Marvin OnumonuCanada Life found that six out of 10 small to medium-sized enterprises (SMEs) plan to alter their employee benefits due to the rise in employer National Insurance contributions (NICs).
Contributions have now increased from 13.8% to 15%, and the secondary threshold has dropped from £9,100 to £5,000 per year.
A survey from Canada Life has found that 61% of companies intended to modify their approach to insurance-based benefits to cut costs.
While 23% said they would focus on raising awareness of the existing benefits, 22% planned to reduce available benefits, and 18% would change what they offered.
Also, 15% indicated employees might need to pay for their insurance health-related services through salary sacrifice, and 5% would cease offering benefits entirely.
Medium-sized firms, those with 50 to 249 employees, were more likely to adjust their benefits.
Among micro employers, only 27% currently offered insurance-based benefits.
Popular benefits included group life insurance (29%), private medical insurance (27%), and annual health checks (26%).
Additionally, 20% of companies provided group critical illness cover, 16% offered occupational health services, and 14% covered group income protection.
Chris Morgan, head of product and proposition strategy at Canada Life, said: “Our findings show that under increasing cost pressures, many SMEs are reviewing the employee benefits they provide to find savings.
“Given their knowledge of the positive impact these benefits have on employee health and business productivity, workplace protection advisers are well-placed to support firms and ensure any changes are carefully considered.
“We know as an industry what a positive impact employee benefits can have on financial, physical and emotional wellbeing.”
Morgan added: “It’s important that insurers and advisers work together to demonstrate this value and bring it to life for SMEs, so they can see why continuing to invest in employee wellbeing should remain a business priority.
“It is encouraging that some employers already recognise the importance of employee benefits in business success, as 39% are not planning to make any changes.
“Of the six in 10 who are planning changes, more than a third plan to boost awareness and engagement in the benefits provided, rather than reduce provision.”
He said: “With the Mayfield Review underway, the need for government, insurers, experts and businesses to work together to solve health challenges in the workforce has never been greater.”
