Employee Benefits
7 mins read

Employee Benefits for Small Businesses

How to choose a small business employee benefits package that your staff will value—and actually use.

Jonathan Roomer | Co-Founder & CCO of YuLife - 10 April 2025

The best employee benefits packages may once have been the preserve of big corporations but small to medium-sized enterprises (SMEs)—generally defined as businesses with fewer than 250 employees and a turnover of less than £36 million—are increasingly recognising the value of offering employee benefits.

Even small businesses—those with fewer than 50 staff and a turnover of less than £8.5 million—can put together an effective employee benefits package, in terms of both the value delivered to staff and the benefits enjoyed by the business. 

What employee benefits are required by law in the UK?

Benefits that employers are legally obliged to offer to staff include holiday pay (determined by the number of hours worked), statutory sick pay, an auto-enrolment pension, and paid maternity, paternity, and adoption leave.

The Carer’s Leave Act, which came into force in April 2024, also grants employees the right to a week’s unpaid leave a year to care for a dependant with a long-term care need.

Employers can choose to enhance that offer by providing a small business employee benefits plan that not only proves how much existing staff are valued, but also helps to attract new talent—something that is particularly useful if you can’t yet afford to pay the highest salaries. 

This was the situation that tech startup Culture Shift found itself in. “If you have an organisation like we have, with real purpose at its core—and you walk the walk in terms of how you look after your employees—people that have joined us have maybe taken a slight salary sacrifice in order to have those things,” says Gemma McCall, co-founder and CEO of the Manchester-based firm.

How much do companies spend on employee benefits?

The cost of employee benefits for a small business will depend on factors such as the industry it’s in, the number of staff it has and which benefits it chooses to offer, but job hunters are increasingly saying that workplace benefits are a key factor when it comes to choosing a job.

And, according to a Forbes Adviser survey, 1 in 10 workers would take a pay cut to have access to better benefits.

Wellbeing is increasingly recognised as vital for workplace retention. According to data from YuLife’s Workplace Wellbeing Trends 2025 report, 71% of respondents who rated their wellbeing as “good” said they would not be looking for a new job in 2025, compared to only 30% of those with poor wellbeing.

It’s clear, then, that the benefits of employee benefits usually far outweigh the costs associated with investing in them.

Small business_Image 3.png

What are the most common types of employee benefits for small businesses?

People tend to worry most in life about their health and their finances, so it’s no surprise that employee benefits for SMEs usually include Health Insurance and Life Insurance (also known as death in service).

Small businesses are unlikely to have the time or budget to source employee benefits from multiple vendors, though, so this is where a combined approach to a small business employee benefits package can pay off.  

“Many of my clients start with the death in service benefit, but then consider Income Protection,” says Amy Hazlehurst, SME Wellbeing and Engagement Consultant at YuLife.

“I think death in service and Group Health Insurance are the two biggest value benefits from the package that we offer at Culture Shift,” adds Gemma. “But, those are things that you need when things go wrong.” 

A suite of ‘here-and-now’ benefits, such as reward schemes and discounts, can provide more tangible benefits to employees. One of YuLife’s most popular small business employee benefits is its Virtual GP service. YuDoctor provides 24/7 unlimited access to healthcare professionals by video, phone, or message consultation.

If you’re an SME that doesn’t have the budget for small business health insurance, a virtual GP is the next best thing, enabling employees to arrange consultations for themselves and their family when they need them.

YuMatter, YuLife’s Employee Assistance Programme (EAP) centres on mental, financial, and professional wellbeing. It’s a confidential service that is accessible in the Wellbeing Hub of the YuLife app and includes 24/7 online access to qualified mental health experts and structured clinical counselling, with the option to add on musculoskeletal, nutrition, sleep support and more.

“When I initially talk to a client, I want to know what their strategy is around wellbeing,” says Amy. “That’s how I can qualify what will be impactful and special and exciting and fun for the people. After all, small business employee benefits are supposed to be fun, they’re not meant to be sat in a desk drawer and never looked at.”

Small business_Image 1.png

Engagement with employee benefits for small businesses 

Traditional small business employee benefit packages often fall short because staff fail to engage with them. YuLife, however, has built its model around behavioural science and gamification. Unlike standard corporate wellness programmes, which struggle to get even 10% of employees engaged, YuLife’s data tells a different story.

At IT recruitment consultancy Cloud International, for example, 97% of employees downloaded the YuLife app after having “literally zero” engagement with previous employee benefits platforms. 

And the effects are lasting—84% still engage with the app after three months. YuLife ticked all the boxes, says Director of Operations Alix Hobbs. “It was the answer to our insurance needs. It talked a lot about wellness, which is hugely important to us, and we also got all these benefits that employees were not using previously.”

So, how do you achieve engagement?

  • Communicate your benefits plan – Build a set of promotional resources and share them across different channels to ensure your people are aware of what’s on offer. 
  • Make them easily accessible – Provide centralised, easy access to your benefits by meeting workers today where they are: their smartphones.
  • Incentivise use – Ensure staff use your benefits by incentivising them with employee rewards in a variety of forms that ensure there’s something that everyone will value, and use.

“The engagement levels we have with our SME clients are incredible,” says Amy. "In some cases, particularly with small clients that have 10-20 employees, we’re likely to see a 90-100% daily engagement rate because team members are more likely to be talking about the benefits with their colleagues.” 

And it is possible to achieve equally high levels of engagement with larger businesses. “Even with SME businesses which have employees numbering in the high double or triple figures, on average you’re looking at 69-74% active monthly users using YuLife. Compared to the national average which sits below 20% for a wellbeing package like this, it’s exceptional. And even if you go into mid-market and enterprise clients with YuLife, they’re still maintaining engagement levels of around 44%.”

Ash McDowell, Financial Director at Culture Shift, emphasises the importance of ROI when considering the cost of employee benefits for a small business. The firm’s main concern was to make sure the return it was making from its small business employee benefits plan was worth the price.

“We want every penny spent to provide tangible benefits,” he says. “What YuLife offers, above and beyond everybody else, is the added features, the competitive elements, the rewarding points, the benefits that are tangible to our employees right now. And we feel like we definitely made the right decision.”

At YuLife, we work with businesses of all sizes, even those who are self-employed and have just one employee.

Struggling to decide what to include in your small business benefits package?

Check out this benefits guide for people leaders, to make sure your wellbeing and benefits strategy is well-rounded and resonating. 

employee benefits package checklist.jpg

Share this article

Jonathan Roomer | Co-Founder & CCO of YuLife

As Chief Customer Officer of YuLife, Jonathan dedicated to enhancing customer experiences through his deep actuarial and startup expertise. A Fellow of the Institute and Faculty of Actuaries and former leader of KPMG’s Tech Growth team, Jonathan combines his entrepreneurial background with a passion for customer-centric solutions, ensuring YuLife’s approach is both innovative and effective.