance cost per square foot with similar buildings in your area. This comparison can help determine if you are paying a competitive rate and identify opportunities for negotiating better terms. As conditions worsen and capacities shrink, insurers are opting to pull out of entire states and regions. Going without coverage may seem tempting in today’s historically unfavorable property insurance marketplace, but commercial property owners are strongly advised to avoid such a decision. When a natural disaster strikes an uninsured commercial property, it is often impossible for the owner to absorb the nancial liability. This is why it’s essential to follow the guidance above, thoroughly explore options within the marketplace, and protect your assets at the most affordable rate possible.

2025 Workforce Insights Guide 34Companies both large and small are constantly being tested by increasingly sophisticated cybercriminals and professional, state-afliated hackers. AI could soon make the situation worse. Employers face a severe and growing threat from various types of cyberattacks. Among the most concerning of these are ransomware and scareware, which have wreaked havoc on countless organizations and led to signicant nancial and operational impacts. Ransomware is a form of malicious software (malware) designed to encrypt a victim’s data or lock them out of their system. The attacker demands a ransom, typically in cryptocurrency, to restore access to the data or system. Ransomware can inltrate a system through various methods, including phishing emails, malicious attachments, drive-by downloads, or exploiting software vulnerabilities. Once inside, the ransomware encrypts the victim’s les, rendering them inaccessible without a decryption key, and displays a ransom note demanding payment. Scareware is another type of malware that’s somewhat ironically designed to deceive victims into thinking that their computer is infected with malware or has other critical issues. If the victim engages with the scareware, the attacker can prompt them to download additional unnecessary or harmful software. Scareware typically manifests as pop-up ads or fake system alerts claiming a device is infected or has severe issues, using alarming language and visuals to scare the victim into immediate action. The victim is then directed to purchase fake antivirus software or services to “x” the non-existent problems. Businesses Are Vulnerable to Increasingly-Sophisticated Cyberattacks For more information on these topics, access OneDigital’s 5 Property and Casualty Market Insights for Employers Whitepaper

2025 Workforce Insights Guide 35Timeline: Major Cyberattacks on Businesses 2020: Travelex Travelex, a foreign exchange company, was attacked by the Sodinokibi/REvil ransomware group, leading to the company's websites and services being taken ofine. The attack caused serious operational disruptions, Travelex paid a ransom of $2.3 million in Bitcoin, and the company was forced to conduct mass layoffs and enter into administration. 2020: Fake Windows Security Alerts Attackers used scareware tactics to display fake Microsoft security alerts on thousands of users’ computers, prompting users to call a fake technical support number. Countless small businesses fell victim to this scam, leading to nancial losses and compromised personal information. 2021: Colonial Pipeline The Colonial Pipeline, a major fuel pipeline operator in the United States, was struck by the DarkSide ransomware group. This led to a shutdown of the pipeline, signicant fuel shortages, and other disruptions. The company paid a ransom of approximately $4.4 million in Bitcoin, part of which was later recovered by the U.S. Department of Justice. 2021: JBS Foods JBS Foods, one of the world’s largest meat processing companies, was attacked by the REvil ransomware group, disrupting meat production and supply chains in several countries. JBS wound up paying an $11 million ransom in Bitcoin to prevent further disruptions. 2023: Microsoft Exchange Hack The personal email accounts of senior Microsoft executives were breached in a sophisticated hacking attack that exploited vulnerabilities in Microsoft’s email server software. This attack was conducted by a hacker group that is afliated with the Russian government.

2025 Workforce Insights Guide 36A Changing Threat Landscape: AI & State Actors Employers have come a long way in the realm of digital hygiene. Today, the best practices for protecting businesses from cyberattacks are established, well-known, and widely-followed. Unfortunately, a shifting threat landscape means that good behavior may not be enough to prevent even worse disruptions in the years ahead. As great power tensions continue to escalate, state-backed hackers are increasingly likely to target private-sector entities within rival nations. The 2023 Microsoft Exchange attack is a clear example of this, with the Russian state attacking the Microsoft Corporation by proxy and successfully accessing the condential emails of high-ranking employees. Employers who do business with the U.S. government have particular cause for concern. Another worrisome development lies in generative AI, which has the potential to dramatically tilt the playing eld in favor of attackers. The most straightforward issue lies in the powerful coding abilities of today’s consumer-level AI programs, which can enable attackers to rapidly create and edit new malware. AI can also be used to write convincing phishing messages and social engineering attacks in uent English, even if the attacker cannot speak the language. In addition to this, AI can be used to create realistic deepfakes of human voices, which could, for example, manifest in the form of fraudulent phone calls or voicemails “from” a CEO to his or her subordinates. One prudent step that can be taken to mitigate the negative impact of cyberattacks is purchasing cyber insurance, which can help to lessen the nancial blow of a successful breach. The cyber insurance market has settled down in recent years after an incredibly volatile period from 2020-2022, when average annual premium increases clocked in as high as 135%. By comparison, the current cyber insurance market is quite predictable, and purchasing a corporate policy is a prudent investment.

