How to build an attractive benefits package on a budget

attractive benefits budget

Need to know:

  • Although flexibility and choice are important, there are some low-cost, go-to starting points, such as employee assistance programmes (EAPs).
  • It can be worth investing in slightly more expensive products or platforms, to derive the best value in the long run.
  • Communication, packaging and position are just as important as having the right benefits.

Bespoke, attractive reward packages are no longer the preserve of an unattainable elite of employers with high profits and deep pockets; as benefits become more varied and accessible, and transparency increases, employees are always aware of where the greener grass lies.

But, if throwing money at the problem is not an option, how can an employer compete in an increasingly demanding market?

Flexible foundations

One trend that seems to have near-universal appeal is the introduction of flexible, remote and home working, where possible. Cost and feasibility will vary from one employer to another, with some having to do very little to set up flexible systems, and others needing to put in considerable investment to overcome operational issues. However, if the work allows for flexibility, it is bound to have widespread appeal and positive results.

Liz Walker, commercial director at Distinctly PR, says: “[Employers should] definitely start thinking progressively around flexible working, really trying to move away from the fixed hours model. Obviously there can be operational hurdles, but in terms of a theoretically cost-neutral [benefit], that should absolutely be top of the list.”

If done properly, flexible and remote working should pay back initial investments through increased productivity and engagement, as well as the ability for organisations to attract a talent pool previously ruled out by traditional working structures.

Tom Hellier, senior client partner at Korn Ferry, says: “It’s the evolution of what is defined as a tangible benefit: over the past few years, there has been more talk about the importance of flexibility and work-life balance.

“That’s not to say people can work from home every now and then, it’s allowing people to work where and when they want, and focusing more on output than necessarily being present in the office. Flexibility is something that’s becoming more of an expectation across all demographics.”

Valued starting points

Flexibility and choice should, arguably, underpin all benefits strategy. Nevertheless, there are also some widely popular, cost-effective initiatives that can be go-to starting points.

The first thing to consider is an employee assistance programme (EAP), which offers 24-hour confidential support on a wide range of topics, from financial guidance to mental health counselling.

David Prosser, head of proposition development at Towergate Health and Protection, says: “[EAPs] are topical, relatively low-cost, and provide support across a range of services. Without doubt [the best starting point is] a good [EAP].”

Employers should also research government-backed benefits, such as bikes-for-work schemes, says Walker. These can be offered at little to no cost to the organisation.

For Rebekah Tapping, group HR director at Personal Group, employers should focus on wellbeing first, as this is universally important. “[Employers] can spend a lot of money on private medical insurance [PMI] and every so often it means a lot to somebody, but actually on a regular basis, things like access to a GP are far more important,” she explains. “Time is a real issue for people.”

A new trend that is fast becoming a valuable linchpin is flexible pay, says Hellier. So far, this has become popular in shift-based, lower-paid industries, such as service and retail, helping staff make their wages work around their needs, and allowing them to access their money as it is earned, through a third-party provider and at little, or no, extra cost to the organisation.

“For [small to medium enterprises (SMEs)] in particular, but also organisations with a higher proportion of lower-paid workers, there’s been an inertia in making changes to the way people are paid because of a fear of a huge cost,” he explains. “But there are things those [organisations] can do that are relatively low-cost and very effective, [such as] pay streaming.”

Value-added benefits

There is more to consider, when assessing cost-effectiveness, than just the price of a product. Employers should look into the value-added elements, and consider the fact that a benefit might be more expensive, but represent a worthwhile investment.

For example, most group risk products will come with an EAP that employees can use without having to make a claim. They can also provide second medical opinions, 24-hour GP services, and behavioural-change apps. There is also an increasing focus on proactive and preventative support, including helping employees return to work, which naturally is a source of saving for the employer when it comes to reducing absence.

Katharine Moxham, spokesperson at industry body Group Risk Development (Grid), says: “Group risk providers have realised for many years that it’s great to give daily value, rather than ‘just in case’ sitting in the background that might never be used.

“These are all sorts of things that in their own right are valuable benefits, alongside whatever else has been purchased for employees, and all really position an employer as caring and wanting to support people through good times and bad.”

