Research digested: Reward survey – focus on employee benefits, CIPD

About this research

This survey of 1,059 reward or HR decision-makers working for organisations in the UK, carried out between 24 October – 27 November 2025, digs into the current state of employee benefits.

Key findings

  • Many employers lack a financial wellbeing strategy – only 15% of organisations report having a formal employee financial wellbeing policy or strategy
  • A significant minority of employers have no clear purpose for benefits – while 77% of organisations have objectives for offering employee benefits, 22% do not
  • Retention and engagement dominate benefits objectives – the most common objectives for benefits packages are retaining employees (44%), increasing employee motivation and engagement (37%), and improving productivity and business performance (31%)
  • Many organisations do not evaluate whether benefits meet their objectives – among employers that have benefits objectives, 15% do not assess whether their benefits actually meet those objectives
  • Flexible working shows the biggest gap between importance and availability – 75% of employers say flexible working helps achieve the objectives of their benefits package, yet only 40% actually provide it
  • Cost is still the primary lens for benefits decisions – when assessing benefits packages, 42% of organisations cite cost as the most important consideration, closely followed by impact on employee performance or productivity (40%)
  • Most benefits offered are social or basic employment benefits – the most common benefits provided are free drinks or snacks (50%), work social events (49%), and flexible working arrangements (40%)
  • Larger employers provide a wider and more complex benefits offering – for example, 70% of large employers offer private medical or health insurance and 60% offer occupational sick pay, compared with 18% of organisations overall
  • There is strong support for fair pay in principle but weaker action in practice – 81% of organisations agree they have a responsibility to provide employees with a fair income, yet only 38% actually pay the voluntary Living Wage (or £12.60 per hour/£13.85 in London).

What to act on

Organisations should first define clear objectives for their employee benefits strategy before expanding or redesigning their offering. The survey shows that 22% of employers still operate without explicit objectives for their benefits packages. Without a clear purpose – such as retention, productivity or wellbeing – it becomes difficult to evaluate whether benefits spending is effective or aligned with business priorities.

Second, organisations should treat benefits as a measurable investment rather than a fixed cost. Although cost remains the most common factor in benefits assessments (42%), nearly as many employers now consider impacts on performance and productivity (40%). This suggests benefits can play a strategic role in workforce performance, but only if organisations track outcomes such as engagement, retention and productivity.

Third, employers should address the gap between the benefits they believe matter and those they offer. Flexible working illustrates this clearly: 75% of employers say it helps achieve benefits objectives, yet only 40% offer it. Closing such gaps may allow organisations to improve employee outcomes without necessarily increasing overall spending.

Finally, organisations should take a more structured approach to financial wellbeing support. With only 15% of employers having a formal financial wellbeing strategy, there is substantial opportunity for employers to differentiate themselves through policies that support financial resilience, fair pay and access to financial guidance. The report suggests such strategies are associated with broader benefits offerings and stronger organisational commitment to employee wellbeing.

Read the report https://www.cipd.org/uk/knowledge/reports/reward-survey-employee-benefits/