77% of SMEs plan overhaul of employee benefits to combat economic pressures

News
Joanne Swann
Man holding a box
Man holding a box

Over three-quarters (77%) of UK small and medium-sized enterprises (SMEs) surveyed plan to revamp their employee benefits packages to attract and retain top talent, address workforce challenges and tackle economic pressures, according to Employee Benefit Trends in UK SMEs, a new report from Howden Employee Benefits, in partnership with YouGov.

SMEs focus on reviewing benefits, especially the potential inclusion of preventative health and wellbeing solutions, is particularly timely. Sickness absence rates have reached a 15-year high, with 104.9 million workdays lost in 2023 due to long-term health conditions[i].

Key Findings:

  • Benefits Gaps: While 85% of SMEs offer some form of workplace pension, the findings suggest that 15% are failing to comply with pension legislation, exposing them to potential fines. Only 53% provide Private Medical Insurance (PMI) and 49% offer mental health support.
  • Economic Strain: Half of SMEs [50%] report financial challenges as the biggest challenge impacting the workforce currently, with the cost-of-living crisis and rise in employer National Insurance contributions (NICs) announced in the Budget adding to these strains. Salary Sacrifice schemes, which allow employers to save 15% on NICs for pension contributions, are a cost-effective and tax efficient solution could address these challenges.
  • Flexible Options on the Rise: 47% of SMEs are prioritising flexible benefits, giving employees more choice and the ability to select and customise packages to suit their individual needs—an increasingly vital factor for multi-generational workforces.

What benefit changes are SMEs planning?

  • Healthcare and Wellbeing: 46% are expanding mental health support, and 43% are boosting access to PMI to provide faster access to healthcare solutions.
  • Pension Improvements: 40% are enhancing pension contributions to strengthen employee retirement security and to help address current pension inadequacies.
  • Lifestyle and Financial Perks: 38% are adding gym memberships or lifestyle discounts, while 36% are exploring Critical Illness Insurance, and 31% are considering Group Life Assurance.

Recruitment Challenges are driving change.

29% of SMEs admit that recruitment and retention are significant challenges and offering competitive benefits is now essential to retain top talent. The report also highlights that Jobseekers prioritise pensions, healthcare, and mental health support when choosing employers. This suggests that businesses are listening to the wants and needs of current and future employees with SMEs most likely to be planning changes to these three benefits.

Mark Fosh, Executive Director of SME at Howden Employee Benefits, said:

With 5.6 million SMEs at the heart of the UK economy, their success is vital. Despite rising operational costs and National Insurance contributions, SMEs still have practical options to address these challenges. By adopting salary sacrifice schemes and working with an employee benefits consultant to review and optimise their benefits packages, businesses can ensure they’re getting the best value for money while accessing additional value-added services. These steps can provide immediate financial relief, result in a better experience for employees and build a stronger, more engaged workforce.

Mark Fosh, Executive Director of SME at Howden Employee Benefits

Joanne Swann, Content Manager, WorkWellPro
Editor at Workplace Wellbeing Professional | Website |  + posts

Joanne is the editor for Workplace Wellbeing Professional and has a keen interest in promoting the safety and wellbeing of the global workforce. After earning a bachelor's degree in English literature and media studies, she taught English in China and Vietnam for two years. Before joining Work Well Pro, Joanne worked as a marketing coordinator for luxury property, where her responsibilities included blog writing, photography, and video creation.

Share

Latest News

Latest Analysis

Related Articles

Half of Bereaved Employees ‘Managing Death Administration During Work Hours’

Half of UK employees who have lost a loved one are handling practical bereavement-related tasks during their working day, according to new research.

Top Usa Real Cash Casinos 2026 Verified By Experts

Discover the top USA real cash casinos verified by experts in 2026. Compare licensed online casinos offering generous bonuses, thousands of slots, live dealer games, and secure banking options for American players.

Why UK Players Are Flocking to Online Casinos Outside GamStop

UK players are increasingly choosing unregulated offshore casinos over GamStop-licensed sites to access bigger bonuses, faster payouts, and fewer gameplay restrictions like spin-speed limits. While these non-GamStop platforms offer greater freedom and higher welcome packages, they lack UK Gambling Commission protections, making operator reputation and licensing verification essential for safe play.

Why Non Gamstop Casinos Are Pulling UK Players Away From the High Street

Unregulated non-Gamstop casinos are attracting UK players with higher betting limits, larger bonuses exceeding 500%, and access to thousands more games than licensed operators. However, players lose UK consumer protections and must independently verify operators and manage their own responsible gambling tools.
Previous article
Dr Glenn Mason: Supporting financial wellbeing in the workplace
Next article
89% of employers seek better insight into employee wellbeing risks