Employee Benefits Trends

The UK average employee turnover rate is approximately 15% per year, although this varies drastically between industries. In some industries, like hospitality, are much higher than other office-based industries.

The UK has one of the lowest employee absence rates in Europe, with each worker taking an average of 4.6 sick days per year. It may sound great but low absence rates are not necessarily a positive statistic in terms of overall employee health and wellbeing.

Benefits related payroll errors cost companies $140 per employee per year. Automating the process with a benefits platform removes human error, saves time, and reduces the chances of something going wrong.

Businesses rated highly in respect to employee engagement are 14% more productive than less engaged companies, according to a Gallup study.

Businesses who score highly for employee engagement have 81% less absenteeism compared with less engaged companies. Gallup found that engaged employees produce better business outcomes than other employees do - across industries, company sizes and nationalities, and in good economic times and bad. This metric shows that engaged employees make a point of showing up to work.

Companies rated highly on benefits and compensation saw 56% lower attrition than those rated lower. This speaks to the influence great benefits and compensation can have on employee retention metrics.

We found that 74% of companies who took our benchmarking survey in 2023 still offer the ability to work remotely. There seems to be a trend in big tech at the moment calling people back to the office, but our results show remote working is still going strong. When asked how often remote working was allowed, 52% said a few times a week, 29% said it was fully flexible, and 10% said they were a fully remote organisation.

73% of survey respondents in 2023 said they don't measure the engagement rate of their benefits! Considering the proportion of compensation spend allocated to benefits, that figure is very high. This raises the question: is this number because most don't know how to or don't have the time or resources to adequately measure engagement?

We've seen a 48% increase in the average benefits score from our Benefits benchmarking survey. The average score rose from 29 in 2022 to 43 in 2023 (as of June). This suggests that companies are investing more in employee wellbeing and engagement through offering standout benefits packages.

Only 2.8% of companies are looking to decrease their benefits budget over the next 12 months (from June 2023). This is surprising considering it looks like we're heading into a recession but it may speak for the fact that it is very difficult to remove benefits once introduced and many employers might opt for layoffs instead.

44% of companies in 2023 are looking to increase their benefits budget over the next 12 months. This shows a continued trend of increased benefits spend. To add to this, only 2.8% said they were going to decrease budget despite the possibility of a recession.

Deloitte found that in 2023, 64% of millennials would like to have more flexibility in when and where they work. This could be an important indicator to a lot of employers that a growing proportion of their senior team could highly value flexibility.

A Gallup study found that burned-out employees are 63% more likely to take a sick day and are 23% more likely to go to A&E. Supporting employee wellbeing and creating a culture which supports work-life balance is key to ensuring employees don't reach boiling point.

Research conducted by Gallup shows that engaged employees are 21% more productive than disengaged employees. Investing in your team by making work more enjoyable, less stressful, and more psychologically safe will benefit your company by way of increased prodcutivity.

The World Health Organisation (WHO) estimates that depression and anxiety cost the global economy $1 trillion each year in lost productivity. This presents a strong business case for investing in employee wellbeing and mental health support.

Over half of employers now offer some kind of salary exchange (salary sacrifice) programme. So far, 2023 has seen an uplift of 9% in the number of employers offering some kind of salary exchange. It increased from 44.7% in 2022 to 53% in 2023. This suggests the cost of living crisis is influencing employers' decisions to seek out cost-effective employee benefits.

We saw a 14% uplift in the number of employers offering mental health benefits from 2022 to 2023. This highlights the continuing trend of employers taking notice of and responsibility for their teams' mental health.

Employees are spending more of their flexible allowances on cost-of-living related expenses. The percentage of employees' flexible budgets spent on cost of living related expenses (food, bills etc) doubled between 2021 and 2022. This makes a clear case for flexible benefits as they cater for changing employee needs throughout varying economic and environmental factors. Flexible budgets can be adjusted with low effort to the employer to accommodate personal problems an employee might be facing - as with the cost of living crisis.