For HR teams managing employee benefits, cost control is always on the agenda. But savings don’t have to come at the expense of employee experience. With a smart approach to benefits design, companies can reallocate wasted spend to more impactful benefits - or a better benefits platform to help you manage it all. This makes the most of your existing budget while boosting value for employees.
This practice is sometimes referred to as “cost-neutral benefits,” but the reality is more nuanced. While some companies can identify and redistribute significant savings, others may already be optimising their spend. Either way, a strategic review of benefits is always worth the effort.
Here are three key ways employers can find opportunities to optimise their benefits budget:
1. Identify overspending on low-appreciation benefits
A common mistake? Investing in benefits that employees don’t value.Our Global State of Benefits Report 2025 found that 21% of companies report low appreciation levels from employees for their benefits.
The cause is likely to be benefits that don’t align with employee needs.
For example, a startup made up of mostly employees in their twenties might be overfunding its life insurance policy, as employees in this age group are less likely to engage with life insurance. By scaling back the coverage from 10x to 2x cover, they could free up a big chunk of their spend—money that could be reinvested in wider range of more relevant benefits, or a platform that helps manage the administrative burden of benefits.
So how can HR Teams and Reward Leaders identify these opportunities?
- Employee listening exercises: Gather feedback to understand what benefits employees actually use and value.
- Benchmarking: Compare your offering to industry norms and competitors. (Check out our free benchmarking tool!)
- Usage analysis: Assess participation rates—if uptake is low, it might be time to rethink the existing budget.
But before you go cutting less utilised benefits, remember: there are some benefits that few employees might use, but that are highly valuable and even life changing to them when they do, such as reproductive assistance or critical illness cover. It’s important to balance these factors when assessing your benefits. Speaking to a benefits design expert will be your best bet to strike that balance.
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2. Secure better pricing and financial models
Cost savings aren’t just about what you offer, but also how you fund it. Many companies lose money by not negotiating the best rates with insurers or missing out on more efficient financial structures.Here are some key ways to make the most of funding:
- Broker negotiations: Ensure your broker is actively working to get the best possible rates.
- Alternative funding models: Larger organisations can explore options like trusts, multinational pooling, captives, and global underwriting.
- Regular supplier reviews: The benefits market evolves quickly—what was competitive three years ago might now be overpriced.
By optimising financial structures, companies can often unlock significant savings without compromising on benefits quality.
3. Leverage tax-efficient benefits
Another overlooked opportunity is tax-efficient benefits, particularly salary sacrifice schemes. These allow employees to exchange part of their salary for benefits, reducing both employer and employee tax contributions.For employers, this means that you’re able to offer amazing benefits like electric vehicle leasing schemes and even grocery schemes…at no cost to you!
In the UK, salary sacrifice arrangements can create savings on:
- Pension contributions
- Holiday purchase schemes
- Workplace nursery schemes
- Electric vehicle (EV) schemes
- Grocery schemes
For employers not already leveraging these benefits, the savings can be substantial, especially on National Insurance contributions. Yet many organisations fail to fully utilise these tax advantages, leaving money on the table.
Read more about salary sacrifice: Salary Sacrifice in the UK: 2025 Guide for HR Teams.
Maximise your benefits budget with expert support
Not every company will uncover huge savings—but almost all can optimise their approach. By identifying low-value spend, negotiating better financial models, and leveraging tax-efficient benefits, HR teams provide a significantly improved offering without increasing their spend.
Want to find out where your organisation can unlock savings? Book a consultation with our benefits design experts today–same budget, bigger results.
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