Employers must examine the risks they are attempting to mitigate with their benefits provision instead of just offering employees as many benefits as possible, Mercer believes.
The consultancy claimed that organisations needed to take a step back and look at the overall business aims of their benefits package.
It questioned why firms had not changed how they were viewing their benefits given that innovations in technology, a changing workforce and an unstable economic environment have changed how employers manage their people.
Mercer partner Gary Simmons, said: "The key is helping employers to stand back and understand what measures to take to get the most out of their benefits offering.
"Companies need to know which benefits encourage employee wellbeing, drive profitability and productivity, and which benefits minimise risk, and support business continuity and strategy. The problem we're seeing at the moment is the idea that it is enough to simply give employees choice.
"In practice, employers need to look more closely at the risks they are attempting to mitigate for themselves and their workforce. Not only must companies recognise the varying needs of their workforce, but also take a long hard look at the added value of their benefits both separately and holistically.
"If companies don't start thinking ahead now, they will soon find that their benefit programmes are no longer fit for purpose and they can ill afford in today's economic environment to waste precious cash and resources," he added.
