Over the last decade, escalating health care costs, historically low interest rates and an aging workforce have made employee benefits much more expensive, while historically low productivity growth has kept compensation budgets lean, according to a Willis Towers Watson analysis.

The analysis, Shifts in Benefit Allocations Among U.S. Employers, found the total cost of employer-provided benefits—health care, retirement and postretirement medical—rose from 14.8% of pay in 2001 to 18.3% of pay in 2015, a jump of 24%. During this period, health care costs for active employees more than doubled, rising from 5.7% to 11.5% of pay. Conversely, total retirement benefits, which include defined benefit (DB), defined contribution (DC) and postretirement medical plans (PRM), declined by 25% between 2001 and 2015, from 9.1% to 6.8% of pay.

Willis Towers Watson says the reason retirement costs declined is that over that period, many employers shifted away from DB plans as their primary retirement vehicle, typically replacing them with an enhancement to the existing DC plan. In fact, DC benefits increased by 1.6 percentage points between 2001 and 2015, which wasn’t enough to replace the 2.9 percentage-point loss in DB plan benefits. Eliminating PRM for new hires and reducing employer subsidies also played a role in reducing overall retirement cost, as PRM values declined by one percentage point over the analysis period.

These trends reflect a seismic shift in the allocation of benefit dollars, Willis Towers Watson says. In 2001, active health care costs comprised about two-fifths (42%) of benefits while retirement benefits made up the remaining three-fifths (58%). By 2015, the ratio had flipped, with active health care benefits accounting for slightly less than two-thirds of costs (64%) and the retirement share dropping to slightly more than one-third (37%).

Willis Towers Watson’s Global Benefits Attitudes Study (GBAS) has surveyed employees about their attitudes, preferences and behaviors around their benefits, health and finances. The 2015/2016 survey results are based on 4,721 full-time U.S. employees. The survey results suggest a disconnect between employees’ primary concerns, needs and preferences and the reshuffling of employer dollars.

Roughly half of responding employees say they often worry about their financial future, rising to 55% for Millennials. Many Millennials do not expect to receive the same level of retirement benefits enjoyed by older workers, and three-quarters assume that their generation will be worse off than their parents’ generation.

Why should this matter to employers? Willis Towers Watson notes that employees bring their anxieties and distractions to work each day, where their worries impair performance, trigger lost days, raise stress levels and ultimately drag down productivity.

Employees’ financial concerns can also create longer-term problems for employers. Employees who are worrying about the future or struggling financially—which include 42% of the typical workforce—are more likely to continue working well past their preferred retirement age. Forty-four percent of older workers (ages 55 and older) who are concerned about their future finances and 64% of those who are struggling financially expect to work to age 70 or later. In addition, nearly half of financially struggling older employees feel stuck and would retire if they could afford to do so. It’s clear financial issues are impacting employee performance in a big way and the toll is ultimately a drag on business results, the firm says.

“With the shift from DB to DC plans well established, employers may want to reevaluate the allocation of benefit dollars to better respond to employees’ needs and concerns,” says Alexa Nerdrum, senior retirement consultant at Willis Towers Watson. “This could consist of more tax-efficient saving mechanisms, such as the broader use of health savings accounts, as well as wiser spending on health care. While the solution for each organization will be unique, employers need to balance cost with the long-term returns on providing benefit packages that will be highly valued by their workers.”