50 employee benefits and perks to increase staff retention

Types of employee benefits and perks

Let’s take a look at the different types of employee benefits and perks that you could be offering your staff.

Flexible working

When businesses were forced to move online during lockdown, the rapid digital adoption of Zoom and Microsoft Teams turned us all into remote workers.

Now, demand for hybrid working (dividing working days between home and the office) has continued into 2025. According to the Office for National Statistics (ONS), 28% of workers in Britain were hybrid workers between January and March 2025.

To make it work, employers, as well as employees, will need to be the flexible ones. Don’t start requesting detailed timesheets or tracking staff screens. Instead, trust that your workers will update you as needed and are able to manage their time effectively.

Working from home

Perhaps the most well-known flexible policy is working from home (WFH). Providing they have the right home office equipment, your staff can swap their commute for a longer lie-in and work from their own base, instead of travelling into the office.

As well as saving time, WFH offers financial rewards. Those with carer responsibilities might not have to pay for childcare or other at-home help. Meanwhile, research from HR News found that Brits could save £2,441 each year by working from home.

And, just because your staff aren’t in the office, doesn’t mean they have to be working from home. Forward-thinking employers can offer a ‘work from anywhere’ policy for digital nomads. This allows staff to base themselves away from home, or even outside of the country, for a set period of time.

Flexi-hours

In the past, working overtime would earn you a badge of respect from employers. Thankfully, more progressive attitudes are now emerging, which have given rise to the idea of flexi-hours – being able to bank any extra hours worked to take from a future working day.

Simply ask your employees to record the extra hours they’ve worked and create a channel of communication for them to inform managers of when they intend to take the time off.

It’s a simple, low-cost way to reward commitment that supports work-life balance, while also helping to prevent burnout from creeping in. Just be sure to set clear boundaries around how many hours can be banked and when they can be taken, so workloads and team coverage stay on track.

Compressed hours

This is a flexible working arrangement where employees work the same number of hours per week, but over fewer days.

A popular example of this is the four-day working week— a reduced hours policy that gives workers three days off per week. Several UK companies have adopted this approach to improve productivity, employee wellbeing, and staff retention.

Another example is the nine-day fortnight, where employees work their full contracted hours over nine days instead of ten, effectively getting every other Friday off (or another regular day).

But while compressed hours can have obvious benefits for employees, it isn’t something businesses should jump into. Instead, you should start by consulting your teams about the change. Next, you should trial the schedule and track outcomes like productivity and employee engagement, to see if this new arrangement works for your business.

In-office perks

Office perks can start small, but quickly have a big impact. They’re designed to give workers a better quality of work-life balance by improving wellness, fostering an attractive company culture, and decreasing stress.

For those businesses that have been particularly hit hard by the cost of living crisis, office perks also tend to be a lot cheaper than more complex benefit schemes.

Free breakfasts or lunches

As inflation sees the price of a sandwich shoot up, the average cost of breakfast or lunch has become a source of stress for many workers.

Sometimes, the fastest way to an employee’s heart is through their stomach. Buying bulk fruit pots or bagels means you can cover this cost and facilitate significant savings for staff. This doesn’t have to be for five days a week – even one day of free food can be enough to cheer up your team, help staff save a few pounds, plus foster a culture of community over a shared lunch break.

Modern office environments

Providing a comfortable location for staff to work in is an easy way to demonstrate care for employee wellbeing. Superior office spaces need to be well-lit, have comfortable furniture, and feature plenty of greenery around to boost oxygen levels. All of these factors will help to reduce stress and improve energy levels.

A leftover of COVID has been that there has also been a new focus on sanitation to prevent the spread of viruses. Workplace design can be altered to increase personal space and install physical divides to help restore employees’ confidence in returning to the workplace.

Remember, a modern office design can also be an ace up your sleeve for attracting new talent to your business, catching their attention from that first in-person interview.

