1 day Ago By Firstpost
Workplaces have changed so much in the last decade. With technology evolving so quickly, companies are finding new ways to meet their employees’ needs. One of the most exciting tools making this possible is artificial intelligence (AI), especially when it’s paired with employee engagement and experience.
As we step into 2025, AI isn’t just helping HR teams—it’s transforming the way employee benefits work. Take this for perspective: the global market for AI in Human Resources was valued at $4.2 billion in 2023 and is expected to skyrocket to $20.
84 billion by 2030. Here in India, the HR tech market was at $1.04 billion in 2023 and is set to double by 2032.
With the government’s increasing focus on AI in the upcoming 2025-26 budget, this growth will only get faster, opening up exciting possibilities for HR and employee benefits. AI is changing how benefits are designed. It’s no longer about offering the same benefits to everyone.
With AI, companies can tailor benefits to match what each employee really needs. By analyzing data like demographics, preferences, and career stages, AI helps employers create benefits that feel personal and relevant. Imagine an employee early in their career being offered access to fitness subscriptions or mindfulness apps to help them build healthy habits, while someone with more experience is provided with wellness retreats or tailored health coaching to support their lifestyle and long-term well-being.
AI can even adjust these offerings in real-time, ensuring employees always get value from their benefits. This approach doesn’t just make employees happy—it keeps them engaged and motivated. Managing benefits can be a headache.
Manual processes often lead to mistakes, delays and frustration. Tech is solving this by introducing flexible benefit wallets, where each type of benefit is allocated its own wallet. Employees can redeem benefits directly from these wallets without the hassle of submitting bills or waiting for reimbursements, saving time and reducing errors.
AI tools also send helpful reminders, like nudges to use available wallet balances before deadlines or explore underutilised perks to ensure maximum utilisation. Chatbots powered by AI further simplify the process by answering employees’ questions and guiding them through the available options. It’s all about making things easier and more efficient for both employees and HR teams.
Employee well-being is a top priority now, and AI is making it easier to design programmes that work. By analysing anonymous health data and engagement patterns, AI can highlight what’s really needed—whether it’s stress management workshops or fitness challenges. For example, if a department is showing signs of burnout, AI can recommend specific activities to improve mental health.
These targeted efforts not only boost employee morale but also lead to better productivity and lower turnover. Yearly surveys often miss the mark when it comes to understanding employees. AI fixes this by enabling real-time feedback collection and analysis.
Tools powered by AI can pick up on sentiments in surveys, emails, or app comments, offering insights HR teams can act on immediately. For instance, if employees are unhappy with a particular benefit, AI can alert HR to rethink and improve it. This constant feedback loop ensures that employees feel heard and valued, while companies stay responsive and proactive.
India’s AI industry is set to hit $17 billion by 2027, thanks to investments in digital infrastructure and advanced technologies. The 2025-26 budget is likely to bring significant support for AI research, which will help HR teams adopt these tools more seamlessly. With AI, companies can track the success of their wellness programmes, predict future trends in benefits and make decisions based on real data.
It’s a game-changer for both employees and employers. One of the most exciting trends for 2025 is the rise of Agentic AI. This next level of AI doesn’t just follow instructions—it learns and makes decisions.
For HR, this means AI tools that can identify lifestyle preferences, recommend wellness initiatives tailored to individual needs, and even predict future trends in employee well-being based on their activity patterns and engagement with current programmes. At the end of the day, AI isn’t just about technology. It’s about people.
By using AI to create personalized benefits, simplify processes, and focus on well-being, HR leaders can build workplaces where employees feel valued and supported. Looking ahead, the message is clear: AI-driven analytics is not just a buzzword—it’s the future of employee benefits. Companies that embrace this today will be the leaders of tomorrow.
The author is CEO and Co-founder, AdvantageClub.ai. Views expressed in the above piece are personal and solely those of the author.
They do not necessarily reflect Firstpost’s views..
