Zest customers spent an average of 22% more on employee benefits in 2024

The lasting effects of the global pandemic and the continued unsteady economic environment have caused a shift in values amongst workers – now employees increasingly demand support from their employer.

In fact, around half (47%) of UK employees say a good benefits package is the most important thing they look for when starting a new role.

The cost of living has presented ongoing economic challenges that businesses and employees are both employers and are clearly feeling – one in five (19%) businesses admit that they’ve struggled to increase salaries in line with inflation. If inflation wasn’t enough, announcements made in the Autumn Budget will only place employers under further financial strain with National Insurance (NI) contributions set to rise by 1.2% in April, estimated to cost UK businesses an additional £25 billion annually.

Employees are already feeling this strain – some of Zest’s most recent research found that almost half (46%) of employees weren’t expecting to be paid a Christmas bonus last year. In lieu of purely financial incentives, employers have little choice but to think more creatively if they want to stand out against competitors and retain the best talent.

One key approach businesses are taking is turning their attention to benefits packages to offer employees increased value for money – nearly half (49%) of businesses report that they’ve increased investment into these packages over the past year.

Looking back on the past year, businesses that have chosen to partner with Zest’s employee benefits technology specifically – there has been a 22% rise in monthly spending amongst our customers over the last 12 months.

This has led to Zest customers saving a total of £6.8 million in NI contributions each month during 2024, up from £5.37 million each month the previous year.

Not only can effective employee benefits help businesses to save money but critically, it can help businesses to attract and retain talent. More than half (48%) of employees say they would leave their job if another company offered them a better benefits package. This rises to 56% of employees between the ages of 18-34.

The significant increase in spending on employee benefits shows employers are recognising the growing importance employees are placing on employee benefits as well as their cost effectiveness when salary increases and bonuses may be less feasible.

While employer’s may not be able to raise salaries this year, investing in benefits can be a highly effective way to stand out from competitors and help to save money. To maximise this investment, employees should lean into technology for a more personalised offering that can help to increase engagement and ensure that the right benefits, reach the right employee, at the right time.

Research conducted by independent research agency Opinium which surveyed 2,000 adults weighted to be nationally representative between 22^nd – 26^th November 2024.

Research conducted by independent research agency Opinium which surveyed 2,000 adults weighted to be nationally representative between 28^th – 30^th August 2024 and 500 HR decision makers between 21^st – 30^th August 2024.