The changing face of employee benefits in UK SMEs

In a landscape where 79% of SME employees expect financial stress in the next 12 months, traditional perks are no longer enough. This report, based on insights from 2,500 participants (2,000 employees and 500 HR leaders), reveals how UK SMEs are rethinking benefits to retain talent, boost morale, and meet evolving expectations. With 45% of HR leaders worried about losing staff, and only 28% having implemented retention strategies, the urgency to act is clear.

Key Findings

• Flexibility is now non-negotiable, 39% of employees rank flexible hours as their top benefit, more than pensions or bonuses.
• Financial wellbeing is a strategic asset, 83% value benefits that help save on essentials, yet many feel limited by retailer options.
• Top retention drivers:
  • Remote work opportunities (55%)
  • Subsidised food and drink (55%)
  • Discounts on groceries and tech (35%)
• Lifestyle spending is shifting. Employees are investing in high-ticket items like vehicles, appliances, and tech, especially when instalment plans are available.
• Saving tools are underleveraged; while 93% use discount mechanisms, many schemes lack relevance. Cashback cards and gift platforms with wide retailer coverage are preferred.
• HR leaders are aware but slow to act. Nearly half fear losing talent, yet a third have taken no concrete steps to improve retention.

What You'll Gain from Downloading This Report

• A dual-perspective analysis from both employees and HR leaders.
• Actionable strategies to align benefits with real employee needs.
• Insights into how financial wellbeing and lifestyle perks drive loyalty.
• Practical lessons for designing benefits that are inclusive, flexible, and future-proof.

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