The Hidden Costs of Workforce Inefficiencies (And How to Fix Them)

Every benefits and HR leader knows that making the right workforce investments is critical—but how do you know if those investments are actually delivering value?

With inflation, rising healthcare costs, and increasing employee expectations, employers are under more pressure than ever to maximize every dollar. Yet, many organizations continue to pour money into benefits, compensation, and workforce programs without clear insight into whether those investments align with employee needs. The result? Rising costs, underutilized programs, and a disengaged workforce.

Take the case of a mid-sized employer in the professional services industry. They were facing the all-too-common challenge of increasing healthcare costs while struggling with low benefits utilization. Upon closer examination, a survey of their workforce revealed that employees were more concerned about financial wellness than healthcare access. With a predominantly younger, healthier employee base, medical plan usage was low, but financial stress was high. This disconnect meant that the company was investing heavily in medical benefits their employees weren’t using, while overlooking an opportunity to provide more relevant financial support. Without a unified approach to benefits data and workforce insights, they were stuck in a cycle of escalating costs and employee disengagement.

Why Workforce Inefficiency is So Costly

Workforce inefficiencies often stem from a lack of visibility into how employee benefits – including healthcare and financial/retirement program – and compensation programs align with employee needs. Employers are making strategic decisions about their workforce investments without the right data, leading to several challenges:

• Misaligned Benefits Strategy – Without clear insights, employers risk investing in programs that employees don’t find valuable, leading to low engagement and wasted dollars.
• Siloed Decision-Making – Information is often spread across different platforms and providers, making it difficult to see the full picture and make informed decisions.
• Escalating Costs Without ROI – With healthcare premiums rising and employees expecting more from their benefits, misaligned investments create financial strain on both employers and employees.
• Fragmented Workforce Planning – Without a unified view, HR and finance teams struggle to coordinate benefits, compensation, and retirement strategies in a way that drives real business value.

For our professional services employer, this meant missing a critical opportunity to reallocate resources in a way that truly benefited employees. Instead of increasing spending on underutilized medical benefits, they could have redirected those dollars to initiatives like enhanced 401(k) matching, student loan assistance, or financial wellness programs—benefits that employees actually valued.

A Smarter Approach to Workforce Planning

Many platforms provide visibility into plan data, but what sets OneDigital’s Impact Studio apart is its ability to bring together traditionally separate programs—employee benefits, retirement, compensation, and total rewards—into a single, streamlined platform. Employees experience these as a comprehensive package, and now, employers can manage them the same way. Instead of making siloed decisions, Impact Studio helps employers optimize their full wallet of investible workforce dollars by offering:

• A Unified View of Workforce Investments – Impact Studio consolidates benefits, retirement, compensation, and total rewards data in one place, breaking down barriers between different programs.
• AI-Driven Insights – Instead of simply presenting raw data, Impact Studio’s AI-powered storytelling and data visualization tools translate workforce trends into clear, strategic action steps.
• Long-Term Strategic Planning – Employers can forecast workforce investment impacts over a five-year horizon, allowing them to proactively align benefits, compensation, and total rewards with evolving business goals and employee needs.

The Bottom Line

Workforce inefficiency isn’t just an administrative headache—it’s a costly problem that directly impacts both employee well-being and an organization’s bottom line. Employers who take a data-driven, unified approach to benefits and workforce planning can break the cycle of misaligned investments and rising costs.

With OneDigital’s Impact Studio, employers gain a consultant-led platform that combines expert guidance with a centralized system to track and manage total workforce spending across health and benefits, retirement, wages, and salaries. By leveraging AI-driven insights and strategic consulting, businesses can make smarter, more forward-looking decisions that align workforce investments with long-term business objectives—leading to better outcomes for both employees and the organization.

Want to see how a more strategic, data-driven approach to workforce planning can transform your business? Let’s start the conversation.