Employee wellbeing benefits explained

Positive employee wellbeing is crucial to the success of your business. The health and wellbeing of your employees should be a priority when creating your workplace benefits strategy.

One of the UK’s largest surveys of employee wellbeing, Vitality’s Britain’s Healthiest Workplace (BHW), illustrates the importance of employee wellbeing. Lost productivity due to ill-health is estimated to have cost the UK economy £860 billion over the past 10 years, between 2014 and 2023.

The survey shows a clear correlation between employees’ physical and mental health, and their health-related productivity loss over time. This underscores the need for employers to prioritise employee wellbeing and to register it as a tangible risk facing their business.

What are the mandatory benefits for all employees?

Employee benefits cover a wide variety of non-salary related perks. Everything from paid sick leave to subsidised canteens and gym memberships. However, only a few of these perks are mandatory. The others often form part of a wider employee wellbeing benefits package provided by the employer.

Let’s take a look at some of the statutory benefits employees can expect from all employers.

Workplace Pension

Since 2012, auto enrolment has been phased in for all businesses, but not necessarily all employees. Your workforce will need to meet certain criteria before being enrolled in your pension scheme. Both the employee and employer contribute towards the pension pot. This money is invested for the employee’s retirement.

Statutory Sick Pay (SSP)

Employers are obliged by the government to pay a minimum amount if an employee cannot work because of illness or injury. This amount is currently £116.75 per week¹. It’s often significantly less than the usual weekly salary employee would receive, and not so many employers offer a more generous scheme.

Employees can receive statutory sick pay for up to 28 weeks. The money is paid in the same way as their wages, either weekly or monthly and may be taxed.

Holiday pay

Employees are entitled to at least 28 days paid holiday if they work five days a week. Part-time workers are also entitled to paid holiday in proportion to the hours they work. So, if someone works three days a week, they’re entitled to 16.8 days holiday. This can include bank holidays, although many employers allow employees to take these days in addition to their paid holiday.

Employers can also offer schemes where extra holiday days can be bought. This gives employees more flexibility when it comes to planning their breaks.

Maternity and paternity pay

Employees are entitled to 39 weeks statutory maternity pay. Six weeks of this will be at 90% of their pay. The remaining 33 weeks will be at £184.03 per week, or 90% of their pay if this is less.

Employees can also take one or two consecutive weeks off work on paternity leave. During this time, they’re entitled to £184.03 per week, or 90% of their pay if this is less.

Employers can offer a more generous maternity and paternity pay settlement, but it must never be less than the statutory pay.

Why should you offer a strong benefits package?

Every employer has to provide the statutory benefits for their employees. By offering a generous benefits package, employers can differentiate themselves from their competitors.

Attract and retain talent

A package of benefits that improves wellbeing is very attractive to prospective employees. In a competitive recruitment market, applicants will look at all the benefits an employer offers. And many expect not just a pension and paid holiday, but private healthcare and flexible working. 

Providing a comprehensive employee wellbeing benefits package could also encourage employees to stay. Employees enjoy a range of perks and are reluctant to compromise with a different employer.

Improved output

The Britain’s Healthiest Workplace report shows there is a clear correlation between a range of health risks and employee productivity losses. An employee at risk of depression is estimated to lose 151% more productive time. This obviously has a huge impact on a company’s bottom line. However, healthier employees lose less productive time on average. This indicates that supporting healthy behaviour in the workplace can unlock business benefits.

Engaged employees

A wide range of employee benefits will appeal to a wide range of employees. So, with a strong benefits package in place, you’ll engage more workers. And this can help employees feel committed and invested in the success of the company.

What are the benefits of employee wellbeing programmes?

Having a package of benefits in place is good, but it can work more effectively as part of a wellbeing programme. Each benefit can fit into an overall strategy that supports employee wellbeing.

A wellbeing programme needs to look at the five key areas of wellbeing:

• Financial
• Physical
• Emotional
• Social
• Mental

Benefits that fit across these categories can greatly enhance the way your employees think about work. Healthy employees are less likely to take time off work sick. And they also lose less productive time.

Our BHW report shows that employees rate mental health support, private medical insurance and financial wellbeing support as the most useful health and wellbeing initiatives. But our poll of 2,000 UK employees in October 2024 also revealed that 63% of employees believe that their employers should be doing more to support their health and wellbeing.

The good news is that employee health appears to be on the agenda for the majority of businesses. Almost three quarters (73%) of businesses report that employee health is discussed at least annually at Board level. Some 85% discuss it at Executive Committee level. While positive, there is still some way to go.

One of the employee benefits that cuts across the five key areas of wellbeing is private health insurance. Implementing a company healthcare scheme has several benefits:

• Better employee health – meaning improved productivity and fewer sick days. The improved health metrics of employees with Vitality Health Insurance equate to 2.5 additional days of productive time per employee each year².
• Greater employee recovery – recovery starts sooner with quick access to treatment.
• Improved staff morale – employees feel valued and have a greater sense of job satisfaction. Britain’s Healthiest Workplace 2023 found that employees with Vitality Health Insurance are 13% less likely to report low job satisfaction³.