Sports and social clubs

Workplace sports and social clubs can help to build up staff engagement and motivation. Clubs can help employers support employees’ emotional and physical wellbeing, which means this is an investment with considerable payback.

These don’t have to have a significant cost overhead, either – setting up a running club can cost you nothing at all, and it won’t cost the earth to pay for a yoga instructor to run a weekly session out of a larger meeting room or breakout space.

Mental health ambassadors

It was reported that around 96% of the UK’s top companies now offer some type of mental health support for employees.

Mental health ambassadors work alongside your HR team to help create a positive mental health culture at their workplace. Self-nominated individuals are given training to develop the skills and knowledge to develop good mental health across multiple teams. For those staff members who are feeling stressed or overwhelmed with a task, ambassadors are available to listen and offer support in a non-judgmental and confidential capacity.

Obviously, such an ambassador won’t be able to resolve serious mental health issues. However, the process works well as a low-cost support network for companies that want to create a positive workplace environment, encouraging staff in need to seek appropriate help.

Casual dress code

When you step into an office today, not everyone is going to be wearing a suit and tie. While this was very much a staple of traditional workplace culture, today’s dress codes are more about comfort and individuality, with many businesses embracing smart-casual or even fully casual attire.

For employees, a casual dress code allows them to feel more comfortable, express their personal style and focus on their work without the pressure of formal dress codes.

That being said, it’s still important to lay out clear rules for dress codes, such as what’s acceptable and what’s not. For example, t-shirts with offensive words, overly revealing outfits, or anything that could be deemed unprofessional should be avoided.

Subsidised travel

Commuting to and from the workplace and undertaking company-relevant travel can create a considerable financial burden for employees, meaning that if you can find a way to help alleviate this, you should.

Claiming for fuel on business travel

By claiming HMRC mileage rates, firms can reimburse employees for travel costs if they use their vehicles for business. This can greatly improve staff satisfaction – particularly as fuel costs continue to rise.

Car and van drivers can claim back up to the ‘approved amount’ of 45p from HMRC for every mile travelled for business use, up to 10,000 miles. After 10,000 miles, the amount drops to 25p. For fully electric or hybrid vehicles the mileage allowance is the same as for a petrol or diesel car.

Cycle to work schemes

This scheme enables employers to lease a bicycle to employees, usually for an 18-month period. The business will buy a bike for the employee to ‘hire’ through salary sacrifice – this saves money as they won’t need to pay tax and National Insurance contributions on the monthly fees.

Cycle to work schemes can have a big benefit for your business too, as research suggests that cyclists take 15% fewer sick days than their non-cycling colleagues!

Holiday and leave

Providing paid annual leave is, of course, a legal requirement for employers. Managers must offer all full-time staff members a minimum of 28 days’ paid holiday a year, including bank holidays.

Nonetheless, many businesses choose to offer above this level to differentiate themselves from competitors. Linking holiday entitlement with length of service also provides staff with an incentive to stay in their role for longer.

Unlimited annual leave

Instead of a fixed number of paid vacation days each year, this policy grants workers an uncapped number of days, so long as they agree on periods of leave with their boss. Also known as “open leave”, the idea aims to give workers more autonomy to manage both their workloads and personal lives, potentially leading to an uptick in wellbeing.

Susan Stick, SVP at Evernote, says taking longer holidays helps workers to “really disconnect. The health benefits of taking holidays are becoming more well-documented and better understood.”

In-person retreats

Corporate retreats are events, typically lasting from a full day up to an entire week, put on by businesses. These are not taken as annual leave, and usually revolve around a particular project, objective or planning consideration.

However, because retreats take place away from the office, they do offer staff time away from the desk and usually a fun experience or activity, or opportunities for professional development.

For example, you might choose to take your employees to a spa hotel so they can fit some relaxation time around their work responsibilities.

Sabbaticals

Sabbaticals are extended breaks from work that employees can take – usually after a certain number of years with a company – to rest, recharge, or pursue personal interests. The length of a sabbatical usually ranges from a few weeks to several months.

