Rising cost is the biggest barrier UK businesses face when delivering employee benefits programmes, new research has revealed.

The 2017 Benefits Trends Survey from Willis Towers Watson found that 50% of HR decision-makers see rising benefits costs as a key challenge over the next three years, while 35% are concerned they will have insufficient budget to make benefits changes. Despite this, 40% claim they do not know their current total benefits spend, which could provide cause for concern.

However, there does appear to be recognition of a need for change. The study found 67% of companies plan to review benefits strategy and programme design over the next three years to better manage costs, while 69% intend to do so in order to better influence employee behaviours. “An increase in the cost of traditional benefits will understandably provide cause for concern but it shouldn’t be seen as prohibitive to implementing a programme of employee benefits that delivers business value,” said Mark Ramsook, Head of Sales and Marketing at Willis Towers Watson Health and Benefits.

“The challenge for businesses is to become more creative in the design of benefits schemes because a one-size-fits-all approach is rarely appropriate. Instead, consideration should be given to how benefits can be targeted towards areas of greatest need and how traditional products, such as medical insurance, might be supplemented by more niche products that can be used to address specific health issues in a more cost-effective manner.

“Employers should start by using available health risk data and employee feedback to identify trends and the underlying root causes. It is then important to build a clear picture of cost and desired outcomes resulting from each area of spend. This will make it easier to measure progress, reallocate spend where necessary and provide clearer evidence of return on investment.”

Further challenges to the delivery of employee benefits programmes outlined by the research include a lack of data to measure results (27%), changes to statutory benefits (26%), and the absence of an appropriate technology solution to deliver benefits (25%).