Employee Benefits Package

There are 2 types. Statutory & contractual benefits. Statutory benefits are those that an employee is legally entitled to. These include things like a minimum amount of paid holiday and a company pension scheme. Failure to provide these can lead to a business breaking the law. Read on.
  • Author: Siva
  • Last updated: May 13, 2022
  • 5 Minutes
Employee benefits package in UK explained by Papershift

Employee benefits package in UK explained by Papershift


A good employee benefits package can play a big part in the success of any UK business. However, given that only about 40% of UK workers feel satisfied with their benefits, it’s an area that’s ripe for improvement.

But with so many employee benefits to choose from, how do you know which ones are worth the cost and will make a real difference for your business and your staff?

This guide will give an overview of the best employee benefits as well as looking at other perks that people really value. We will also look at how employee benefits improve employee morale and discuss the legal ramifications of doing so.

Let’s begin.

What Are Employee Benefits?

Employee benefits are extra incentives provided by employers in addition to a worker’s normal salary or wages.

They are designed to help promote employee satisfaction and wellbeing and could include anything from dental care plans and pension schemes to flexible working hours and family-leave support programmes.

Although some benefits are regulated by law, others are offered as added perks that are used to attract and retain employees.

Why Are Employee Benefits So Important?

On top of the obvious benefits each benefit is designed to give, in general a good employee benefits package will:

  • Improve workplace morale.
  • Reduce stress of staff members.
  • Reduce staff absences.
  • Boost productivity and efficiency.
  • Set the tone for your company’s internal values and ethos.
  • Reduce staff turnover by helping you retain existing staff.
  • Make recruiting the best talent easier.

What Issues Can a Poor Employee Benefits Package Cause?

A poor employee benefits package can lead to a number of problems for a business. These include:

  • Stress and Work Performance

Stress and low job satisfaction are becoming commonplace within the UK workforce. In 2018, three quarters of people reported feeling so stressed that they were unable to cope. This in turn can reduce productivity of staff members and lead to a higher number of absences.

It’s not always the job itself that causes people to experience stress at work. Outside influences such as financial worries, mental and physical health problems all play a role in workplace stress. Often workers can’t help but bring such huge problems into their daily working lives.

A comprehensive employee benefits package can go some way in helping your staff work through these issues by creating opportunities to deal with the issues or even offering support that the employee needs.

  • Greater Absenteeism

It’s perfectly natural that stress and dissatisfaction comes hand in hand with a higher rate of absenteeism. On top of this, workplace perks like dental and health care can improve the health of staff, greatly reducing the number of sick days incurred.

  • Better Productivity

It’s no surprise that happy staff tend to work harder. And what better way to increase employee satisfaction than by offering benefits they value.

What Types of Benefits Can I Offer as an Employer?

There are two main types of employee benefits:

  • Paid benefits. These are often insurance products, like health care and dental plans. While these are much sought after by staff, they carry an inherent cost to businesses that may be difficult to justify in many cases.
  • Perks and benefits that are low-cost or even free to implement. These may be simple things like extra holiday days and flexitime, or more complicated like workplace activities.

What Are Some of the Best Employee Benefits to Offer Staff?

Here is a list of some of the most sought-after benefits for staff.

  • Group Personal Pension

A workplace pension with minimum employee and employer contributions is now mandatory in the UK. When delivered correctly it changes from being just a mandatory requirement to one of the benefits your workforce will value the most.

  • Corporate Health Insurance

At the end of March 2020, NHS data revealed that there were over 4 million people on NHS waiting lists in England awaiting treatment. More than 20% had been waiting more than 18 weeks.

If a worker had to wait 18 weeks for treatment with a debilitating health condition, this would have a considerable impact on their life and their ability to work. They may need time off sick to cope or be unable to work to their full capacity due to their condition.

Employee Medical Insurance gives your staff access to high quality healthcare in private UK hospitals. This lets them skip NHS waiting lists for eligible conditions. They therefore get treated faster and potentially get back to work sooner.

  • Death in Service Cover

While it’s likely that many households would struggle financially if a wage earner passed away, only around a third of UK adults have Life Insurance. That’s why company-paid life cover, known as Death in Service Insurance, is a valuable perk for many employees.

  • Flexitime and Work-at-Home Options

If you’re looking for a free or low-cost employee benefit to keep staff happy, flexitime or work from home options may be for you. Employees, more often than not, enjoy the freedom of working from home and having a more flexible scheduling. Many employees are working parents who juggle other life responsibilities and require flexibility in their working life.

As An Employee, How Can I Tell What Employee Benefits Are Available?

There are a few places to find the employee benefits your organisation offers, including:

  1. If you are entering a new role, check the job description.
  2. Read your employee contract.
  3. Ask your HR department
  4. Look on the company website

What Does the Law Say About Employee Benefits?

The law splits employee benefits into two areas:

  1. Statutory benefits.
  2. Contractual benefits.

Statutory benefits are those that an employee is legally entitled to. These include things like a minimum amount of paid holiday and a company pension scheme. Failure to provide these can lead to a business breaking the law.

Contractual benefits are benefits that a company offers above and beyond their statutory obligations. These might include things like dental or health insurance.

In Conclusion

A good employee benefits package goes a long way to keeping staff happy. We hope that with the help of our guide you know understand the topic a little better.

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Written by Siva

I write & describe the value & benefits delivered by Paperhift's rota planning, staff time tracking, and employee payroll management software. Especially useful for Shift Planners, Rota Managers, Team Admins, and HR Teams :-)