Recruiting enough qualified workers, retaining existing talent, and managing rising costs are among the biggest challenges facing UK organisations right now, according to Ciphr.
According to 300 UK HR decision-makers who shared their views on the most pressing workplace issues for their organisations in the year ahead, recruitment and attracting and engaging skilled candidates was revealed as the biggest worry, with 29% calling it a major challenge.
Meanwhile, a similar number of respondents, around 28%, expect employee retention to prove challenging, while 27% are bracing for rising costs and budget squeezes.
Additionally, 26% believe their organisation may struggle to deliver on employees’ remote or hybrid working expectations.
Elsewhere, using AI, pay rise requests and staying compliant were tied for fifth place in Ciphr’s poll. One in four HR professionals anticipate difficulties with ensuring good AI practices, meeting salary expectations in a continuing cost-of-living crisis and getting ready for the sweeping reforms of the Employment Rights Bill.
Other concerns included providing employees with regular training and development (23%), a good work-life balance (23%), an inclusive workplace (22%) and new benefits and rewards (22%).
The research also found that Employers’ top priorities when it comes to their workers was providing a good range of employee benefits cited by 46% of respondents.
Meanwhile, 45% said ensuring a positive, respectful and healthy work environment / culture and the same number said providing flexible working / a good work-life balance for employees.
Other suggested priorities include paying a good / fair average wage at 42%, providing regular employee training, upskilling opportunities, and career advancement at 42% and ensuring all employees are treated fairly and equally, with no favouritism at 41%.
Ciphr chief people and operations officer Claire Hawes says: “It’s interesting to see how close the top five results were, with just one percentage point difference between each one. Although recruitment and retention continue to make headlines, Ciphr’s research highlights that HR leaders have many other, equally concerning, challenges to navigate – including AI, the impact of tighter budgets, complex regulatory changes, salary inflation, and continuing RTO/WFH demands. With such a range of challenges, it’s not always clear where to focus your efforts.
“Yes, there’s the challenge of attracting the right talent. But that’s only ever half the battle – keeping people engaged, supporting them and enabling them to grow in their roles, while meeting their pay expectations, is often another challenge again.
“Employers must prioritise creating a compelling employee value proposition (EVP), which covers every aspect of the employee experience. Be led by your data – use feedback from existing employees, of all ages, and recent leavers to understand what needs to improve. Maybe it’s your benefits, maybe it’s clearer career pathways or maybe it’s more transparent communications. Make the changes you can and measure the impact.
“Operational resilience is contingent on how well organisations can balance rising costs with strategic investment in their people. Because the firms that put their people first will, I believe, be best placed to adapt and succeed in 2026.”
Avantus Employee Benefits (part of the Ciphr Group) MD Phil Curtis says: “Employers who embrace flexible benefits – giving people greater autonomy to choose the benefits they genuinely want – have seen staff retention rates improve. So, it’s no surprise that having a good range of employee benefits tops the list of priorities for UK employers looking to support their employees’ physical, mental and financial wellbeing.”
“A scattergun approach to reward strategy simply doesn’t cut it anymore. Experience tells us that job seekers have become progressively more discerning, especially since the pandemic. They look beyond the headline salary when weighing up employment opportunities and they want to feel fairly rewarded for the value they bring to an organisation. Personalised benefits is an essential part of that.”
He adds: “Investing in new benefits and rewards can be a challenge but doesn’t necessarily need huge budgets. Much can be done without additional cost, especially when salary sacrifice benefits are introduced. It’s also worth revisiting the value of certain core benefits, as it may be possible to unlock budget in this area with some creative thinking, targeting spend more effectively.
“Employees aren’t always totally aware of what benefits they may already have access to. Regular internal comms can help remind them about any benefits they may have missed, while dynamic total reward statements are a great way to illustrate the true value of their benefits packages.”
