15.05.2026

New research reveals the benefits that are most important to people

Paid sick leave continues to top the list of benefits and incentives that are most important to workers, according to new research by HR software provider Ciphr.

A poll of 2,000 UK employees found that over two-thirds (68 per cent) think company sick pay is the most important employee benefit to have – ranking it above all other benefits and rewards.

The next most popular work incentives are annual pay rises that match or exceed inflation – perhaps unsurprising after years of higher living costs – and flexible working hours (selected by 60 per cent and 58 per cent of surveyed employees respectively).

Pension contribution matching and having extra holiday allowance, on top of statutory minimum holiday entitlement and bank holidays, are also seen as valuable rewards by around half of employees (54 per cent and 50 per cent respectively).

Many of the benefits that employees prize most highly are those that support their health, wellbeing and work-life balance, and invest in their skills and future career development – highlighting that while being paid (as a salary or into a pension, for example) is a key motivator to why people work, it’s not all-important.

The top 10 benefits that are most important to workers are:

Paid sick leave / occupational sick pay (68 per cent of survey respondents)
Annual pay rises that match or exceed the UK’s inflation rate (60 per cent)
Flexible working hours (58 per cent)
Pension contribution matching (54 per cent)
Extra holiday allowance (50 per cent)
Upskilling (48 per cent)
Employee discounts scheme (46 per cent)
Paid overtime (42 per cent)
Hybrid working (41 per cent)
Personalised employee development (37 per cent)

Ciphr's research shows that the top 10 for an employee at the beginning of their career does differ somewhat from the top 10 of someone with decades of working experience. Different personal circumstances are also likely to affect people’s preferences for certain benefits.

Workers looking to build their professional qualifications may value paid study leave (selected by 34 per cent of surveyed employees), while those looking to work remotely (at home or abroad) may value the option to ‘work from anywhere’ (26 per cent). And others may want private health insurance (37 per cent), a salary sacrifice pension scheme (31 per cent), a four-day work week (28 per cent), discounted gym membership (26 per cent), paid carer’s leave (17 per cent), or pet-related benefits (12 per cent).

For workers over 45 years old, for example, getting their pension contributions matched (selected by 58 per cent of people in this age group) is comparatively more important than being able to work flexible hours or take extra holiday (52 per cent and 48 per cent respectively).

In comparison, employees further from retirement are more likely to value having flexibility over the hours they work (selected by 64 per cent of people under 45) or upskilling (57 per cent), than pension contribution matching (50 per cent).

What employees value vs what’s on offer

Many organisations see benefits as a core part of their recruitment, retention, and recognition strategies. So much so, that HR leaders named “providing a good range of employee benefits” one of their biggest HR priorities of 2026.

But how closely are employers tuned in to the types of benefits and rewards that their staff rate as important? To find out, Ciphr compared its latest findings with those from a separate survey (conducted last year), which asked 300 HR decision makers about their organisations’ benefits packages.

The good news for employees is that, generally, many of the benefits they want are being provided by many organisations. Over half of UK employers offer upskilling to expand existing skills (62 per cent of surveyed employers provide this), flexible working hours (59 per cent), employee discounts schemes (59 per cent), hybrid working (57 per cent), paid sick leave (56 per cent), personalised employee development (52 per cent), and pension contribution matching (52 per cent).

A further two in five employers say they provide paid overtime (46 per cent), extra holiday allowance (38 per cent), and annual pay rises that match or exceed inflation (38 per cent).

While employers’ views on the benefits and incentives that are most important to their workforces (ie what they offer them) tends to align with the incentives that employees say they value most, there are a few disparities. The widest gap between what employees value and what’s available to them is around pay rises linked to inflation. Three-fifths (60 per cent) of employees say pay rises that match or exceed inflation are important to them, but less than two-fifths (38 per cent) of organisations provide this (a 22 percentage point difference).

There’s also a 12 percentage point difference between the share of employees who want occupational sick pay (68 per cent) or extra holiday allowance (50 per cent) and the share of employers that offer these benefits (56 per cent and 38 per cent respectively).

Karen Lough, Director of People at Ciphr, said: “With employer National Insurance (NI) contributions rising and wage bills under sustained pressure, it's understandable that companies are scrutinising every line of their reward and benefits spend. But this research highlights a real risk in employers cutting back or standing still. It also shows that employees have clear priorities – paid sick leave, pay rises that keep pace with inflation, pension matching, and flexible working – and in several areas there are significant gaps between what they expect and what employers tell us they currently provide.

“Take paid sick leave for example – the top-ranking benefit chosen by employees. Only half (56 per cent) of employers offer company or contractual sick pay. This creates a situation where many employees may force themselves to work, when they may not be well enough to do so, because they can’t afford to live on SSP (Statutory Sick Pay). While the latest SSP reforms are welcome, and do make sick pay more accessible to lower earners and part-time earners, the changes don't fully bridge the gap for employees without company sick pay. That has consequences for productivity and long-term absence that employers often underestimate.”

Lough recommends employers take a data-led approach and spend time listening to their employees to understand their needs and priorities, and what benefits and training they want and value.

She says: “A strong, clearly communicated benefits package builds trust, helps reduce absenteeism and attrition, and drives operational resilience.

“Giving your people greater autonomy to choose the benefits they genuinely want helps make them feel valued and more motivated. But it’s important to be led by the data – use feedback from existing employees, and recent leavers, to understand what you’re doing right and what needs to improve. Interrogate your benefits uptake data – are your employees aware of what benefits they may already have access to? And benchmark to identify where to focus your investment for maximum impact.

“It won’t always be possible or financially viable to deliver on every specific request. But organisations that can act on employee feedback, wherever possible, and provide agile and flexible benefits schemes are more likely to have a more resilient and high-performing workforce.”

Phil Curtis, MD of flexible employee benefits platform FlexGenius (part of the Ciphr Group), added: “It is becoming ever-more important for employers to respond to the changing needs and priorities of employees as they progress through their working lives. A workforce that spans different generations, life stages and working patterns no longer responds to a single, fixed benefits package.

“What supports a graduate in their first job is rarely what supports a parent on phased return, or a senior leader thinking about long-term financial protection.

“Employees want to feel fairly rewarded for the value they bring to an organisation, and offering relevant, personalised health, financial and lifestyle benefits is an essential part of that.”

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