More than three-quarters (77%) of UK small and medium-sized enterprises (SMEs) plan to revamp their employee benefits to attract and retain talent, address workforce challenges, and tackle economic pressures, according to research by Howden Employee Benefits.
Its Employee benefit trends in UK SMEs report, which surveyd 901 UK SMEs, also found that while 85% of respondents offer some form of workplace pension, 15% are failing to comply with pension legislation. Meanwhile, 53% provide private medical insurance (PMI) and 49% offer mental health support.
Half (50%) said that financial challenges are the biggest issue impacting the workforce currently, while 29% said that recruitment and retention are also significant challenges. As a result, 47% are prioritising flexible benefits, 46% are expanding mental health support, and 43% are boosting PMI access to provide faster access to healthcare services.
Furthermore, 40% are enhancing pension contributions to strengthen employees’ retirement security and to address pension inadequacies. Two-fifths (38%) are adding gym membership or lifestyle discounts, 36% are exploring critical illness insurance, and 31% are considering group life assurance.
The report also highlighted that jobseekers prioritise pensions, healthcare and mental health support when choosing employers and that organisations are listening to current and future employees’ wants and needs, with SMEs most likely to be planning changes to these three benefits.
Cheryl Brenan, managing director of Howden Employee Benefits, said: “The research shows that many businesses understand that offering comprehensive benefits can be a powerful tool to improve employee wellbeing, reduce absenteeism, drive productivity, and strengthen the recruitment and retention of talent.
“Now that SMEs face higher employer national insurance contributions (NICs) and increased tax bills further to the recent Budget, they can address both these challenges and the UK’s retirement shortfall by implementing salary sacrifice [arrangements], if they don’t already. Investing in the right benefits can lay the foundation for a more productive and resilient workforce.”
