Three cost-saving strategies that don’t compromise on health and wellbeing
With the increase in employer NIC payments and the National Minimum Wage upon us, cost-saving strategies are a top priority for businesses.
Employers aren’t the only ones feeling the strain, and with some organisations reducing headcounts, families across the UK faces reduced incomes.
Cost-saving may be a priority, but if it compromises employee physical health and wellbeing there could be a longer-term price to pay.
How are employers saving money?
In its blog, Benefits on a Budget: Employee Discounts Schemes, Pluxee UK discusses the 3% median pay rise reported in January 2025.
This figure is 1-1.5% less than previous years and reflects the current climate.
The pace of redundancies is at a four-year high due to employers cutting costs by reducing headcount.
As a cost-saving strategy, it can negatively impact employees' physical health and wellbeing.
With redundancies, there’s always a hidden cost to consider, not just the impact on employee engagement, but also workplace stress levels.
Restructuring and redundancies may sometimes be unavoidable, but having a wellbeing plan for the remaining employees is vital.
The process causes stress, and if the work handled by the employees who have left is to be absorbed by those who remain, it can lead to burnout and ill health.
Where savings and wellbeing meet
One of the most impactful ways employers can save money is by encouraging the uptake of salary sacrifice schemes that reduce employer National Insurance contributions without compromising the employee experience or wellbeing.
1. Cycle to work salary sacrifice schemes
In its blog, Salary Sacrifice and Your Business Cost-Savings Strategy, Pluxee UK details how a cycle to work salary sacrifice scheme can reduce employer NIC.
A green car scheme delivers even more savings as a higher value benefit, but cycling is the topic of focus for health and wellbeing.
Employees who cycle to work or in their personal life are physically fitter, benefitting from better sleep and a healthier lifestyle.
Cycling is also an effective way to reduce stress while making the cost of a new bike more affordable.
Encouraging employees to enrol in a cycle to work scheme helps employers reduce NIC overheads without compromising employee wellbeing.
2. Annual leave purchase schemes
An annual leave purchase scheme isn’t a salary sacrifice product, but they save businesses money.
They’re also popular among employees who value work-life balance and are happy to pay for more days off.
That's how the scheme works – employees pay for extra holidays beyond their contracted allowance, reducing their monthly salary and employer NIC due to the pay reduction.
Annual leave purchase schemes boost employee wellbeing while saving businesses money.
3. PMI vs digital health platforms
Private medical insurance (PMI) is almost a ‘staple’ employee benefit, and nearly one in eight people in the UK have some form of PMI.
Still, as common as it has become, PMI costs are increasing and vary depending on employee age and any known health issues.
Digital health platforms are a fraction of the cost of PMI with a set price per employee, regardless of other variabilities.
Research suggests that younger generations are less likely to take up PMI since it’s taxed as a benefit in kind and affects their take-home pay.
There may also be occasions when some employees find themselves excluded from PMI or face restrictions.
A digital health platform doesn’t cover treatment in the way PMI does, but it costs employers far less and makes medical support more accessible to all employees faster than if they were going via the NHS.
Cut costs without compromise
Cost-saving strategies can negatively impact employees' physical health and wellbeing, but they don’t have to.
This article presents three ways to save money without compromising employee wellbeing, but more solutions are available, like a four-day working week or job sharing.
Explore the opportunities your employees may be interested in to create a bespoke strategy for your business.
Supplied by REBA Associate Member, Pluxee UK
Pluxee UK, is a leading employee benefits and engagement partner that opens up a world of opportunities to help people enjoy more of what really matters in their lives.