2025 Workforce Insights Guide 37Generative AI is transforming the American workplace. These programs are not just instruments for humans to wield, but companions that are capable of independently adding value to the work we perform. As employers grapple with the enormous ramications of this technology and try to formulate AI policies and guidelines, they would be wise to lean on HR professionals and other people leaders for advice. 010203Employers are Putting the Wrong People in Charge of AI Strategy The Promise of AI-Powered Telehealth Screenings De-Risking Corporate AI: Why Human Oversight Is Still Needed What Should Employers do With Articial Intelligence?

2025 Workforce Insights Guide 38People leaders need to muscle into conversations that are usually dominated by software engineers and tech executives. Employers were no more prepared for the advent of generative AI than anybody else, and it caught almost all of them at-footed. The capabilities of these platforms are continuing to grow at a breakneck pace, and prior assumptions about the unique value of human labor are eroding before our eyes. The potential long-term effects of AI on the labor market and human industry in general are both tantalizing and scary. Dramatic efciency improvements, millions of jobs consolidated or eliminated, and an unknown number of entirely new career types created from thin air – all of these are in the ofng. Entire categories of mundane white-collar work could be automated away, with many blue and grey-collar jobs eventually following suit. However, we are not there yet. Today, a couple of years after the initial splash of ChatGPT, generative AI sits in an uncomfortable transitional zone. The technology is incredibly powerful, but still has signicant limitations. In the here and now, leaders have the unenviable job of guring out how to leverage a groundbreaking technology that, in many ways, is not ready for prime time. In the medium term, things will be quite different. Once the bugs have been eliminated and next-generation AI bots become available, businesses must be prepared to utterly upend current practices in order to accommodate their incredible potential. Employers Are Putting The Wrong People In Charge Of AI StrategyPrior assumptions about the unique value of human labor are eroding before our eyes.

2025 Workforce Insights Guide 39The optimal policy response to AI will naturally differ according to the industry, mission, and priorities of a given employer, but everyone in corporate America would do well to predicate their actions on the following key points:01This technology upends centuries-old beliefs about the nature of work and employment. 02This technology is still in a relatively early stage of development, the situation is uid, and the timeline of future innovation is unknowable. 03The risk of incorporating this technology into your business is dwarfed by the potential benets. 04Employers who resist this technology will be overtaken by competitors who embrace it. 05The distinction between human and AI labor will become increasingly meaningless as time passes.How to Handle Inhuman Resources When most people hear the term “hybrid workforce,” they think of employees who split their time between remote and in-person work. However, in the near future, hybrid may instead refer to workforces that consist of both esh-and-blood humans and AI “employees.” Even today, the chatbot interface of generative AI programs can be quite convincing – remember that Google engineer who claimed that one of the company’s language models became sentient?10 As this class of technology develops further, it is quite possible that AI bots in the workplace will be viewed less as products and more as companions. Generative AI models are becoming increasingly agentic in nature, meaning that they possess a substantial amount of agency in their actions and are capable of taking on individualistic personas. When next-generation AI avatars are deployed in corporate ofces in the years ahead, they will train themselves on inputs that are unique to their particular workplaces. As these AI models learn from this real-world experience and develop idiosyncratic “personalities,” the line between human and inhuman resources will become increasingly blurred. If human beings and agentic AI models come to coexist as something akin to peers, the discipline of HR will be forever changed. To better understand the potential impact of these developments, we’ve broken down ve major areas in which AI could transform talent management, organizational culture, and the nature of work itself:AI bots in the workplace may come to be viewed less as products and more as companions.

