Employee Benefits: Everything you need to know
Employee benefits have never been more crucial. Our research into how employers can support staff through the cost-of-living crisis uncovered a clear solution for easing financial pressure on workers: a strong employee benefits scheme.
With 79% of employers and 65% of employees agreeing that benefits are key to managing financial stress, and 83% of chief HR officers highlighting turnover as a significant issue, it’s clear that improving your employee benefits scheme can help you retain talent and support wellbeing. And, with 53% of employees saying their employer could do more, the message is simple: now’s the time to step up and provide the support your employees need.
In this guide, we cover what employee benefits are, which core benefits you can offer, and how to build a flexible employee benefits scheme that supports financial, mental, and physical wellbeing.
In this guide:
- • What employee benefits are
- • Why an employee benefits scheme matters
- • Statutory benefits employers must provide
- • Flexible benefits employees value most
- • How to implement a scheme that gets used
Ready to build a hassle-free employee benefits scheme? Join BHN Extras for free or contact us with any questions. We’re here for you!
What are employee benefits?
The CIPD defines employee benefits as the ‘perks’ an employer offers to supplement a basic salary compensation package (salary, bonuses, and sales commissions).
Essentially, employee benefits are the extras that sweeten the deal, making a job feel worth it beyond pay. They attract and retain talent, boost morale, and show you care. It’s as simple as that.
The two types of employee benefits:
- Statutory employee benefits: mandatory benefits employers must legally provide.
- Voluntary or flexible employee benefits: additional perks employers may offer as part of an employee benefits scheme, including salary sacrifice schemes like Home & Tech and Cyclescheme.
When did Employees Benefits get so popular?
Employee benefits first appeared after the Second World War with state pensions, sick pay, unemployment insurance, and the NHS.
However, employees today expect more than just statutory benefits, especially in a post-pandemic world and during the cost-of-living crisis. People want support that improves financial and mental wellbeing… but while some employers have modernised their employee benefits scheme, many still haven’t, with only 5% of employees saying their employers are doing enough for them.
The good news: offering flexible benefits can be really easy. Here at BHN Extras, the only FREE employee benefits platform, we enable employers to offer a whole range of amazing employee benefits, all easily set up and managed in just a few clicks.
To learn more about BHN Extras, click here to sign up for free or contact us by clicking here.
Why offer a flexible employee benefits scheme?
A well-built employee benefits scheme is a win-win for employees and employers. Here’s why…
Attract the best talent
Our research shows 97–99% of employers believe supporting employees through tough times helps attract and retain talent - and a huge 85% of employees agreed. Plus, 58% of workers are happy to switch jobs for better benefits. Want these people on board? Get a better employee benefits scheme!
Retain your employees
87% of employers agree that benefits that help staff manage living costs can retain talent, and 74% of employees agree. With CIPD reporting high turnover rates in many industries, it seems that many businesses could reduce turnover by implementing employee benefits schemes themselves.
Save money
Offering benefits can lower tax and National Insurance contributions for both you and your employees, as some employee benefits (including all salary sacrifice schemes like Cyclescheme) attract tax allowances to encourage take-up.
Other popular salary sacrifice schemes include discounted Gym Memberships, green car benefit, and savings on home & tech items - these are all benefits made simple and available with BHN Extras.
Improve employee work-life balance
Work-life balance is key to job satisfaction. Extra benefits like flexible working and extended holiday allowance are worth considering in your employee benefits scheme, as they can help improve employee work-life balance. In turn, this helps to reduce stress, boost morale, and improve employee wellbeing and mental health.
Boost employee engagement
Awesome employee benefits schemes benefit employers too, as happy employees work harder, are more engaged, and likely to stay working for you for longer. Healthier employees also take fewer sick days, and the CIPD reports that employee benefits can effectively enhance staff engagement.
Core Employee Benefits You Should Offer
Statutory Pensions
It’s a legal requirement for all employers to join a workplace pension scheme and automatically enrol your employees if they:
- • are classed as a “worker”
- • are aged between 22 and State Pension age
- • earn at least £10,000 per year
- • usually (“ordinarily”) work in the UK
8% of an employee’s monthly wage should be paid into the scheme monthly. Employers must pay at least 3% (but can pay more) while employees generally pay 5% - although some choose to increase their own contributions.
Statutory Holidays and Time Off
Employees are entitled to the following statutory paid annual holiday and time off work:
- • Annual leave: Most employees who work five-day weeks must receive a legal minimum of 5.6 weeks' (28 days) paid leave annually. Employers can include bank holidays as part of statutory annual leave.
- • Maternity leave: Eligible employees can take up to 52 weeks statutory maternity leave. Government guidelines state that employees must take at least two weeks after the birth. Learn more here.
- • Paternity leave: Eligible employees can take either one week or two consecutive weeks leave. Employees may qualify for Shared Parental Leave and Pay. Learn more here.
- • Carers leave: This entitles employees who provide or arrange care for a dependent alongside their paid work to one week unpaid leave per year. Learn more here.
Benefits employees will actually use
Arguably, financial benefits are the most desirable - especially when they help to ease living costs. A smart employee benefits scheme includes everyday savings that are easy to understand and simple to use.
Great examples include:
- • Discounted gift cards: With BHN Extras, employees can save up to 15% with big-name retailers and trusted brands using discounted gift cards.
- • bYond employee cashback card: Employees can earn up to 15% cashback on everyday purchases using our prepaid shopping card, bYond. Available when you join our free benefits platform, BHN Extras.