A study reported by Quality Company Formations revealed that 53% of UK companies now offer sabbaticals – a significant increase from 38% in 2022. Improving employee wellbeing, fostering a flexible culture, and increasing talent retention were cited as the main reasons for offering sabbaticals.

To offer sabbaticals effectively, businesses should create a clear policy that outlines eligibility, notice periods, duration limits, and whether the leave is paid or unpaid. It’s also important to plan ahead for coverage, so business operations and continuity aren’t disrupted.

Work from anywhere

As the name suggests, work from anywhere (WFA) policies allow employees to do their jobs from any location – whether that’s at home, a coworking space, a different city, or even abroad.

WFA has become a popular choice among businesses that aren’t planning to offer pay rises. For employees, it offers a better work-life balance, the freedom to live in more affordable locations, and the potential to save on commuting and daily expenses.

Similar to sabbaticals, companies should set clear guidelines around availability, time zones, data security, and performance expectations. Additionally, you should maintain good communication practices to keep teams connected and collaborative, even when working remotely.

Social events

Work socials are expected among employees and can be as simple as a subsidised trip to the pub, or as costly as a blowout Christmas party.

Whatever their scale, a work social event will contribute to an engaged and collaborative workforce. Social connections are the most important ingredient for effective team communication. Anyone who has ever witnessed or experienced a bad workplace relationship knows the damage it can cause to productivity.

Strong social connections also make people happier and physically healthier, which can translate into improvements in work performance and build a sense of kinship among staff.

Parent and carer support

Caring duties can be incredibly demanding. Companies need to be empathetic to the pressures being placed on parents and carers so that they can provide support and flexibility when necessary. Doing so will remove any barriers preventing team members from getting their work done effectively.

Women are also more likely to leave work or accept lower pay because of caring responsibilities than men are. Contributing more support to carers will help to address the inequality between genders and ensure you are able to recruit from a wider pool of talent.

Identifying carers and understanding their circumstances is a helpful starting point for employers looking to support working carers.

You might seek to do this through creating a “carers’ register”, where employees who have indicated they’re carers are listed, enabling access to carers’ leave and other benefits. It’s important to regularly update this as circumstances change.

Enhanced parental leave

Legal parental leave in the UK is unpaid and offers 18 weeks’ leave for each child (or adopted child) up to their 18th birthday.

However, some businesses are offering more generous parental leave benefits. For example, they might provide paid parental leave on top of the unpaid entitlement, extend the total time off allowed, or offer additional flexibility such as remote work options or phased returns.

Offering enhanced parental leave can have a positive effect on employee retention and make succession planning much simpler. It also sends a strong message that your company values and supports employees’ family lives, which can boost morale and retain the best talent.

Enhanced maternity/paternity pay and leave

The UK’s statutory maternity leave is up to 52 weeks. The earliest that leave can be taken is 11 weeks before the expected week of childbirth, unless the baby is born early. Maternity leave consists of:

• Ordinary maternity leave – first 26 weeks
• Additional maternity leave – last 26 weeks

Meanwhile, paternity leave for eligible fathers and partners is up to 1-2 weeks.

However, some businesses go beyond the legal minimum by offering better maternity and paternity leave. For example:

• Longer paid leave, such as six months or more of maternity leave with full or partial pay.
• Higher pay rates during leave, sometimes topping up statutory maternity pay to 100% of salary.
• More flexible return to work options, like phased returns or part-time schedules after leave.
• Equal parental leave policies that give dads and partners the same amount of paid leave as birth mothers.
• Additional support, such as childcare assistance or wellness programmes during and after leave.

Enhanced adoption pay and leave

Much like maternity leave, statutory adoption leave allows eligible employees to take up to 52 weeks, with the same division in ordinary and additional leave. The start date can begin:

• Up to 14 days before the child starts living with the parent (UK adoptions)
• On the day the child arrives in the UK (overseas adoptions)
• On the day the child is born or the day after (in surrogacy arrangements)

For this, employers can offer the same enhanced benefits as they would for employees on maternity leave. This not only supports staff during a major life event, but also boosts loyalty and helps build a more inclusive and family-friendly workplace.

