Banish your employee benefits headaches: five common challenges and how to solve them

Employee benefits play a crucial role in attracting, engaging and retaining top talent, while also supporting staff wellbeing and organisational culture.

However, without thoughtful planning and oversight, managing benefits can become more complex than expected, potentially limiting their overall value to the business.

Declining employee engagement, excessive admin and difficulties in proving return on investment (ROI) are among the common concerns that can keep HR professionals and business leaders awake at night.

Here, we explore five of the most common employee benefits headaches – and practical solutions to help banish them.

1. Low employee engagement with benefits

The challenge: You’ve carefully curated a benefits package, but employees aren’t engaging with it. Take-up is low, and many employees don’t seem to be aware of what’s available to them.

The solution: Communication is at the heart of engagement and a one-off mention in an onboarding pack simply won’t cut it.

Employers need to create a continuous dialogue around benefits, using multiple touchpoints to keep employees informed and engaged.

Regular emails, updates on workplace platforms and mentions in team meetings can all help reinforce awareness.

Tailoring messages to different employee demographics is also essential – what appeals to a younger workforce may differ significantly from what more experienced employees value.

Interactive elements such as webinars, Q&A sessions, and team benefits champions can help make benefits more accessible and engaging.

When supported by the right technology, benefit communications become even more powerful. Digital benefits platforms ensure that information is always close to hand.

2. Benefits administration is taking too much time

The challenge: Managing benefits schemes can be time-consuming, pulling HR teams away from strategic priorities. Juggling multiple providers, renewal dates and compliance obligations is a significant undertaking.

The solution: Many businesses find that automating and streamlining their benefits administration makes a considerable difference.

Centralised benefits platforms can allow employees to self-serve, reducing the number of routine HR queries.

Integrating benefits with payroll and HR systems, meanwhile, can eliminate manual data entry errors, saving both time and effort.

For those grappling with the complexity of benefits administration, outsourcing to a specialist provider can ease the pressure.

By handing over tasks such as renewals, compliance and provider liaison, HR teams can focus on the bigger picture - improving engagement and refining their overall benefits strategy.

3. Proving return on investment (ROI) is difficult

The challenge: Business leaders want to see measurable impact from their investment in employee benefits. However, demonstrating a direct link between benefits and outcomes such as employee retention or productivity can be challenging.

The solution: To showcase the value of benefits, companies need to adopt a data-driven approach. Tracking utilisation rates can help businesses understand which benefits are delivering value and where adjustments may be needed.

Employee feedback, gathered through pulse surveys and engagement scores, provides invaluable insights into satisfaction levels and whether the benefits on offer truly align with workforce needs.

Beyond this, linking benefits uptake to HR metrics – such as absenteeism, retention and performance – can paint a clearer picture of impact.

When combined with industry benchmarking, this data-driven approach enables organisations to not only demonstrate ROI but to refine their benefits offering to remain competitive.

4. Balancing cost with employee expectations

The challenge: Economic uncertainty and rising expenses can make it harder to sustain competitive benefits packages – particularly as employee expectations grow in areas such as wellbeing, flexibility and financial resilience.

The solution: Instead of simply increasing spend, businesses should look at optimising their benefits strategy to deliver maximum value.

Flexible benefits, where employees can choose what suits their personal needs, enhance perceived value and ensures that investment delivers maximum impact.

Tax-efficient schemes, such as salary sacrifice for pensions, cycle-to-work programmes and electric vehicle leasing, provide cost-effective ways to support employees while reducing tax liabilities for both parties.

Partnering strategically with providers can also unlock group discounts and preferential rates.

Meanwhile, wellbeing initiatives don’t always require substantial investment – employee assistance programmes, mental health support and financial wellbeing workshops can provide meaningful value at low cost.

5. Keeping up with changing employee needs

The challenge: Employee expectations around benefits are evolving rapidly, particularly amidst high living costs and a shift towards remote and hybrid working. Many employers struggle to keep their benefits offering relevant and aligned with workforce priorities.

The solution: To stay ahead, businesses must regularly review and evolve their benefits strategy.

Conducting annual employee benefits surveys provides direct insight into what employees value most, allowing companies to adjust their offering accordingly.

Benchmarking against industry trends is another crucial tool for staying competitive.

Benchmarking services, such as those offered by Towergate, provide access to extensive data, enabling businesses to compare their benefits package with industry peers.

Rather than overhauling benefits all at once, a phased approach allows companies to introduce changes incrementally, based on employee feedback and fi budget considerations.

A benefits broker and consultant can support this process, offering market insights and expert guidance to build a future-proofed strategy that evolves alongside changing workforce needs.

Turning challenges into opportunities

Employee benefits should be a strategic asset, not a source of frustration.

By addressing these common challenges, UK employers – including SMEs with limited resources – can enhance engagement, streamline administration and realise greater value from their benefits investment.

With expert support, businesses can build a tailored benefits strategy that aligns with employee expectations and business goals.