2025 Workforce Insights Guide 40Experience and Merit 01Traditional approach:Job descriptions contain language that indicates required years of experience in specic industries or skill sets. Higher education and ofcial certications are thought to be strongly correlated with knowledge and ability. When managers promote people, they typically base their decision on the quality of past work and the acquisition of formal expertise. How AI Could Challenge This: » Should advancement decisions and employee assessments be based not only upon work done by human beings, but also on work that is facilitated by humans but mostly performed by machines? » Will the value of traditional experience gained through hard work and formal education giving way to “virtual apprenticeships,” where people can quickly pick up new expertise with the help of AI? » Is merit soon to be based not only on one’s own abilities, but rather the strength of their AI companions? How Leaders and Managers May Need to Adjust Their Thinking:Job descriptions, hiring criteria, and what constitutes relevant experience and education could fundamentally change in the years ahead. Managers may need to turn their conceptions of merit upside-down and be comfortable with advancing employees who aren’t conventionally qualied or who are not necessarily skilled at doing work, but are skilled at facilitating it.Contribution Models and Team Structures02Traditional approach:Teams are made up of multiple people who divide labor amongst themselves. Oftentimes, employees are assessed by how well they work on a team vs. how well they work as an individual contributor. This is often viewed as a binary characteristic, and working well on a team with other people is considered to be a highly desirable trait. How AI Could Challenge This: » What happens when one’s ability to “work with” AI becomes just as important as collaboration with human colleagues? » Will future teams be composed of both humans and highly-trained AI agents which behave in a manner similar to people? » How would a weakening correlation between productivity and interpersonal skills affect the workplace? How Leaders and Managers May Need to Adjust Their Thinking:The traditional dichotomy of individual contributors vs. team players may need to be reassessed or even discarded. Much as the widespread adoption of remote work has changed conventional thinking about camaraderie in the workplace, the era of AI may require us to fundamentally change beliefs about what constitutes teamwork and whether individual contributors are really “alone.”

2025 Workforce Insights Guide 41Culture, Diversity, and an Organization’s Character 03Traditional approach: An organization’s culture is composed of many intangible and unique characteristics, attitudes, and traditions that accumulate between colleagues over time. Diversity is a critical ingredient in fostering a healthy culture insofar as a greater variety of backgrounds, beliefs, and ways of thinking makes for a more robust corporate “brain trust.” How AI Could Challenge This: » How could productivity gains from AI inuence concepts such as work-life balance, the desire for high-performing teams, and the traditional 40-hour workweek? » Will the addition of increasingly human-like AI bots to the workforce create a new type of diversity that isn’t captured by traditional DEI&B models? » What happens when the behavior of AI bots becomes so lifelike that they develop personalities that are difcult to distinguish from humans? Could they begin to shape the culture of an organization in the same way that people do? How Leaders and Managers May Need to Adjust Their Thinking: When sufciently sophisticated AI bots become integrated into working life, it could feel as though many new “people” are suddenly working on our teams. This development may necessitate changes in how we think about diversity, how we understand the concept of culture, and a reconsideration of whether an organization’s character is composed of solely human inputs. Traditional approach: Structured performance reviews are a longstanding mechanism for assessing the talent of existing employees and the value they add to an organization. Typically, this consists of one’s manager or another senior employee manually developing some sort of performance criteria and assessment mechanisms for an employee to complete. Employers with sufcient resources will often make an active effort to invest in employees who wish to further their skills and advance their careers. How AI Could Challenge This: » Why not have AI develop performance criteria and assessment mechanisms, conduct performance reviews to test knowledge and aptitude, and suggest feedback and next steps? » How could hyper-personalized learning and development programs based on real-time AI analysis of employee performance transform career growth? » Could AI bots that work with human employees be evaluated in the same way that people are, and could conducting evaluations of humans and AIs together become a normal practice? Performance and Development 04How Leaders and Managers May Need to Adjust Their Thinking: Managers may need to become comfortable with the idea of sharing employee oversight duties with machines that are, in many respects, more capable than they are. Honest assessments of skill and performance, which are inherently less likely to trigger an emotional response when coming from a bot rather than a human, could become standard in white-collar organizations very quickly. AIs acting in a mentorship capacity have a tremendous amount of potential when it comes to turbocharging young professionals and shaping career growth.