Eldercare

In 2020, the UK government introduced carers’ leave, a ‘Day One right’ that allows employees to leave work to provide care and attention for a dependent alongside their paid work.

Whether or not a person qualifies as a carer is up to the employer’s discretion. However, this definition tends to include:

• Spouses and civil partners
• Children (including adopted and stepchildren)
• Parents
• Someone who lives in the employee’s household (not tenants, lodgers, or employees)
• Someone who relies on them for care (e.g. an elderly neighbour)

For eldercare benefits specifically, there are many different kinds of company benefits that can help support employees with caring responsibilities. These include:

• Flexible working hours, allowing employees to adjust their schedule to attend to eldercare needs.
• Remote work options, helping carers balance work and caring duties from home.
• Offering paid or unpaid eldercare leave specifically to care for elderly dependents during emergencies or appointments.
• Offering counselling and advice related to eldercare challenges.
• Caregiver allowances or stipends to provide extra financial help for employees who are primary carers.

Workplace nursery

It’s every parent’s nightmare to find out that their child’s regular nursery is closed for the day, or that a childminder has dropped out at the last minute.

Fortunately, quite a few companies have caught on to this and now offer a solution with workplace nurseries – an on-site or nearby childcare facility to support working parents. Not only does it help stressed-out parents, but it also saves time on commuting for separate childcare, boosts loyalty, and can even encourage earlier returns from parental leave.

However, businesses should look into whether a workplace nursery is actually in demand with employees before building an on-site facility or partnering with a provider. Moreover, it can also add to overhead costs, so you’ll need to think about whether your business can really afford to provide this benefit before making any decisions.

Insurance policies

Insurance policies, while providing plenty of value for the employee, are very complex to introduce and require a hefty amount of admin. Low take-up will also make policies more expensive.

Try to get an idea of interest and employee feedback on the idea before you progress so you can be certain that you’ll get a significant return on investment.

Private medical insurance (PMI)

PMI helps with the cost of private treatment and enables staff to jump hospital waiting lists. However, most policies do not cover pre-existing medical conditions, and PMI is perceived to be the most expensive healthcare benefit.

Generally speaking, the more employees you add to private medical insurance, the cheaper the cover becomes per worker. However, Tobin Coles, Sales Director of Jelf Corporate Healthcare, estimates that small businesses will pay about £700 per person per year.

Life insurance (paid out if an employee dies) and Income protection (paid out if an employee is unable to work)

These two policies are tax-free and offered because they are typically lower cost but high impact benefits. At least one is usually offered by a company. Not providing them creates financial and/or reputational risk if something happens to an employee. It also makes a company’s compensation package uncompetitive, resulting in difficulty in hiring/higher salaries.

Insurance policies are also better value the more people they cover, so these are often cheaper and more efficient than other benefits.

Most businesses offer group-term life insurance as an employee benefit, although individual terms can be offered. Group-term packages come with no cover limit, so a small business can protect its entire staff with one policy.

Also growing in popularity is life assurance. This policy differs from life insurance as it lasts for the subscriber’s entire life. You can sign up at any age. Naturally, this is a more expensive option than life insurance.

Income protection pays an ongoing monthly income to employees who become physically unable to work. The employee will be given around 50-60% from the provider, while employers should expect to pay somewhere between 1.25% and 1.5% of payroll.

Pension plans

Employees tend to be more aware of the benefits of having a healthy pension pot for retirement, meaning businesses offering exceptional pension schemes score highly in the recruitment and retention stakes. In fact, according to recent statistics, 58% of employees would prefer a larger pension over other benefits.

Understanding pensions can be tricky. To get a more detailed overview, read our guide to small business pension plans.

