Benefits used to be the domain of big companies with HR departments. Private health insurance, gym memberships, cycle-to-work — most small business owners assumed this was out of reach.
It isn't. And getting benefits right matters more than you might think.
Why benefits matter more than salary (sometimes)
Research consistently shows that employees weigh total compensation — not just base salary — when deciding whether to stay or leave. In a 2024 survey of UK workers:
- 68% said benefits were "important" or "very important" in their choice of employer
- 42% had left a job in the past two years partly due to poor benefits
- 54% said flexible working was the benefit they valued most
The implication is clear: a £38,000 salary with strong benefits often beats a £40,000 salary with nothing.
The benefits that actually move the needle
1. Flexible working
Cost: £0. Value: enormous.
Flexible start/finish times and the ability to work from home occasionally are now baseline expectations for most knowledge workers. If you're not offering flexibility, you're losing candidates to employers who are — without even knowing it.
2. Pension above the minimum
The auto enrolment minimum is 3% employer contribution. Going to 4–5% costs a little more but signals that you care about your team's financial future. It also comes with NI savings via salary sacrifice.
3. Private health insurance
More accessible than you think. Group private medical insurance for a team of 10 can cost £30–£60 per employee per month — around £5,000–£7,000/year for the whole team. Employees value it highly, especially for faster access to specialist care.
As an employer, the premiums are a business expense.
4. Perks and discounts
Gym discounts, restaurant cashback, retail vouchers, and cinema tickets are available through employee benefits platforms at very low cost — often £5–£10 per employee per month. The perceived value to employees far outweighs the cost.
5. Mental health and EAP support
Employee Assistance Programmes (EAPs) give employees access to counselling, financial advice, and legal guidance confidentially. They typically cost £1–£5 per employee per month and are one of the most appreciated benefits when employees actually need them.
Absence due to mental health is one of the biggest hidden costs for UK SMEs. An EAP can reduce it.
6. Learning and development budget
A £500–£1,000 annual training budget per employee is both a genuine benefit and an investment in your team's capability. It also signals that you're committed to people's growth — which matters for retention.
The benefits most businesses offer but shouldn't
- Perks no one uses — ping pong tables and office fruit bowls rank consistently low in employee surveys
- Benefits that require too much friction — if an employee needs to jump through hoops to use it, they won't
- Generic one-size-fits-all packages — a 22-year-old values different things than a 35-year-old with children
Building a benefits strategy on a small business budget
The approach that works for most SMEs:
- Start with what costs nothing (flexibility, recognition, communication)
- Add pension above the minimum via salary sacrifice (saves you NI)
- Layer in a perks and discounts platform (low cost, high perceived value)
- Add private healthcare when you can afford it
- Consider an EAP from day one
Paply's Benefits Marketplace gives SMEs access to big-company benefits at small-business prices — perks, discounts, EAP, and salary sacrifice all built into the platform.