2025 Workforce Insights Guide 42Leadership and Hierarchy 05Traditional approach: Leadership is typically considered to be a skill set squarely in the domain of humans. Explicit and implicit hierarchies are everywhere in human society, including in our ofces. It is often believed that good leadership hinges not just on measurable knowledge and experience, but on ineffable qualities and personality traits that are conducive to marshalling many people to effectively work towards a common goal. How AI Could Challenge This: » What if traits conventionally associated with good leadership, like being a good listener and providing constructive feedback, can be augmented by AI bots that “sit in” on conversations between managers and their subordinates? » How would leadership be changed by the presence of an AI that “double-checks” or audits the decisionmaking of highly-ranked employees? » Would human employees ever accept an AI acting as their boss? How Leaders and Managers May Need to Adjust Their Thinking: The structure and hierarchy of most organizations dates from an analog age. This state of affairs makes little sense in a world populated by AI bots with superhuman capabilities in some aspects of management. The value of human leadership will not go away entirely, but human leaders may need to cede ground to bots in some key areas. In the near future, bots may directly intervene in executive decision-making or facilitate leadership training. Why HR Leaders Must Take a Seat at The Table Generative AI will quickly snowball into an enormous and inescapable phenomenon. Employers need to look ahead and understand that the chatbots we see today are the forerunners of much more powerful programs that will utterly transform the way that work is done. It is particularly important for people leaders to become involved in this issue now, while generative AI is still in its infancy. AI is not solely a technology issue – it stands to radically alter the way that human beings organize themselves, interact with each other, and cooperate to achieve common goals. Because of this, experts who specialize in the way that human systems work must take a seat at the table. In a workplace setting, this means HR professionals and workforce management consultants. As the impact of AI begins to manifest itself in our ofces, it is important to have voices in the room who will examine the problem from a workforce perspective and advocate for the interests of employees. HR leaders should not be afraid to muscle their way into conversations on AI policymaking that are often dominated by software engineers and tech executives. Their participation is necessary for businesses to think about AI holistically and successfully adapt their organizations to a rapidly-shifting reality. For more information on these topics, access our podcast A Deep Dive into AI in the Workplace

2025 Workforce Insights Guide 43Chronic diseases are on the rise and preventative health screening rates are low. Smartphone-based care can help reduce plan costs and bridge the health gap. In many ways, the telehealth revolution that began in 2020 has stalled or even begun to backslide. Post-pandemic studies have generally found that telehealth usage peaked in 2020-21 and has been declining ever since. While the bulk of this trend can be attributed to the reduced threat level posed by COVID-19 since 2022, there is also evidence suggesting that providers are reverting to pre-pandemic norms even in situations where it does not make sense to do so. This lack of momentum in the telehealth space should be cause for concern. The full potential for telehealth to improve health outcomes, reduce costs, and save time and energy is far from being fully realized, and higher levels of in-person safety should not be used as a rationale for reducing telehealth services. Preventative care is one of the most high-ROI telehealth use cases and should be a primary target for future telehealth investment and expansion. Closing the Preventive Care Gap The state of preventative care in America is both curious and concerning. On the one hand, everyone seems to agree that seeking preventative care is a win-win. When diseases are found earlier, it enables them to be treated sooner, which results in a reduction of suffering and negative health outcomes experienced by patients and lower costs for both patients and plan sponsors in the long run. However, it is estimated that less than 8% of U.S. adults adhere to the recommended schedule for preventative health screenings.11This low level of engagement is especially alarming due to the incredible prominence of chronic disease in our society. An estimated 129 million Americans, or more than 1 in 3 people, are currently living with at least one major chronic disease.12 The prevalence of chronic diseases has been steadily increasing for at least the past two decades and shows absolutely no sign of slowing down. Managing and treating chronic diseases accounts for an eye-popping 90% of the annual $4.1 trillion healthcare expenditure in the United States.13 A large proportion of those trillions of dollars in chronic care treatment is borne by employers in their capacity as health benet plan sponsors. In addition to the obvious moral imperative of bettering human health, this hard nancial reality gives business leaders a direct incentive to reduce barriers to preventative care and encourage their workforces to undergo preventative screenings. The Promise of AI-Powered Telehealth Screenings

