Jonathan AttiaUK workplaces are facing a perfect storm – rising costs, new legislation and shifting employee expectations. For many people, this translates into mounting financial stress and uncertainty about the future. It is therefore no surprise that engagement is suffering, with only one in 10 UK employees feeling truly connected to their work.
While often viewed as a culture problem, the impact of low engagement goes much further. If left unaddressed, it can have a significant impact on absenteeism, productivity and ultimately profitability, with Gallup calculating that low engagement costs the UK economy £293.5bn every year. In contrast, an engaged workforce is invested in their work and show up with a purpose and a drive to perform at their best and help the organisation grow.
To create an engaged workforce and ultimately drive growth and performance, HR leaders need to reassess the old playbook for employee engagement, evolving their strategy to reflect the realities of employees’ lives both in and outside the office.
Why traditional engagement models fall short
The latest Autumn Budget made the cost of employing people more expensive for the second consecutive year, froze income tax thresholds, introduced changes to Benefit-in-Kind (BiK) taxation, and announced salary sacrifice pension caps due in 2029, negatively impacting sustainable ways for both employers and employees to manage rising costs.
These changes, combined with cost-of-living pressures and eroded financial resilience, mean that many are struggling to keep up with bills or save for emergencies. One in 10 Brits have no savings at all, and employees are turning to their workplace for support and guidance. Yet, often, the options available fall short of what they truly need. 41% of workers believe the benefits offered to them could be better tailored to their needs, and this ought to be a red flag to businesses.
Employee benefits are an investment, but they only deliver a return when employees engage with them.
Generic approaches to engagement and wellbeing through blanket perks fail to alleviate the growing pressures the workforce faces, offering a cookie-cutter solution to a problem that is nuanced and diverse. Not only does this show that the business isn’t aligned with employees’ values and goals, it’s money wasted on a strategy that isn’t going to deliver results.
To support employees, drive trust, strengthen retention, and enhance resilience, businesses must approach their workforce holistically, considering what matters to employees in and out of work. In a climate where pay increases are financially challenging, milestone engagement – supporting key life events and recognising personal achievements – offers a cost-effective way to maximise the value of the overall employee offering, while creating meaningful connections and demonstrating genuine care.
The role of life milestones in shaping needs
Life milestones fundamentally change what employees need from work. Whether buying a home or looking after ageing parents, these moments can impact a person’s financial and mental wellbeing and even their career decisions. Research has found that two-thirds of employees experienced a major life event in the past two years, and more than half (51%) said these events reduced their ability to thrive at work by at least 25%.
When businesses create a culture of care by aligning engagement strategies with employees’ real lives, they don’t just improve wellbeing; they improve the bottom line. Research from Gallup found that a highly engaged workforce leads to less absenteeism, higher productivity and even an increase in profitability.
Practical steps for HR leaders
Supporting employees through life’s evolving responsibilities requires more than a one-size-fits-all approach. HR leaders need strategies that anticipate key milestones and deliver flexible, personalised support. Here’s how to make it happen:
- Map life stages across your workforce: Use anonymised data and feedback cycles to identify common milestones and segment needs by life context and not just age or tenure.
- Introduce flexible benefits: Allow employees to flex and build their own benefits through a module offering. This could include enhanced parental leave, childcare and eldercare options, mortgage and debt advice, and preventive healthcare.
- Offer tailored work patterns: Consider career breaks and re-skilling, flexible working for parents and carers – even pet owners. Think outside the box and be inclusive – can hours be changed to accommodate early birds, night owls or those balancing study with work? By understanding your team, you can create a personalised approach that reduces stress and allows them to thrive while at work.
- Make financial wellbeing a core pillar: Offer financial guidance that covers everything from debt management to saving for a home, combined with a personalised discounts platform, empowers employees to plan for the future while making everyday life more affordable.
- Make career growth a visible part of your offer: Give employees a clear development pathway that supports them through different life and career stages. This means integrating future-skills training and progression opportunities into your benefits package. When employees see that the business invests in their growth, they feel valued and can picture a long-term future with you.
- Communicate with clarity and relevance: Make it easy for employees to understand what support is available and when it matters most. Use simple, relatable examples to show how each benefit can help at different life milestones, so people can see themselves in the scenarios without feeling singled out.
Milestone-based strategies help HR leaders create a workplace that reflects real lives, not just job titles. When engagement is tailored to an employee’s needs, retention improves, productivity increases and both the business and the employee win. The UK’s engagement challenge won’t be solved by perks; it starts with making support relevant and giving employees the power to choose.
Jonathan Attia is CEO at Pluxee UK