Phased retirement

As the state pension age creeps steadily upwards, more businesses are looking into phased retirement: an HR plan where an eligible employee is allowed early access to their retirement benefits, even though their employment continues.

To be able to withdraw funds from their pension pot, the employee will cut down their work hours or change their work schedule. However, they’ll be able to supplement their income with their pension, giving them the benefits of more free time without a dramatic pay reduction.

Savvy business owners will recognise that this is mutually beneficial for the employer. Phased retirement means you will not suddenly lose access to a key team member’s skill set when the worker fully retires. Instead, you can use this time to work with the retiree and ensure that their valuable knowledge is transferred to coworkers.

Defined benefit schemes

Also called a “final salary” pension, a defined benefit scheme is a type of workplace pension that pays staff a retirement income based on salary and years worked for the employer, rather than the amount of money contributed to the pension.

They offer a guaranteed pension income when you retire, incentivising staff to stay at a company for longer and providing members with certainty about their retirement income.

Companies also often choose defined-contribution plans instead because they are the most attractive type of scheme to employees. However, your business takes the financial risk, and you will need to provide additional funding if a deficit occurs.

Stakeholder pension (SHP)

If you employ five people or more and don’t provide access to an occupational pension, you must provide a stakeholder scheme and offer your staff basic advice on what it entails. You are not legally required to contribute to the fund, and members take any financial risk.

Employees who join the scheme must be offered a payroll deduction facility to enable them to make contributions, and employers must maintain an accurate record of all employee payments and deductions.

Group personal pension scheme (GPP)

GPPs are made up of a cluster of individual pensions. Companies must collect each staff member’s contributions through the payroll system and pass them onto the pension provider directly.

If you want to use the GPP instead of a stakeholder scheme, you must make minimum contributions of 3% per staff member.

The scheme provider is responsible for administering the programme, not the employer. However, the employer may face charges if employees stop making contributions. This sort of scheme is typically offered by newer businesses with no previous scheme history.

Monetised incentives

There has been a rise in the overall cost of living, which could be impacting your employees’ financial wellbeing. If your employees are worried about their finances, it can cause stress and lack of sleep, which can affect their mental health.

Many of the benefits we’ve listed above serve as an indirect solution for improving staff financial wellbeing. However, there are also more direct routes you can take to help your team balance their personal banking sheets.

Staff discounts

An employee discount scheme is a way for you to help your teams save money on everyday purchases. They can take many forms, including a dedicated platform. Other discounts can be purchased as gift cards, vouchers and eVouchers.

You can choose to create your own discount card to give out to employees. More simply, however, organisations can collaborate with a dedicated employee discount provider to take care of this aspect.

Staff discounts are an attractive perk for both employer and employee. They can offer large savings for staff, playing the role of a pay rise. But the money is being spent in the business, so the company gains as well. Plus, encouraging your employees to engage with your products or services will have an impact on organisational culture.

Commissions

Commissions are a form of variable pay remuneration for services rendered or products sold. Rates range from 5% to as much as 50%, but most companies pay between 20-30%.

For obvious reasons, they are generally paid to salespeople. To ensure a more democratic reward system, offer a commission to any worker who enables a transaction. For example, rewarding a marketing manager if their campaign leads to a boost in sales.

Bonuses

Some employees will always be motivated by money, particularly those in strongly performance-driven environments, such as sales. Cash bonuses can be awarded as a one-off payment when staff motivation needs a boost, or linked to performance targets and paid on a more regular basis.

Share schemes

Share schemes do exactly what their name suggests. Employees are given a certain number of shares in their contract, aligning their interests with those of shareholders and motivating staff to be more productive.

We recommend you think carefully before implementing this policy, as there are some significant drawbacks to consider. Be aware that only rewarding your employees based on the success of the business could mean employees expect a higher financial reward than they’ll receive.

Often, organisations also advertise a lower salary and factor in a share scheme as part of the remuneration package. However, this is a risky move as employees could feel cheated if the value of their shares drops.

