UK start-ups are prioritising private medical insurance (PMI), mental health support and group life as they overhaul their benefits schemes, according to research from Howden Employee Benefits.
It surveyed decision-makers in more than 100 UK start-ups with three-quarters (73%) planning to revamp their employee benefit programmes in the coming years.
In total, almost half (47%) of the UK start-ups quizzed planned to expand or introduce PMI and mental health support in the coming years and 34% were considering adding group life assurance.
In addition, 42% aimed to enhance their workplace pensions, and 35% intend to offer gym memberships or lifestyle discounts.
Almost half (46%) viewed employee benefits as essential for recruitment and their sustained business success, with the top three benefits currently provided by start-ups being workplace pensions (80%), PMI (41%) and mental health support (38%).
Focus on PMI
Howden said: “While the NHS remains the cornerstone of our healthcare system many start-ups are focusing on PMI to ensure employees have prompt access to healthcare services, given the current constraints and NHS waiting times.”
The report, Benefits that build – Exploring the impact of employee benefits on start-up growth said the shift reflected a growing recognition that employee benefits were essential tools for the recruitment and retention of talent and for business growth.
The research was conducted by YouGov among benefits decision-makers working in start-up SMEs – defined as those in operation between two to five years with fewer than 250 employees – between 29 May – 12 June.
Howden said in the competitive landscape of start-ups, where almost a third face challenges in recruiting and retaining talent, the quality of employee benefits was emerging as a key differentiator.
Howden said: “With an increasing focus on health and wellbeing, start-ups are providing lifestyle benefits such as gym memberships and lifestyle discounts.”
Richard Gould, (pictured), director of small business solutions at Howden Employee Benefits, said: “In 2023, the UK had 5.6 million registered businesses, with 99.9% classified as SMEs.
“Start-ups are an increasingly important element of this, with 801,006 new businesses created between 2022 and 2023, a 6.4% rise from the previous year.“