As businesses prepare to absorb the additional costs introduced in last year’s Autumn budget, they are expected to scrutinise the value of their employee benefits more than ever, according to Grid.
From April 2025, employers must factor in increases in national insurance (NI) contributions and the minimum wage, which will sharpen the focus on all areas of expenditure, including workforce benefits.
To avoid cuts in 2025, the industry body for group risk said HR will need to collect data to clearly demonstrate the worth of employee benefits to staff and the business.
Grid said that products and services that have good use rates, staff engagement, and deliver clear benefits to the business will be retained – or introduced. But the industry body added that any benefits that are not understood, used or providing value could be cut.
Katharine Moxham, spokesperson for Grid, said: “We 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.”
Grid has also said that benefits which clearly offer value will be some of the most sought-after this year. This will include group risk benefits (employer-sponsored life assurance, income protection and critical illness), as they are valued for the financial payment to employees when they need it and for the increasingly enhanced embedded benefits that support a return to work, prevention, and early intervention across physical, mental and financial health.
Moxham said: “HR 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.”
Liz Walker, COO at Unum UK, said: “Group risk benefits and associated added-value services offer a significant positive impact on employee health and happiness. In turn, this boosts workplace productivity, demonstrating how benefits make good business sense. However, financial pressure on businesses may increase when the NI and minimum wage rises come into effect. If hiring people and offering benefits becomes more expensive for employers, they may begin to question the costs.”
Walker said HR can help to combat this by providing clear evidence of the true value of employee benefits. “Once their impact and effectiveness is clearly established, it’s less likely that the important support they offer will suffer from cost-cutting measures.”
She said that one way to achieve this is to boost employee awareness of available benefits, including clear signposting of how to access them, wherever the employee is located.
“When more employees engage with their benefits — particularly proactively, before health conditions can escalate or even occur in the first place — employers will likely see results indicating real underlying value,” she added.
Walker said that providers should make it “as easy as possible” to demonstrate the value of their products to employers.
“For example, engagement with added-value services from Help@hand, the health and wellbeing app, can be tracked through consolidated insight reports, including utilisation by health issue, services accessed and number of sessions used.”