Referral programmes

In the current hiring crisis, it’s become exceptionally difficult for SMEs to onboard new talent. As a result, many have chosen to introduce referral programmes to encourage existing employees to do the work for them.

Provided a new recruit passes probation, the worker who sourced them receives a lump sum (chosen by the business owner) as a reward. As well as filling a gap in your workforce, hiring staff who have an existing positive relationship is an easy way to promote good collaboration within a team.

Discounts to local businesses

With this, employers can offer special deals or reduced prices by partnering with nearby shops, gyms, restaurants or bars. For employees, this can help save money on everyday expenses while also encouraging support for the local business community.

Start by checking out which local spots your team likes, then reach out to see if those places are up for giving your employees any deals or discounts. Also, make sure everyone knows what’s available and how to use it, so that they don’t miss out and can make the most of the perks on offer.

Training and Development

Entrepreneurs cannot expect their business to scale if their employees are not apportioned the same growth investment. After all, a wage packet is not the only motivating factor for doing a job. Staff want their time at a company to be beneficial for their overall career.

People are a fundamental asset for companies so make sure you continue to invest in their career development. Failure to do so will result in workers feeling undervalued and under stimulated, which can contribute to higher turnover.

Professional development workshops

These are an effective and appealing training initiative. They can also upskill staff, which can help to plug any gaps you have in your existing talent offering.

Types of workshops include:

• Technical skills (copywriting, social media management, data analysis, etc.)
• Soft skills (communication, presentation, teamwork, etc.)
• Safety training (first aid, construction safety, food service safety, etc.)
  

Lee Murphy, Founder of The Accountancy Partnership, said: “Hiring doesn’t end when the employee is onboarded. There is the ongoing role of ensuring these people are properly trained, managed and supported so that they are getting the most out of being an employee and in turn committed to and working hard for the business.”

Onboarding

When a new person is hired, the business often mistakenly believes that the hard work is done. But just because a candidate impressed during an interview, it doesn’t mean they will just fall into place and start making you money.

Part of the employee onboarding process, a good orientation and induction programme does wonders to retain new hires and make sure they feel like a member of the team. Usually conducted in your first week on the job, it educates staff on a number of topics like corporate culture, company mission, and available benefits.

Apprenticeships

These are work-based training programmes where employees can learn a trade or skill while earning a wage. They often involve a mix of practical, hands-on experience with classroom-based learning or online courses – allowing people to gain real-world skills and qualifications at the same time.

In the UK, the number of apprenticeships for the 2024/25 academic year (August 2024 to January 2025) has increased by 1.0% to 202,520 – compared to 200,550 for the previous year.

Businesses should start by looking for any skills gaps or roles that could benefit from on-the-job training. You should also partner with accredited training providers, so that apprentices can receive good-quality education as well.

Technology and equipment

It’s important to kit your team’s or teams’ workstations out with the necessary gadgets to ensure they don’t encounter any unnecessary obstacles when logging on.

This is particularly true if you want to operate a hybrid working policy. Homeworkers will need to be given all the gadgets necessary to carry out their job just as they would in the office.

Our researchers found that cost is the biggest barrier for small businesses when purchasing new technology, with finance being cited as an obstacle for 50% of SMEs.

That said, we recommend following the rule of ‘less is more’ when it comes to equipment and really think about what you do (and don’t) need to buy to save on spend. Here’s a list of the must-have items:

• Laptop or PC computer monitor
• Keyboard
• Computer mouse
• Ergonomic office chair

Don’t let your team down with slow office internet either – see our guide to the best broadband providers for SMEs.

Business mobile

Another extra you could offer is a business mobile – a company-paid phone that employees can use specifically for work-related calls and email. This can help keep personal and work communications separate and can make staying connected easier, especially for remote or on-the-go staff.

However, you shouldn’t just hand a business mobile to anyone. Instead, you should decide which employees really need one, based on their role and communication needs. Additionally, make sure to set clear policies around usage and security to avoid any misunderstandings and protect company data.