Just under three-quarters (69%) of leaders at small and medium-sized enterprises (SMEs) are using AI tools, such as ChatGPT, to shape their employee benefits strategy, according to research by insurance broker Lockton.
Its From gut-feel to data-driven: Overcoming blind spots in SME benefits strategy report, which surveyed 1,000 senior decision makers responsible for employee benefits at UK SMEs, also found more than three-quarters (77%) of respondents feel guilty about whether their benefits strategy is doing enough to support their team.
Two-fifths (40%) believe their benefits package needs significant improvement, while 9% have never used AI. Only 12% had sought guidance from a broker or trusted adviser, although 39% cited this as the type of support that would give them confidence.
Three-quarters (75%) admit that decisions relating to employee benefits are influenced more by personal or leadership experience, rather than staff feedback or performance data. While 94% feel comfortable responding to employee requests, only 46% feel very confident in their long-term benefits strategy.
Just 39% feel able to act independently without external guidance, citing conflicting advice (31%), time pressures (31%), and fear of making mistakes (29%) as preventing them from making decisions.
Staff feedback (61%), practical tools (41%), and trusted advisers (39%), were all cited as key factors that could help SME leaders act with clarity and confidence, while 61% believe with the right guidance they can deliver benefits that match or exceed the offering from larger employers.
Stewart Waddy, head of SME consulting and production at Lockton, said: “Right now, many are leaning on AI as a digital safety net, but it can only do so much. What feels like efficiency can easily deliver short-term fixes that fail to address employees’ real needs. It can’t replace the tailored advice and planning needed to build benefits strategies that truly support employees and their businesses.
“Providing compelling, inclusive employee benefits doesn’t have to be about spend. It’s about strategy, alignment, and visibility. SMEs are nimble, they can move quickly to build proactive strategies that adapt to their people’s needs. If they succeed, they won’t just avoid wasted spend, they will build workplaces where benefits genuinely deliver on their promise of showing people they are valued.”
