Are your employee benefits helping or harming your employees' well-being?

A quality employee benefits package supports employee well-being and positive business outcomes in various ways. Here are a few ways employee benefits can help both well-being and business growth when implemented effectively.

Improved physical health

Better physical health improves employee well-being, which enhances their quality of life in the long term. Research shows that businesses with effective well-being support and programmes can be up to 20% more productive and have lower rates of sickness absence.

Well-being benefits that support physical health can work together to encourage your team to prioritise their physical well-being. These benefits might include access to medical advice and treatment through health insurance, workplace wellness initiatives, and discounted gym memberships.

Mental health support

Mental health support is a highly valued employee benefit and can help reduce work-related stress and prevent burnout. Your business benefits from mental health support, as it allows employees to feel valued, leading to increased engagement and improved performance. Stress, anxiety and depression were the leading causes of workplace absence in 2023/24, with 16.4 million lost days due to mental health issues.

Creating a positive work environment encourages your team to seek help when struggling with their mental health. Health insurance provides access to counselling and mental health treatment, depending on the coverage your policy provides. An Employee Assistance Programme (EAP) offers short-term counselling and telephone guidance for legal and financial issues that may cause stress and worry. You can choose a standalone EAP, or most insurers provide one as an optional extra on business health insurance policies. Your health insurance provider can also support you with data to help you develop workplace wellness programmes.

A better work-life balance

A better work-life balance offers numerous benefits for overall well-being. It allows employees to spend time with their loved ones or engage in activities they enjoy in their personal lives. Flexible working arrangements enable employees to tailor their working hours and location, allowing them to work productively, fulfil their personal commitments, and manage their mental health effectively. Offering flexible working arrangements to help staff achieve a good work-life balance has other benefits, including improved physical health and reduced financial stress.

The CIPD conducts an annual survey to measure employees' needs against various work and well-being metrics, including work-life balance. Their most recent research found that employees prefer formal flexible working arrangements as they provide greater certainty. However, these arrangements require careful consideration to ensure they align with business outcomes while still ensuring employees feel valued and supported.

Reduced financial stress

Financial stress can impact employee well-being in several ways, affecting both physical and mental health. Employees experiencing financial strain can display many of the same symptoms as those with work-related stress, such as difficulty concentrating and impaired relationships with their colleagues. These have clear consequences for productivity, work quality and an employee's ability to collaborate with their colleagues.

A positive workplace culture encourages staff to share their concerns and communicate openly about issues that may impact their work performance. Employee benefits can provide practical assistance in the form of mental health support, discounts that help them save money, and financial support if they need to take time off work. Your team may still be feeling the effects of the cost-of-living crisis, and you can offer support in various ways.

Increased employee engagement and retention

When you promote employee well-being in your workplace, your business benefits from a happier and more productive workforce. When recruiting, your well-being benefits demonstrate your commitment to supporting your team and make you more attractive to job seekers. Your current staff can also act as ambassadors, recommending your business to potential recruits.

However, once you've recruited new staff, retaining and keeping them engaged is vital. High staff turnover results in increased spending on recruitment. Recent research found that 20% of respondents planned to leave their current job in the next 12 months, in search of better pay and benefits, an improved work-life balance and greater job satisfaction. Of those planning to resign, 27% sought better pay and conditions, 22% wanted a better work-life balance, and 13% cited the need for flexible working hours.

Designing a benefits package that supports employee well-being involves several key elements. Seeking staff feedback and listening to the benefits that help employees feel valued is an excellent starting point.

We've discussed how employee benefits can support well-being. All of these advantages depend on creating a package that employees value and engage with over the long term. However, there are potential pitfalls that can harm employee well-being. You'll likely have made an effort to create benefits that you consider desirable and which support your employees' health and well-being. However, as a survey by HR software provider Ciphr demonstrates, there's often a mismatch between the benefits employers think their team will value and those employees seek.

Here are some of the disadvantages of a benefits package that doesn't meet employees' needs.

Are your employee benefits fair?

You can tailor your well-being benefits to suit employees' differing needs. In fact, personalised benefits are a key trend for 2025. However, you must be mindful that some staff members might perceive the system as unequal or unfair, despite your best efforts. Managers and senior executives may need different benefits due to the nature of their work. For example, a company vehicle is likely essential if they spend significant time travelling to visit clients or suppliers. Higher earners will also receive greater compensation from benefits, such as death-in-service benefits, based on a multiple of their salary.

Differing benefits due to income levels or work duties are relatively easy to understand. However, it can create problems if employees believe that some employees at the same level as them receive preferential treatment. For example, team members with children may seek flexible working arrangements to help them save money on childcare fees or finish the school run before starting work. Providing clarity on the criteria used to approve or deny flexible working requests ensures staff members know that requests are open to everyone. If employees see benefits as unfair or unequal, this could damage their trust in their employers, meaning you lose the intended advantages of your employee benefits.

