Employee benefits will come under increased scrutiny in 2025 as the cumulative effect of pressures from 2024’s Autumn Budget start to bite*. The National Insurance (NI) employer tax rise and the increase in the minimum wage must be factored into budgets from April 2025, which means that all areas of expenditure, including employee benefits, will be closely monitored.
As a consequence, employers will demand more value from their employee benefits spend. Where benefits clearly demonstrate good utilisation rates, staff engagement, and an obvious benefit to the business itself, they will be retained – or introduced – but it warns that the opposite is also true: benefits will be at risk when they are not understood, utilised or providing value.
Katharine Moxham, spokesperson for GRiD, said: “We would urge all employers to ensure they fully understand the benefits that they currently offer, to monitor their use, and ensure employees are aware of the breadth and depth of support available. Where benefits are shown to be effective they will be retained. However, many companies will be looking to make savings to account for the increased costs of employing staff. As a result, benefits will be at risk if there is not sufficient evidence to support their continuation.”
It is predicted that benefits which clearly offer value will be some of the most sought-after in 2025. This will include group risk benefits (employer-sponsored life assurance, income protection and critical illness), as not only are they valued for the financial payment to employees in times of need, but also for the increasingly enhanced embedded benefits which support a return to work, prevention, and early intervention across physical, mental and financial health.
Katharine Moxham: “HR teams should start to gather the data they need now, to put forward the business case for the benefits that support the welfare of staff. They need to show not only uptake of benefits, but also the positive impact on the business itself. However, this also represents a great opportunity for the HR department to demonstrate its accountability and commerciality.”
*According to GRiD
