01 Sep 2025

Rewriting the rules of recruitment, retention and diversity in 2025

Employers must elevate their employee benefits game if they want to attract top talent.

There is fierce competition for exceptional talent. To stand out, firms must prioritise comprehensive and innovative employee benefits as part of their employee value proposition (EVP).

Expectations are shifting as workforce demographics evolve with incoming Millennials and Gen Z employees. Benefits packages are no longer supplementary but a pivotal component of a firms EVP, ensuring they can attract and retain top-tier talent.

Rapid onboarding processes and benefits tailored to various roles, whether front, middle, or back office, further enhance an employer's attractiveness. These measures reduce recruitment barriers, enabling firms to secure high-performing candidates efficiently.

This article explores how these strategies can reshape recruitment, retention and diversity

Comprehensive benefits as a competitive edge

Organisations offering robust and accessible benefits gain an edge in attracting top performers.

In fact, recent research from the Department for Business and Trade shows that companies embracing open minded working policies can attract more talent, improve staff motivation, and reduce staff turnover, ultimately boosting business productivity and competitiveness.

Twenty-first-century employees expect more than traditional offerings, prioritising health, financial, and wellbeing support.

According to Public Health England, poor mental health among employees' costs UK businesses between £42bn and £45bn annually, with a significant portion resulting in absenteeism and reduced productivity.

With 6% of employees changing jobs due to a lack of flexible working and supportive benefit options, and 12% leaving their profession altogether, organisations must ensure their benefits align with modern workforce expectations, underscoring the necessity for competitive benefits and a well communicated EVP.

A well-defined EVP ensures that employees fully understand not only the financial and wellbeing benefits available to them, but also the broader value of working for the organisation, from career development pathways to work life balance initiatives and beyond.

The CIPD reports that:

44% of employers plan to increase spending on career and professional development benefits, which includes enhanced benefits offerings to attract and retain employees.
35% of organisations have improved their staff benefit package to enhance recruitment and retention.
55% of organisations that faced recruitment challenges revamped their benefits package to attract and retain talent.
32% of organisations introduced new benefits or improved existing ones to promote work-life balance.

The significance of these packages and what it means to be a part of a strong business culture has never been more important, yet there's still more that can be done. A well thought out benefits programme allows organisations to assess and measure overall EVP, which is vital in today's recruitment environment.

Healthcare is evolving

Traditional health benefits are being redefined to support holistic and family-centric needs, aligning with new, less structured working models.

Expanded offerings now include fertility treatments, private maternity care, and family healthcare packages. These changes reflect a growing commitment to inclusivity and work-life balance, addressing diverse employee needs and fostering loyalty.

While many employers prioritise gym memberships and app subscriptions, the modern workforce holds a preference for more tailored and considered enhancements, including mental health support, financial wellbeing initiatives, and improved work-life balance strategies.

Benefits contributing to wellbeing, such as mental and physical health, work-life balance, and job satisfaction are deemed just as crucial as traditional incentives such as salary and bonuses for many employees looking at overall EVP.

Bridging this gap, therefore, is critical for attracting a broader talent pool and ensuring long-term employee commitment to a firm, essential for talent retention.

Prioritising wellbeing

Employee wellbeing initiatives are increasingly important in retaining talent. According to WHO, every £1 invested in mental health initiatives results in £4 in improved productivity and health outcomes.

Additionally, research from the UK Government's Work, Health, and Disability Green Paper estimates that poor health and workplace absence costs the UK economy over £100bn annually, reinforcing the need for strong employer-led wellbeing programmes.

There is a clear link between wellbeing and performance, with further research by Säid Business School (Oxford University) reporting a strong correlation between employee wellbeing interventions and productivity improvements within business of between 10% and 21%.

This should be a key focus in high-pressure, high-performance firms as the workforce continues to prioritise wellbeing in career decisions.

Benefits of learning and development-based benefits

Outside of the scope of health and wellbeing, learning and development related benefits bring significant advantages. These should be a key focus in high-pressure, high-performance firms as the workforce continues to prioritise education and growth in career decisions.

A study from the University of East Anglia in conjunction with the British Government found that employees who undergo high-intensity job-related training experience an increase in life satisfaction and workplace engagement, translating to higher productivity and retention.

Firms with tailored benefits are better positioned to enjoy lower turnover rates, greater loyalty, and higher employee satisfaction compared to those who fail to adapt to a new, more forward-thinking policy.

Advancing diversity and female leadership

Diversity, equity, and inclusion (DEI) remain critical to long-term success.

The latest FTSE Women Leaders Review highlights both the strides made and the challenges that remain in achieving gender balance in senior leadership within the UK’s largest companies. With 43% of FTSE 350 board positions now held by women and 35% of leadership roles filled by female executives.

However, significant gaps remain, reaching parity in executive roles remains an ambitious goal that will require continued commitment from businesses, investors, and policymakers alike.

Offering DEI-focused benefits, such as extended maternity leave, menopause care, and childcare support can close these gaps, fostering diverse leadership pipelines and improving succession planning.

In summary

Employee benefits have evolved from being a supplementary consideration into a strategic necessity.

Comprehensive, inclusive, and wellbeing-focused strategies are essential for attracting diverse talent and fostering leadership development. Wellbeing should remain front and centre, with an emphasis on tangible, measurable outcomes; wellbeing can no longer be addressed through a simple tick-box exercise.

However, the effectiveness of these benefits hinges on clear and consistent communication of the firms EVP.

Firms that effectively articulate and embed their EVP in addition to their benefits across internal communications, leadership messaging, and recruitment strategies will not only meet workforce demands but also strengthen employee engagement, increase retention and position themselves as leaders in a competitive talent landscape.