Types of corporate health and wellbeing benefits

Private health insurance

Company health insurance provides employees with quick and easy access to private healthcare. It’s also known as private medical insurance (PMI) or business health insurance.

It covers a wide range of treatments.  Such as seeing a private GP, physiotherapist or mental health professional. Plus, quick diagnosis and treatment, cancer care, stays in private hospitals, and access to specialist drugs.

Mental health support

Mental health support is often included as part of a private health insurance scheme. It gives employees access to mental wellbeing activities and out-patient support. With Vitality, employees can speak to a Talking Therapies counsellor if they need help quickly. And access to meditation and mindfulness therapy can help stop issues escalating.

Pension

Providing a pension is a statutory benefit. But many employers choose to contribute significantly more than the required minimum. It can be seen as an effective way to remunerate employees in addition to their salary.

Holiday and unpaid leave

Staff need regular breaks from work to stay focussed and rested. Not enough holiday could result in burnout. Allowing staff to take unpaid leave or buy additional holiday days shows you understand the importance of time off work.

Sickness pay

A generous sick pay scheme could show your employees that you’re serious about their physical health . It encourages sick employees to only return to work when they feel better. Productivity is adversely affected if employees come to work when they’re too unwell.

Income protection and life insurance

Group income protection plans can provide up to 80% of an employee’s gross earnings if they can’t work due to illness or injury. It helps your employee maintain their standard of living when they’re off sick. And it helps you as an employer offer a greater benefit than statutory sick pay.

Many employers also choose to offer a death in service payment if an employee dies whilst they’re employed. This type of life insurance  pays out a cash lump sum, based on a multiple of their salary, to their family which helps to replace the income lost when an employee dies.

Flexible working

All employees have the right to request flexible working. Employers must agree to a flexible working request, unless there is a good business reason not to. Under flexible working rules, employees can request to change:

• the number of hours they work
• when they start and finish work
• where they work
• the days they work

Having flexible working in place means that employers can open up jobs to a wider cohort of people. This way they can attract a wide variety of talent from across the country.

Additional perks

There are many other perks and benefits that have an impact on staff satisfaction. These can be significant perks, like a free workplace canteen, or smaller benefits like lunchtime yoga classes.

Others include:

• cycle to work scheme
• subsidised gym membership
• unlimited holiday
• Social outings and family days
• Onsite games room

Vitality’s workplace wellbeing solution

When you take out business health insurance with Vitality, your employees get access to a suite of wellbeing services.

Get your team involved with an expert-led wellness session. These virtual workshops last up to 90 minutes and cover topics such as nutrition, physical and mental health.

Our regular webinars explain how employees can make the most of their Vitality health plan. It can help them kick start a healthy lifestyle with the Vitality Programme.

Plus, you can book a Healthcheck Day with our expert clinicians. They'll take biometric health screenings of your employees to see if they’re at risk of any health conditions.

Key takeaways

Taking care of the health and wellbeing of your employees is important. It should be a priority when creating your workplace benefits strategy.

A failure to look after your staff could have a significant financial impact on your business. By offering a generous benefits package, employers can differentiate themselves from their competitors. A robust employee benefits package has several benefits:

• Improved productivity and fewer sick days.
• Employees feel valued and have a greater sense of job satisfaction.
• A reputation as a good employer

There’s a wide variety of employee benefits to choose from. But the key ones are:

• Pension
• Paid sick leave and holiday
• Flexible working
• Death in service payment and
• Private healthcare

Employee benefits FAQ

What are the top 5 types of employee benefit?

Each employer will have different priorities for their employee benefits scheme. However, certain benefits are always popular with employees. These include:

• Private healthcare and wellbeing support, including an Employee Assistance Programme
• Flexible working arrangements
• Life insurance
• Being able to buy and sell holiday
• Employee discounts to help with the cost of living.

What are the legally required employee benefits in the UK?

Statutory benefits include:

• Pension – with employer contributions
• Sick pay
• Holiday pay
• Maternity and paternity leave and pay

Can employer pay for private health insurance?

Yes, with a group scheme like our Business Healthcare, the employer covers the cost of the premiums. However, this insurance is classed as a benefit in kind for employees. This means employees pay income tax at their usual rate relative to the cost of the insurance premiums.

So, if the benefit costs £500 per year and the employee’s tax rate is 20%, they’ll pay £100 additional income tax to have this benefit.

Do all employees have to be offered the same benefits in the UK?

All employees have to be offered the legally required benefits of pension, sick pay, holiday pay and maternity/paternity pay. But employers can choose what they offer to employees over and above that.

Employees can be offered the same type of optional benefit but at different levels. For example, an employer can offer death in service benefit to all employees. However, they can decide to offer a multiple of five times annual salary for senior staff and four times annual salary for more junior staff.

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¹ Source: Gov.uk, Statutory Sick Pay (SSP)

² Source: 10 years of Britain’s Healthiest Workplace, Vitality

³ Source: 10 years of Britain’s Healthiest Workplace, Vitality