Daily discounts

Among those organisations with tight margins and little spare budget, discount platforms can be a quick, effective place to start. Setting up a portal, either built internally or bought via a provider, can present cost or resource challenges, but partnering with local businesses can be a mutually beneficial arrangement, and can even be used to turn a profit.

One of the runners up at the Employee Benefits Awards 2019, for example, was Newcastle Upon Tyne Hospitals NHS Foundation Trust, with its platform Benefits Everyone. The revenue gained from charging businesses to host discounts and vouchers on their site was enough to pay the salaries of the team running it.

Louise Jones, people adviser at Perkbox, says: “(SMEs) can’t compete with big organisations on the traditional benefits packages, [such as] medical insurance, but we sometimes undervalue how important and impactful it is to help employees in the day-to-day. Discounts can help them in their daily lives.”

If looking to attract talent, employers should therefore make sure to promote the daily moments, like help with phone bills and weekly shops, that can build up to a strong package that is highly valued by staff in helping their pay go further.

“[Employers] can reach a much broader scope of what kind of perks and benefits [they] offer through these platforms,” Jones adds. “For example, [they] can have a learning and development platform without having to have a learning and development person.”

Understand the audience

There are clearly some cost-effective, widely popular starting points to consider. Nevertheless, to avoid wasting benefits spend on perks that are unwanted and go unused, organisations must invest time and effort into understanding their workforce.

“Surveys are a really quick, cheap and easy way of getting information, that’s always a good starting point,” says Walker. “Depending on scale, [employers] can look to middle management to get their feel for it and what they feel would help them motivate their employees. Focus groups, committee style, are often effective, but obviously if [an employer is] strapped on resources I wouldn’t necessarily recommend that.”

This can be as much about getting rid of initiatives as picking up new ones, weeding out benefits that are no longer attractive, either as a hangover from a time when they were popular, or due to misguided assumptions about what employees want.

Hellier explains: “If [employers] go out and ask people what it is they actually value, [they might find] that some of the big ticket items [they’re] spending lots on aren’t particularly highly valued, and there are other areas that people would like to be amped up that aren’t particularly expensive.”

This, paired with an understanding of success factors, can help to ensure a sustainable, long-term approach to benefits.

“It’s really about understanding the [business] and understanding the employees,” says Prosser. “What are the objectives in wanting to have an employee benefits package, to reduce absence, improve morale, recruitment or retention? What are the success factors, and how will that be measured?

“The key thing is to be agile about it. Be prepared to review and adapt.”

Delivering the package

Taking lessons from consumer trends, the best packages will be consolidated into one place, preferably digital and mobile tech-enabled, with simple, easy methods of accessing and understanding the benefits.

To this end, it is arguably worth investing in a well-oiled platform, even if this means a slightly higher spend.

“If [employers] want to offer a big package for different types of employees, it does amount to a lot of time and effort,” says Jones. “Having these platforms, [they’re] paying for that to be managed through the platform, which is a big cost-saving [method] in terms of HR time and money. These things make a big internal impact.”

“It’s a valuable thing to invest in [a platform],” adds Hellier. “Benefits still represent a huge cost for most [businesses], so why not put the effort into delivering it better?”

However, it is also worth remembering that this can be done at different cost levels depending on budget. “Have it in a place where people can go and get information, and access it easily,” says Tapping. “In a world with lots of technology and where things are very intuitive, [employers have] to provide that.”


Once an employer has amassed the benefits that are right for its workforce, and ensured that they are accessible and easy to use, the next step in making it attractive without breaking the bank is a considered communications approach.

This once again necessitates an understanding of workforce demographics and preferences, but it is important to employ a range of methods to reach as many people as possible, says Prosser.

Effective benefits communications should also be in layman’s terms, avoiding complex jargon, says Hellier, while Walker recommends allowing for two-way dialogue and questions.

Finally, employers should take the time to link a benefits package to their brand, showing the reasoning, and values, behind each offering.

This might be as simple as linking a free coffee perk with social wellbeing, encouraging staff to use this to spend time with one another away from their desks. “Embed it in the employee life-cycle and organisational rituals,” says Jones.

“The first thing is to understand the mission and values. With that as the foundation, and then benefits and offerings related to that and relevant to the organisation, that will attract people that are aligned with the mission and values.”