2025 Workforce Insights Guide 44It is estimated that 85% of diseases can be either prevented or detected early, and a growing fraction of these are able to be screened for remotely.14 Because preventative care is already mostly free for individuals with health insurance, the primary areas of opportunity for those seeking to boost participation lie in lowering the amount of effort it takes to access remote care and improving the user experience. This is where pandemic-era telehealth innovations and newer generative AI technologies can really come together to make a huge difference. The New Face of Preventative Screenings The sudden spike in demand for telehealth services during the pandemic often resulted in improvisational, disjointed, and impersonal healthcare ecosystems that were difcult for patients to navigate. This has prompted a shift towards more integrated and personalized virtual care models that place a premium on convenience and useability. To make preventative care screenings as seamless as possible, recent innovations have focused on two key areas: virtual primary care practices and the use of AI and mobile smartphones for preventive screenings. Virtual primary care practices are gaining traction in the market by offering integrated, fully-remote care models that closely resemble traditional in-person primary care visits. These practices include referrals to key specialists as part of their programs, providing a more cohesive and comprehensive telehealth approach. In addition to virtual primary care, new vendors are leveraging smartphone-based generative AI to facilitate preventive screenings. Providers have developed technology capable of completing several different screenings via smartphone, including for the following conditions: These mobile screenings are designed to be user-friendly and accessible, allowing individuals to complete them from the comfort of their homes. If any risks are detected, telehealth patients are encouraged to schedule follow-up appointments with in-network providers, ensuring an uninterrupted continuum of care that mitigates downstream health risks. The integration of virtual care practices and AI-driven mobile screenings represents a signicant advancement in preventive healthcare. By removing barriers to access and providing convenient, personalized care options, these innovations have the potential to dramatically increase engagement in preventive screenings. This, in turn, can lead to early detection and prevention of diseases, ultimately improving health outcomes and reducing healthcare costs. Employers and health plans that embrace these innovations can expect to see both short-to-medium term cost savings and long-term benets stemming from a healthier workforce. Cardiovascular Health: Monitoring blood pressure and other cardiovascular indicators. Prediabetes: Conducting Hemoglobin A1c tests to detect prediabetes. Anxiety: Measuring heart rate variability to assess anxiety levels. Lung Cancer: Analyzing respiration patterns to identify potential lung cancer risks.

2025 Workforce Insights Guide 45In the midst of the headlong rush to integrate AI programs into corporate processes, HR professionals must be aware of the legal, ethical, and security risks involved. Over the past several years, the use of AI, large language models (LLMs) like ChatGPT, and other automated decision-making tools (ADTs) have been lauded as a way to streamline workplace processes and procedures and save employers time and resources. However, there are some pitfalls to these developing technologies that may pose serious risks and challenges to employers, specically within the context of human resources. Legally Dening Articial Intelligence Because AI encompasses a diverse array of applications, there is no singular denition for what constitutes AI technology. Congress has dened AI technology to mean “machine-based systems that can, for a given set of human-dened objectives, make predictions, recommendations, or decisions inuencing real or virtual environments.” The National Institute of Standards and Technology (NIST) has described AI technology as “software and/or hardware that can learn to solve complex problems, make predictions, or undertake tasks that require human-like sensing (i.e., vision, speech, and touch), perception, cognition, planning, learning, communication, or physical action.” In its simplest form, AI seeks to combine computer-based systems with organized collections of data to solve problems and achieve goals under various conditions. In a perfect world, AI is intended to empower machines and computers to mimic cognitive functions that traditionally require human thinking, and ultimately produce a “pure” output that represents rational decision-making, free of biases and other external inuences. But the more advanced AI becomes, the less it seems we truly understand its abilities. De-Risking Corporate AI: Why Human Oversight Is Still Needed