Are your benefits like a sticking plaster?

As mentioned, the benefits employers believe their team will value often aren't the ones they want. High-quality benefits help support employees' health and well-being in tangible ways. Employees may consider some perks nice to have, but they might not help employees address fundamental concerns or needs. For example, team members who usually buy a takeaway lunch or go for drinks after work may appreciate pizza on a Friday afternoon or an after-work social event. However, they'll mean little to working parents or carers who must leave on time, or anyone who prefers to pack a healthy meal.

Employees might feel you're wasting money on lavish perks rather than addressing their fundamental needs. This is especially damaging if your employees experience high levels of workplace stress or financial worries. Recent research found that 48% of HR directors reported low uptake of employee benefits, meaning they're likely missing out on the associated business benefits.

Poor communication and complex benefits 

Low uptake of employee benefits can happen for various reasons. Poor management communication about the benefits on offer can damage engagement, simply because staff don't know what's available. It can also lead to frustration if staff try to access their benefits but find that they can't use them in the way they intended. For example, health insurance has various optional extras. An employee contacting your health insurer to claim dental treatment may find that it isn't covered, causing disappointment and a need to seek help elsewhere.

If your benefits package is complex, it can lead to confusion about what's included or how to access them. It's wise to focus on quality over quantity, with perks that address fundamental needs and can be easily communicated.

We've discussed how your employee benefits can enhance your reputation and make you a preferred employer. Benefits that underpin employee well-being help attract new talent and turn your current employees into ambassadors. These advantages go beyond communication with job seekers and improve staff interactions with your customers and suppliers.

The reverse is also true. Neglecting employee well-being for perks that take a surface-level approach to reward systems means your team members are more likely to experience stress, physical health issues or lack engagement and productivity. All of these issues can negatively impact performance and their relationships with colleagues, clients and other stakeholders.

If a lack of well-being support results in high staff turnover or sickness absence, it could damage your reputation among potential employees, industry peers and your customer base.

Creating an effective benefits package has multiple advantages. Still, it's vital you take the right approach to assessing what your team will value and how you can best support employee well-being.

Your employees' needs and preferences are also likely to change over time. Employee benefits aren't a 'one and done' task, so reviewing your approach will reap long-term rewards.

Support good physical and mental health

If you want to offer benefits that boost employee well-being, perks that support physical and mental health are an obvious place to start. Employee health insurance provides various resources that employees can access according to their individual needs. It offers quick access to private medical treatment and advice, helping them avoid or minimise sickness absence or worsening symptoms. Health insurance can also provide other services, such as an EAP for mental health support and guidance, and self-help resources that enable employees to improve their overall health.

Wellness initiatives can also foster a workplace culture that promotes well-being and provides staff members with the tools and education necessary to enhance their health. Flexible working and mental health days also have physical and psychological health benefits.

Consider the impact of financial stress

Financial worries and anxiety can cause mental health issues on a par with work-related stress. A wide variety of money-saving benefits are available, allowing employees to tailor them to their specific needs. Discount or reward systems can help your team save money and provide access to low-cost well-being benefits, such as discounted gym memberships. Salary sacrifice schemes can reduce employees' childcare costs and travel expenses, while also cutting their income tax bill. Employee Assistance Programmes often include telephone helplines offering guidance on financial matters. While these schemes don't provide tailored advice, they can help staff understand their options and where to seek further support.

It's also worth including financial well-being in your wellness initiatives and education programmes to give your team the skills and knowledge they need to manage their financial affairs and plan for the future confidently. You can also provide educational resources on your website and incorporate them into your communication strategy.

Look for signs it's time to review your benefits

As we've mentioned, reviewing your benefits package regularly lets you make adjustments as your employees' priorities change. It's also a good idea to look out for triggers that could prompt a review, even if you decide to check whether employee values and benefits align on a regular basis. Organisational, legal and economic changes can all have an impact, as can a shift in your employee demographics.

However, when it comes to well-being, behavioural shifts among your workforce may be the best indicator that it's time for a review. You may notice a lower uptake of once-popular benefits, or an increase in sickness absence. Measuring employee engagement can be challenging, but it's worth the effort. One of the easiest ways to determine whether employees still value their benefits is to ask them directly, through one-on-one conversations, staff forums, or surveys.

Review your communication strategy

You've probably gathered that good communication is key, whatever your approach to well-being benefits. Clear communication helps you learn more about the support your employees need and ensures they know what's included and how to access their benefits.

Consider whether your communications strategy includes presenting information in multiple ways. Research suggests that people are more likely to remember new information if it is shared in a bite-sized format rather than overwhelming them with details. Send regular reminders in various formats, such as interactive training sessions and email. Consider multiple ways to present information to accommodate different learning styles and provide resources that allow employees to verify details as needed.

Globacare's specialist brokers help you invest in insurance policies that support employees as part of your health and well-being strategy. Contact us for advice tailored to your needs.