The UK job market isn't getting any easier. Competition for skilled candidates is fierce, budgets are under pressure, and employees' expectations are shifting faster than ever. If you're an HR professional or business owner trying to attract and retain top talent, you've probably already realised that salary alone is no longer enough.
Employee benefits have become one of the strongest tools employers have for attracting and retaining talent. According to research by Globacare, 62% of UK employees now prioritise benefits when choosing where to work, up from just 47% the previous year. That’s a significant shift in employee expectations.
In this guide:
Why benefits matter more than ever for attracting top talent
What benefits actually attract employees in 2026?
How to build a benefits package that attracts top talent
The role of a benefits platform in attracting top talent
Recruiting in the UK right now is tough. Skills shortages, an ageing workforce, and rising living costs have combined to create a job market where top candidates have more choice than ever.
In this environment, your benefits package isn't just a nice-to-have. It's often the deciding factor. Candidates look at the full picture before they accept an offer, and many will walk away from a higher salary if another employer offers a package that better supports their lifestyle and wellbeing.
The CIPD's Reward Survey: Focus on Employee Benefits 2026 – which surveyed over 1,000 UK HR and reward decision-makers – found that retaining staff is the number one objective behind benefits investment, cited by 44% of organisations. Engagement came second at 37%. And 22% of employers have no clear objectives for their benefits at all. That's a big missed opportunity – and potentially your competitive advantage if you get it right.
Not all benefits are created equal. The most effective packages combine core essentials that every employee expects with more personalised perks that genuinely make a difference to people's lives.
With the cost-of-living crisis still ongoing, financial security has become a top priority for UK workers. According to the Drewberry 2026 Employee Benefits Benchmarking Report, 80% of employees say financial stress negatively impacts their productivity at work – highlighting the close link between financial wellbeing and workplace performance.
According to a Ciphr survey of 2,000 UK employees, the most popular financial benefits are:
Paid sick leave (68%)
Annual pay rises (60%)
Pension contribution matching (54%)
Employee discounts scheme (46%)
Paid overtime (42%)
A comprehensive package should also consider life assurance, income protection and critical illness cover, and financial education and advice – benefits that provide long-term security and peace of mind.
Employees who feel financially secure are more engaged, more productive, and less likely to be distracted by money worries at work. It's a benefit that pays off for everyone.
Health benefits remain one of the most valued parts of an employee benefits package. With NHS waiting times continuing to stretch, private medical insurance (PMI) is something many candidates now actively look for.
But health benefits go well beyond traditional PMI. The most competitive packages now include:
A strong health benefits package supports existing employees and can strengthen your appeal to candidates.
Salary still matters, but for many employees in 2026, flexibility is no longer a “nice to have.” The ability to work in a way that fits their life often plays a major role in whether they choose to join or stay with an employer.
For some, that means flexible start and finish times. For others, it's hybrid working, more annual leave, or the option to work from another location for part of the year. According to the CIPD's Reward Survey 2026, 75% of organisations with clear benefits objectives say flexible working helps them achieve those goals, but only 40% of UK employers offer it.
According to a Ciphr survey of 2,000 UK employees, the most popular flexibility-focused benefits are:
These types of benefits appeal because they improve day-to-day quality of life in a very practical way. In many cases, they can be just as attractive to employees as more traditional financial perks.
Day-to-day perks might seem less exciting than health insurance or a pension, but don't underestimate them. Benefits that save employees money in their everyday lives – shopping discounts, dining cards, travel perks – create a sense of ongoing value that employees notice and appreciate.
It’s one thing to know which benefits attract employees. It’s another to build a coherent strategy around them. Here’s how to approach it.
There's no such thing as a one-size-fits-all benefits package. A graduate joining your marketing team has very different priorities to a senior finance director with a family and a mortgage. The most effective packages are flexible. Employees can tailor benefits to what matters to them.
Instead of a fixed list of perks, employees can choose benefits that fit their needs. Someone who values gym access over dental cover can make that call. Someone else might prioritise enhanced pension contributions. Over time, that flexibility can strengthen employee satisfaction and loyalty.
Today's workforce spans multiple generations with different values, priorities, and life situations. Millennials and Gen Z employees might prioritise mental health support, flexibility, and lifestyle perks. Older workers may place more weight on financial protection, pension, and private healthcare.
Your benefits package should reflect that diversity. Use your HR data and employee feedback to understand the shape of your workforce and build accordingly.
Benefits don't exist in isolation. How you structure work, including hybrid arrangements, flexible hours and additional leave options, is part of the overall package employees evaluate. Holiday trading schemes that let employees buy or sell leave are particularly popular and cost-effective to implement.
The CIPD research found that improving wellbeing support topped the list of retention strategies for UK employers – above raising pay. That tells you that employees aren't just looking for financial compensation. They want to feel supported in ways that go beyond pay and day-to-day work.
Benefits only create value when employees understand what’s available. The most generous benefits package in your sector won't help you attract or retain talent if your employees don't know it exists. Use your benefits platform to communicate clearly and regularly at onboarding, during enrolment periods and throughout the year.
Even well-intentioned benefits strategies can fall flat. Here are the most common pitfalls:
A strong benefits strategy needs more than the right mix of benefits. Employees need to see what’s available, understand the value, and access everything easily. Your team needs a simpler way to manage benefits, communicate them clearly and track what’s working. Without the right platform, that can become difficult, especially as your benefits offering grows.
FlexGenius brings employee benefits solutions, communication and reward into one place. Your team can manage benefits more easily, and employees get more value from what’s available. That can improve visibility, support engagement and strengthen the role benefits play in attraction and retention.
If you’re reviewing how your benefits package supports attraction and retention, book a demo or contact our team to discuss what might work for your organisation.
This article was first published in May 2024. It was updated and republished in May 2026 for freshness, clarity, and accuracy.