Zarah ChoudharyTailored benefits are reshaping workplace management, shifting away from the one-size-fits-all approach to something much more personalised.
In the UK, this shift is gaining traction, especially in sectors struggling with recruitment and retention, such as professional services and engineering.
Charles Cotton, senior reward and benefits adviser at the CIPD, speaks of this growing need for personalised benefit structures: “Given that many people have come to expect a more personal service from the firms they buy their goods and services from, employees will expect their employer to also give them some freedom to adjust their benefits to better suit their preferences.”
Tailored benefits offer exactly this: flexibility. Employees can adjust workplace perks to fit their own unique circumstances – a far cry from standardised packages that risk failing to meet the diverse needs of a modern workforce.
Unlike completely personalised benefits, which can be much more expensive and complex, tailored benefits offer a balanced approach. Employees have some say in the perks they receive, but within the structure of an existing system.
Cotton says this is more efficient than offering benefits that employees do not value or use.
He explains: “Standardised benefits may not meet the needs or wants of all employees, so some of the money being spent on them is being wasted.”
By tailoring benefits, businesses can ensure they allocate resources in a way that truly resonates with employees, who feel more engaged and valued as a result.
This move toward tailored benefits is especially significant as younger generations join the workforce.
Research by Deloitte reveals that 77% of Gen Z employees value flexibility and personalisation in their roles, highlighting a clear generational shift. Younger employees are increasingly looking for roles that align with their personal values and lifestyle.
Companies that fail to adapt to these demands risk losing out on new talent to more forward-thinking competitors.
Practical realities
The impact of tailored benefits is not just theoretical. Companies that have implemented such strategies are seeing positive results.
At PwC, for example, the ‘Be Well, Work Well’ initiative integrates physical, mental, and financial wellbeing programmes to comprehensively support employees.
Virgin has adopted a similar approach with a flexible holiday policy, allowing employees to take leave as needed, as long as their responsibilities are covered which is something that reflects growing trust and autonomy in the workplace.
However, implementing these benefits does not come without its challenges. For example, Cotton warns about the risks of offering too much customisation: “There may be resentment among staff if an employer personalises its benefit offering for only some of its staff.”
This can create feelings of unfairness if, for instance, tailored benefits are only offered to senior employees, leaving others with a one-size-fits-all package.
Companies must make sure their approach is fair and transparent, and that employees understand why certain benefits are available to them.
Another obstacle is helping employees make informed decisions about their benefits.
Cotton provides a cautionary example: “An employee might decide to dial down their employer pension contribution to pay for an increase in their annual leave allowance. However, years later, they realise that they will have to postpone their retirement.”
To avoid such situations, employers must offer guidance on the long-term impact of benefit choices, ensuring employees understand what they might be sacrificing.
Emerging technologies are also helping streamline the implementation of tailored benefits. AI-driven platforms like Isio.beam, for example, are being used to match employees with the benefits that best suit their needs.
By analysing data on employee preferences and behaviours, these platforms recommend benefits that align with individual priorities. For instance, they might identify a high demand for mental health support or childcare assistance, allowing companies to adjust their offerings accordingly.
Cultural shift
Looking ahead, it seems clear that the trend towards tailored benefits is here to stay.
As Cotton notes: “As employers expect their people to be adaptable in how they do their work, employees may also expect more flexibility in what their employer is prepared to offer.”
This cultural shift is being reflected in the rise of hybrid and remote working models, allowing employees greater control over how and where they work.
One company that’s embracing this flexibility is KPMG UK, which has introduced a ‘four-day summer week’ policy, giving employees an additional day off during the summer months. This policy aims to boost morale and improve work-life balance, something that has become a priority for many employees.
Ultimately, tailored benefits are about more than just providing perks, they represent a deeper shift in how companies interact with their workforce, and a demand for relevance and personalisation from the workforce itself.
Companies that understand this will not only engage with their employees more effectively, but also see higher retention rates and a stronger morale boost.
As Alexis Parrish from Isio concludes: “Employers who can provide relevant, meaningful options will see greater uptake of benefits, stronger employee retention, and a more engaged workforce.”