2025 Workforce Insights Guide 46What are the potential pitfalls of using AI in HR? When deployed in the context of human resources, we have seen AI technology used for recruitment and talent acquisition activities such analyzing resumes, screening candidates, identifying top talent, and administering pre-employment “job t” testing. AI has also been implemented as a performance management tool used to evaluate employee productivity metrics, project outcomes, and peer reviews. In addition to this, AI technology has been used to build predictive analytics frameworks by analyzing data from employee assessments and trainings to formulate suggestions about career pathways, advancement to new positions, and programs for developing additional skills. In some cases, employers have even relied upon AI to generate company policies and other written materials that are distributed to employees. Despite the breadth of possibilities with AI technologies, there remain many concerns about the ways in which these technologies gather, organize, and store data, some of which may create signicant challenges and liability issues under governing employment laws. Because of this, federal agencies are showing an increased interest in regulating the integration of these technologies into workplace processes. A Field Assistance Bulletin published by the Department of Labor in early 2024, which cited the potential for employer use of AI and ADTs to result in violations of the Fair Labor Standards Act, the Family and Medical Leave Act, and the Employee Polygraph Protection Act, demonstrates that this issue is very much on the radar of the federal government. State legislatures have also begun taking an interest in regulating the use of AI, imposing comprehensive compliance obligations for employers who use this technology. Concerns about AI in the workplace are very much on the radar of the federal government. For more information on these topics, access our on-demand webinar AI Isn’t Coming—It’s Here. Employer Compliance Guidance in a New Era of Tech

2025 Workforce Insights Guide 47Dataset & Ethical Concerns Data is the foundation of any AI system, as data is the basis upon which algorithms make decisions and predictions. In general, any output produced by an AI system will directly reect the underlying data that is input into that system. Of course, the concern here is “garbage in, garbage out.” Without quality data to learn from, AI models can (and often do) struggle to discern meaningful patterns or produce reliable outputs. From an HR compliance standpoint, the underrepresentation of diverse demographic groups within AI training datasets is a major cause for concern. We have seen real-world examples of corrupted datasets leading to erroneous AI outputs abound. In 2018, Amazon implemented and then quickly discontinued an AI recruiting tool due to gender bias perpetuated by the system’s output. The program was built using resumes the company had received over the preceding 10 years, most of which were, unbeknownst to Amazon, based on male proles. Because of this, the AI system “learned” to favor male candidates over female ones, creating a gender disparity in hiring. Similarly, systems like ChatGPT are trained using internet data and, as a result, may reect and preserve societal biases that exist in websites, online books, and other sampled content from which it draws information. When relied upon to make certain employment-related decisions, such as those related to hires, promotions, and terminations, AI technologies based on poor datasets risk running afoul of employment and civil rights laws. If an ADT or other AI technology generates an adverse impact on a particular protected group, the Equal Employment Opportunity Commission (EEOC) has advised that employers will face liability under Title VII, even in instances where the employer was not directly responsible for the development of the program or where the program was administered by an outside agency. In addition to concerns over systemic bias, AI users have been faced with another data-related concern, with respect to AI-manufactured misinformation. This concept has come to be known as AI “hallucinations,” which arise when an AI system self-generates inaccurate or misleading information that is then presented to consumers in a plausible- sounding manner. Some of the starkest illustrations of the types of negative professional consequences that can result from AI hallucinations have been seen in the legal profession. Since 2022, there have been multiple reports of attorneys being caught using LLMs to write legal briefs where the AI system simply invented legal precedents and court citations that do not exist. Obviously, citing fake cases in an ofcial legal brief is one of the most damaging things a lawyer can do, and these cases have generally resulted in disciplinary measures for misconduct and signicant reputational damage. Company information that is entered into third-party AI platforms will “live forever” outside of corporate control.

2025 Workforce Insights Guide 48Employers who make use of AI technologies to understand or interpret complex employment-related laws without sufcient oversight risk consuming this type of misinformation and similarly exposing themselves to signicant liability. Balancing Future Potential with Present Risk Recent advances in the capabilities of AI technologies have given us a glimpse of an incredibly promising future. Generative AI has come a long way in a short time, and it is quite possible that employers will eventually be able to ofoad large amounts of labor onto these programs without needing to worry about security, condentiality, bias, and the other areas of concern outlined above. However, the current state of generative AI is far from perfect. The uncertainties surrounding the reliability of AI datasets and decision-making processes merit a cautious and thoughtful approach from even the most tech-forward businesses. Without adequate human oversight, integrating such programs into corporate processes could expose employers to a high degree of legal risk. In the present moment, HR professionals should seek to implement appropriate checks on any automated systems in order to strike a balance between the benets of workplace automation and the good judgment of compliance-conscious human employees.

