Employee benefits will come under increased scrutiny in 2025 as the cumulative effect of pressures from 2024โs Autumn Budget start to bite, according to GRiD the industry body for the group risk sector. In other words, employee benefits will need to offer more value for staff and the business to be meaningful and affordable.
The National Insurance (NI) employer tax rise and the increase in the minimum wage must be factored into budgets from April 2025, which means that all areas of expenditure, including employee benefits, will be closely monitored.
GRiD points out that as a consequence, employers will demand more value from their employee benefits spend. Where benefits clearly demonstrate good utilisation rates, staff engagement, and an obvious benefit to the business itself, they will be retained – or introduced – but it warns that the opposite is also true: benefits will be at risk when they are not understood, utilised or providing value.
Katharine Moxham, spokesperson for GRiD, said: โWe would urge all employers to ensure they fully understand the benefits that they currently offer, to monitor their use, and ensure employees are aware of the breadth and depth of support available. Where benefits are shown to be effective they will be retained. However, many companies will be looking to make savings to account for the increased costs of employing staff. As a result, benefits will be at risk if there is not sufficient evidence to support their continuation.โ
Employee benefits will need to demonstrate more value to attract
GRiD also predicts that benefits which clearly offer value will be some of the most sought-after in 2025. This will include group risk benefits (employer-sponsored life assurance, income protection and critical illness), as not only are they valued for the financial payment to employees in times of need, but also for the increasingly enhanced embedded benefits which support a return to work, prevention, and early intervention across physical, mental and financial health.
Katharine Moxham continues: โHR teams should start to gather the data they need now, to put forward the business case for the benefits that support the welfare of staff. They need to show not only uptake of benefits, but also the positive impact on the business itself. However, this also represents a great opportunity for the HR department to demonstrate its accountability and commerciality.โ
What are the most popular employee benefits?
According to HR magazine, the most popular benefits in recent years have been lifestyle savings (such as savings on shopping, holidays or eating out), salary sacrifice benefits like cycle to work schemes, home electronics and cars, or virtual GP options and employee assistance programmes (EAPs).
The HR directors surveyed by Nous referenced flexible working, enhanced pension benefits, enhanced holiday leave, private health and dental care, and free food or drink at work as the most popular benefits their organisations offered.
ย More about GRiD
Group Risk Development (GRiD) is the industry body for the group risk sector, promoting the value to UK businesses of providing financial protection for their staff, enhancing their well-being and improving employee engagement. Our membership includes insurers, reinsurers, intermediaries and those operating in (or with other interests in) the UK group risk market. Together this forms a collective wealth of experience built over many years. Under the chairmanship of Colin Fitzgerald ย (Distribution Director โ Group Protection, L&G Retail) GRiD aims to promote group risk through a collective voice to Government, policymakers, stakeholders and employers.
GRiD works with government departments and regulators involved in legislation and regulation affecting group risk benefits, and with other organisations involved in the benefits and financial protection arenas. GRiD also seeks to enhance the industry’s standing by encouraging best practice and by participating in industry-wide initiatives such as the professional qualification in group risk managed jointly with the Chartered Insurance Institute.