Home & tech scheme
Home & Tech is another popular salary sacrifice benefit. It helps employees save up to 8% on thousands of items at IKEA, John Lewis and Currys (from furnishings to laptops) and spread the cost interest free. It’s quick to set up, easy to manage, and a great add-on to any employee benefits scheme - and thanks to tax and National Insurance savings, it’s cost-neutral to run!
Flexible health & wellbeing benefits
94% of companies believe employers have a responsibility for employee health and wellbeing. Common options include:
- • Private medical insurance
- • Occupational sick pay
- • Counselling access
- • Wellbeing days
- • Dental insurance
- • Eye care vouchers
Alongside these, companies should consider salary sacrifice schemes that promote health and wellbeing. Two popular salary sacrifice schemes are:
Cyclescheme
Cyclescheme helps staff save up to 47% on a new bike and cycling equipment. It’s an amazing way to support healthier habits and, thanks to employer tax savings, can be cost-positive to offer. It’s free to join and easy to set up too!
MyGymDiscounts
MyGymDiscounts offers employees up to 25% off gym memberships at 4,400+ gyms, leisure centres, health clubs, fitness studios, and bootcamp classes across the UK. There are no admin or payroll approvals either, making it simple to set up and manage. No wonder it’s a real favourite among employers and employees alike!
Green Car Benefit
Moving into travel, Green Car Benefit is another popular salary sacrifice scheme that helps employees buy an ultra low emission vehicle at an affordable monthly amount, with no deposit or risk of depreciation.
It can include the car, insurance, road tax, MOT, servicing, replacement tyres, and more. Thanks to tax and National Insurance savings, it’s an affordable option for employees and a cost-positive benefit for employers - all whilst encouraging sustainability.
To introduce these highly popular BHN Extras perks into your employee benefits scheme, contact us to learn more or click here to get started for free!
Which employee benefit schemes do staff value most?
Our research found that almost a quarter of employees are using benefits more as they navigate rising costs, and it’s the everyday extras - those that ease financial strain and help with cutting everyday costs - that matter most.
Here are the top things employees want support with from an employee benefits scheme:
- Groceries (51%) - Benefits like the bYond cashback card, which can earn up to 15% cashback at many UK retailers including Sainsbury’s.
- Car Commuting (37%) - Benefits like Green Car Benefit help employees save on getting and running an affordable eco-friendly vehicle.
- Technology (30%) - With Home & Tech, employees can save up to 8% on technology and homeware with leading retailers like IKEA and Currys, then spread the cost interest-free over 12 months.
- Gym membership (26%) - MyGymDiscounts supports physical and mental wellbeing with savings on memberships.
Ultimately, different perks suit different employees, so flexibility matters. A varied employee benefits scheme helps avoid underused benefits and wasted budgets, while showing employees you’re listening.
How to implement a successful employee benefits scheme
Offering a successful employee benefits scheme full of perks employees will love and use doesn’t have to be hard - especially with BHN Extras.
We know many companies don’t have the time, budget, or resources to build and manage an impressive benefits programme on their own. That’s why we’re here to help.
BHN Extras offers a range of workplace benefits employees actually want and are easy to manage on our free, easy-to-use platform. It’s trusted by organisations of all sizes, from small start-ups to large enterprises.
With no per-person fee or upfront costs, there’s every reason to join. BHN Extras helps employees save money, eases admin for HR, and keeps benefits simple.
Ready to offer benefits that will actually get used and be appreciated? Join BHN Extras for free today, or chat to us by calling +442074198294 or emailing enquiries@workplaceextras.com.
Employee Benefits Scheme FAQs
What makes an employee benefits scheme “good” for employees? +
A good employee benefits scheme supports everyday life. It helps with real costs, improves financial wellbeing, and fits naturally into an employee’s routine. When benefits feel genuinely useful, they strengthen your overall Employee Value Proposition instead of feeling like filler.
How do I choose the right employee benefits scheme for a mixed workforce? +
Look for flexible benefit provision. A mixed workforce has different priorities, so the best schemes offer a range of options, from savings tools to lifestyle benefits, allowing people to choose what fits their stage of life, role, or working pattern.
How quickly can an employee benefits scheme go live? +
If your scheme is designed for simplicity, it can launch fast. Platforms like BHN Extras are built to support modern business goals, meaning you can often go live in days rather than months, without long setup cycles or heavy internal resource.
How do we get employees to actually use an employee benefits scheme? +
Keep the message clear and human. Explain what it is, how it helps, and how to get started. When benefits are easy to access and clearly support things like everyday savings and commuting, employee perks feel relevant, not optional extras that get ignored.
Can employees choose what they use in an employee benefits scheme? +
Yes, and that choice is essential. The strongest employee benefits package gives people control, so they only use what’s valuable to them. That flexibility improves engagement and avoids wasted perks no one needs.
How do I measure ROI on an employee benefits scheme? +
Look beyond vanity metrics. Track uptake, active usage, and employee feedback. Benefits that support financial wellbeing, reduce everyday costs, or simplify commuting often deliver measurable value, both to employees and the business.
Will an employee benefits scheme create extra admin for HR? +
Not if it’s built properly. A well-designed benefits platform minimises admin through automation and simple approval flows. That’s especially important when managing benefits like a cycle to work scheme, where ease of use makes a big difference.
Is an employee benefits scheme secure for employee data? +
A trusted scheme should be clear about how data is handled. Strong access controls, transparency, and compliance are essential parts of modern benefit provision, giving employees confidence that their personal information is protected.