2025 Workforce Insights Guide 49Employees are the backbone of any organization. Managing a business and its workforce is becoming more complex with each passing year. As new challenges are piled on top of perennial problems, even the most resourceful employers can become overwhelmed. We strive to help our clients understand what matters the most to their employees, take the guesswork out of attracting and retaining talent, and design cost-effective total rewards strategies. Founded in 2000 and headquartered in Atlanta, OneDigital provides interdisciplinary guidance to over 75,000 employers and millions of individuals. Connect with our team of erce advocates to start building a culture of health, success, and nancial security for your company. About OneDigital OneDigital® is a registered trademark of Digital Insurance LLC (“OneDigital”) and is the marketing name used by Digital Insurance LLC and its afliates to market their products and services. Each company has nancial responsibility only for its own products and services. Investment advisory services offered through OneDigital Investment Advisors, a wholly owned subsidiary of OneDigital.

2025 Workforce Insights Guide 50Contributors » Alex Camosci — Managing Consultant, OneDigital Stop Loss Center of Excellence » Amber Jamison — Clinical Services Manager, OneDigital Pharmacy » Cassandra Schlarb — Regional Vice President, Risk and Analytics, OneDigital Employee Benets » Eric Niermeyer — Content Marketing Specialist, OneDigital » Faviana Copeland — Vice President of Growth Strategy, OneDigital » Jay Interlande — Senior Benets Consultant, OneDigital Employee Benets » Jessica Gomez — Human Resources Client Executive, OneDigital HR Consulting » Joanna Evans — Senior Benets Consultant, OneDigital Employee Benets » Jonathan Theders — Principal, Senior Client Executive, OneDigital Property and Casualty » Kim Adams — Regional Director of Client Services, OneDigital Employee Benets » Maelyn Morrison — Human Resources Consulting and Benets Counsel, OneDigital Compliance Consulting » Nauman Shaikh — Vice President, Risk and Analytics » Richard Lo — Director of Clinical Services, OneDigital Pharmacy » Samantha Malovrh — Vice President of OneDigital Compliance Consulting » Scott Honer — Loss Control Consultant, OneDigital Property and Casualty » Scott Wham — Regional Director of Compliance and Innovation, OneDigital Compliance Consulting » Sean Nehlsen — Managing Principal, Human Resources, OneDigital HR Consulting » Shira Wilensky — Director of Engagement, OneDigital Health & Wellbeing » Travis Dommert — Senior Vice President of Talent, OneDigital » Vinay Gidwaney — Chief Product Ofcer, OneDigital

2025 Workforce Insights Guide 51Endnotes1. “U.S. Engagement Hits 11-Year Low.” Gallup, April 10, 2024.2. “Employment Projections: 2022-2032 Summary.” Bureau of Labor Statistics, August 29, 2024.3. “US obesity rates have tripled over the last 60 years.” USAFacts Team, March 21, 2023.4. “About Obesity.” Centers for Disease Control and Prevention, January 23, 2024.5. “What to know about Zepbound, Eli Lilly’s new weight loss drug.” NBC News, November 9, 2023.6. “Employer Coverage of GLP-1 Drugs Jumps.” Society for Human Resources Management, June 18, 2024.7. “Employers Grapple with Claims Costs versus Outcomes of GLP-1 Drugs.” International Foundation of Employee Benet Plans, September 9, 2024.8. “Employer coverage for weight-loss drugs rises sharply, survey nds.” Reuters, June 14, 2024.9. “Insured losses from severe thunderstorms reach new all-time high of USD 60 billion in 2023, Swiss Re Institute estimates.” Swiss Re Group, December 7, 2023.10. “U.S. Billion-Dollar Weather & Climate Disasters 1980-2024.” NOAA Center for Environmental Information.11. “Google Engineer Claims AI Chatbot Is Sentient: Why That Matters.” Scientic American, July 12, 2022.12. “Preventive care falls short: Only 8% of U.S. adults receive all appropriate services.” Fierce Healthcare, June 7, 2018.13. “Chronic Disease Prevalence in the US: Sociodemographic and Geographic Variations by Zip Code Tabulation Area.” Centers for Disease Control and Prevention, February 29, 2024.14. “Fast Facts: Health and Economic Costs of Chronic Conditions.” Centers for Disease Control and Prevention, July 12, 2024.