Startups are as vital as ever to the UK’s economy, with over 890,000 new companies registered at Companies House during 2024. Richard Gould, Director of Small Business Solutions at Howden Employee Benefits provides some insight into which benefits help build growth for start businesses
Whether those businesses are a side project at a kitchen table or competing with multinationals on a global basis,
all will recognise the importance of having a talented, productive workforce that enables their business to grow for the future.
Over 100 decision-makers in UK startups shared the challenges they are facing, and how their employee benefits are helping them to address those issues, for our Benefits that build – Exploring the impact of employee benefits on startup growth research undertaken in partnership with You Gov. Respondents surveyed had been in business between two and five years, and were either solely or jointly responsible for employee benefits decisions.
We found that many startups are already committed to supporting their employees’ health through products such as private medical insurance (PMI), mental health and wellbeing support, virtual GPs and more. However, decision-makers also realise that they must evolve their benefits offering for the future, so that they can continue to attract and retain the best talent.
Health in the spotlight
The last few years have shown how much sickness absence can impact businesses of all sizes. NHS and GP waiting lists, growing awareness of mental wellbeing in the workplace, and employee expectations about the role employers play in their wellbeing have all become higher priority.
Startups are already responding to these challenges through their employee benefits. Private Medical Insurance (PMI) is offered to 41% of employees in startups, and 38% have access to mental health and wellbeing support. Commitment to employee health is becoming more intense, with 32% more planning to introduce PMI within the next two years. A further 15% also intend to increase their current PMI offering.
Day-to-day and long-term
On a day-to-day basis, the right health benefits provide employees with tools and information to help them keep well and reduce sickness absence. Employers are seeing the advantages of this, with 51% saying that their benefits are helping to develop a productive and healthy workforce.
Our respondents also see wider business advantages from healthcare benefits. For example, almost a third (31%) say that recruiting and retaining skilled talent is one of their top three business challenges. And nearly half (46%) believe that their benefits programme has at least some impact on their ability to attract and retain employees.
Building for the future
Startups know that they can’t afford to stand still. Offering a credible salary alone is no longer enough to remain competitive in the search for talent, and a fifth (20%) say that they need to make changes their benefits to better meet employees’ needs.
From a strong starting base of offering healthcare benefits and a workplace pension (provided by 80% of startups), 35% of respondents are considering adding gym and lifestyle discounts, and 34% have plans for Group Life Assurance.
Understanding employees’ benefits needs, then finding the right solutions to meet them, can put big demands on a startup’s finite resources. Howden Employee Benefits understands the breadth and depth of challenges facing a startup, because we’ve been one ourselves. From 1994 when three friends founded the company, to today’s global business, we’ve always stuck to our people-first principles. That includes a key focus on our own employee benefits as an essential part of our recruitment strategies and ongoing success.
Our experience and knowledge has put us in a great position to help today’s new and growing organisations build competitive benefits solutions, while keeping programmes manageable and affordable. And as a startup grows, we can continue to make sure employee benefits keep pace with employees’ needs and set businesses up for future success.