BY: PFMA Member Gallagher
The employee benefits landscape continues to evolve rapidly as employers face rising healthcare costs, increased employee expectations, and ongoing workforce challenges. For employers in Pennsylvania’s food and beverage industry, these pressures are particularly significant. Restaurants, food manufacturers, distributors, breweries, and beverage companies are competing for talent in a labor market where benefits have become a critical differentiator rather than simply an added perk.
One of the most pressing challenges is the continued rise in healthcare costs. According to the Kaiser Family Foundation’s 2025 Employer Health Benefits Survey, average annual family health insurance premiums reached nearly $27,000, reflecting a 6% increase over the previous year. Employees are also contributing larger portions toward coverage costs, while deductibles continue to rise. For Pennsylvania food and beverage employers, many of whom operate on narrow profit margins, these increases are creating difficult budget decisions. Businesses are being forced to balance competitive benefit offerings with the need to control operating expenses and maintain profitability.
At the same time, employers are experiencing continued workforce pressures. Pennsylvania business groups report ongoing labor shortages and a shrinking pool of qualified workers. The Pennsylvania Chamber notes that for every 100 open jobs in the state, only 77 qualified workers are available to fill them. Although labor market conditions have stabilized somewhat since the peak shortages of the post-pandemic years, employers in hospitality and food service continue to face recruitment and retention challenges. As a result, benefits have become a key component of attracting workers who may have multiple employment options.
Employee expectations have also changed significantly. Traditional benefits such as medical, dental, and retirement plans remain important, but employees increasingly value flexibility, mental health support, and work-life balance. SHRM’s 2025 Employee Benefits Survey found that health-related benefits remain the highest priority for employers, while leave benefits, retirement plans, flexible work arrangements, and family-care support continue to grow in importance. Workers are looking for employers that support their overall well-being, not just their compensation.
For food and beverage employers, this trend presents both an opportunity and a challenge. Many positions in manufacturing facilities, distribution centers, restaurants, and production environments cannot be performed remotely, limiting flexibility options. Consequently, employers are increasingly offering alternative benefits such as predictable scheduling, expanded paid time off, wellness programs, employee assistance programs, and mental health resources. Growing awareness of workplace stress and burnout has also increased demand for accessible mental health benefits.
Another emerging trend is the increased focus on strategic benefit design. Employers are evaluating self-funded and level-funded health plans, voluntary benefits, and customized benefit offerings to better manage costs while maintaining employee satisfaction. Industry surveys indicate that rising benefit costs remain the top concern influencing employer benefit strategies, leading many organizations to reallocate spending toward programs that provide the greatest value and retention impact. For larger Pennsylvania food and beverage manufacturers, these approaches may help control expenses while maintaining competitive offerings.
Ultimately, the current state of employee benefits reflects a broader shift in the employer-employee relationship. Benefits are no longer viewed solely as a cost of doing business but as a strategic investment in workforce stability and organizational performance. Pennsylvania food and beverage employers are feeling the effects through higher healthcare expenses, increased competition for talent, and growing demands for comprehensive well-being support. Organizations that successfully adapt by offering meaningful, cost-effective benefits will be better positioned to attract skilled workers, reduce turnover, and remain competitive in an increasingly challenging labor market.
At Gallagher, we are committed to optimizing our clients’ employee benefit programs by leveraging our internal centers of excellence, creating strategic partnerships in the PA market, and delivering on the highest quality of service. Our centers of excellence focuses on addressing compliance, underwriting / early renewal projection (for advanced budgeting purposes), funding analysis (self-funded vs. fully-insured), enrollment services, personalized communication, and a dedicated support team. By having all of these areas strengthened, we are able to shield our clients from the pressures being exerted on employers in the broader market.
If you would like to have a discussion about any of the market pressures listed above, please don’t hesitate to contact me at Robert_stoudt@ajg.com or 717-475-6206.