Can your benefits strategy handle rising sickness absence and payroll costs? Here’s how SMEs can stay ahead.
The NHS crisis isn’t just a healthcare issue – it’s a business one. With waiting lists at record highs and access to timely care increasingly out of reach, employees are turning to their employers for support. At the same time, employers are facing rising employment costs, including a National Insurance (NI) hike from 13.8% to 15% and a lower earnings threshold of £5,000.
For small and medium-sized enterprises (SMEs), this double pressure – rising costs and rising expectations – can make offering competitive employee benefits feel out of reach. But with the right strategy and partner, it’s possible to deliver real value without overspending.
The pressure is real for SMEs: NHS delays and NI hikes
The latest sickness absence report from the Office of National Statistics highlights the growing impact of long-term health conditions on workplace productivity. Sickness absence rates are at a 15-year high, with millions of workdays lost due to prolonged health issues.
NHS delays are making things worse, contributing to longer employee absences, reduced productivity and increased stress.
Meanwhile, since April 2025, employers are also facing:
- A higher NI rate of 15% (up from 13.8%)
- A lower earnings threshold of £5,000 (down from £9,100)
- Expanded eligibility for the Employment Allowance, now up to £10,500
These changes may generate billions for public services, but for employers they mean a significant rise in payroll costs.
Rethinking benefits: from cost centre to competitive advantage
Rather than seeing employee benefits as a financial burden, SMEs can treat them as a strategic tool to:
- Reduce absenteeism caused by NHS delays
- Improve employee wellbeing and loyalty
- Stand out in a crowded talent market
And it doesn’t require massive investment, just smarter choices.
Four smart ways SMEs can offer big benefits on a small budget
1. Turn payroll into a benefits engine with salary sacrifice
Salary sacrifice schemes let employees exchange part of their salary for benefits like pensions, holiday exchange, bikes or electric vehicles, before tax and NI. This reduces costs for both sides:
- Employers save up to 15% in NI contributions
- Employees gain more value through tax savings
These savings can be reinvested into benefits like virtual GP access or mental health support. It’s one of the most underused (and most powerful) tools in the SME toolkit.
2. Audit and optimise what you already offer
Many SMEs pay for benefits that employees don’t use or even know about. A simple audit can help identify:
- Underused services (e.g. retail discounts, dental, gym memberships)
- Duplicated or outdated offerings
- Gaps in support, especially around health and wellbeing
Redirecting spend from low-impact perks to high-value services like 24/7 virtual GP access or wellbeing support and counselling can dramatically improve employee wellbeing and your ROI while reducing reliance on the NHS.
3. Offer high-impact, low-cost perks that matter
Not all benefits require big budgets. Some of the most valued perks are surprisingly affordable:
- Cash plans for financial support
- Employee Assistance Programmes (EAPs) for mental health
- Flexible working to support work-life balance
- Cycle to work and season ticket loans for commuting
- Financial wellbeing tools for budgeting and debt
- Childcare support (a game-changer for working parents)
These benefits show empathy and understanding – qualities that build loyalty from employees.
4. Communicate like it matters (because it does)
Even the best benefits fall flat if employees don’t know about them. Use simple, tech-enabled tools to:
- Centralise benefit information
- Provide interactive guides or savings calculators
- Track usage and gather feedback
Clear communication boosts engagement and helps employees see the full value of what’s on offer, especially when NHS alternatives are limited.
“NHS delays and rising NI costs are creating real pressure, but with the right consultancy approach, we’re helping clients turn these challenges into opportunities. From salary sacrifice to smarter benefit audits, it’s not about spending more; it’s about spending better.”
– Lindsay Kenny, SME Business Development Consultant, Broadstone
The power of partnership
Working with an employee benefits adviser who understands SME constraints can make a huge difference.
The right partner can:
- Benchmark your offer
- Identify cost-saving opportunities
- Recommend scalable, tech-driven solutions
A unified digital platform can also reduce admin from HR teams, improve visibility and help employees access everything in one place.
Final thought: the NHS crisis and NI hikes are a wake-up call – not a wall
As an SME, you don’t need to offer everything. You just need to offer the right things, in the right way to your employees. By focusing on strategic, cost-effective employee benefits and improving communication, you can support your people, reduce absenteeism and gain a competitive edge.
In a world where NHS delays and rising payroll costs are the new normal, the smartest SMEs are those that turn constraints into creativity, and care into competitive advantage.
Ready to rethink your employee benefits strategy?
Let’s explore smart, sustainable ways to support your people and business – with impact that lasts.
