Is it time for low-paid industries to embrace employee benefits?

For decades, industries like retail, hospitality and healthcare have operated under a shared assumption that employee benefits are a luxury reserved for high-margin sectors. But that assumption is now being dismantled, says Benifex’s chief innovation officer Gethin Nadin.

The pandemic, shifting workforce expectations and competitive talent pressures are forcing a reckoning. It’s time for industries employing lower-paid workers to start offering high-quality employee benefits schemes to secure both their people’s futures and their own.

A sector-wide wake-up call

This month, I was invited to present to the board of directors for one of the world’s largest grocery chains – an employer with close to half a million people. My remit was to convince them that employee benefits will be essential to the future for retail. Whether or not I succeeded is still up in the air, but I certainly convinced myself that lower-paid industries must wake up to the role benefits will play in their future success.

Retail, hospitality, and healthcare are among the UK’s and US’ largest private sector employers, yet they've historically offered the least when it comes to employee benefits. High turnover, thin margins, and operational complexity once made benefits investment seem impractical. But the landscape has changed.

These employers are now appearing far more frequently among those using employee benefit technology. Wider adoption of employee-funded benefits and technology has removed historical barriers to access, enabling far more lower-paid and “deskless” workers to engage in employee benefits.

This shift is backed by data: employee benefits can be more effective at reducing turnover than wage increases. In retail — where turnover can reach 130% — this insight is transformative.

A 2025 study found that competitive benefits are now essential to reducing churn, and half of HR leaders agree.

We also now know that lower income employees are increasingly asking for support over and above pay. In fact, almost 60% of retail workers now see benefits as “table stakes”, while 83% of hospitality workers say employee benefits influenced their decision to switch jobs.

Benefits as a performance lever

Over the past year, I’ve reviewed countless case studies and data points that prove just how impactful benefit schemes can be to organisational success. The evidence is now unequivocal: organisations offering comprehensive benefits outperform those that don’t - and for lower-paid industries, the impact can be even more pronounced.

Healthcare employers such as Bupa, often have a deskless workforce. They wanted to provide better benefits to engage and support their care-home workers, while improving employee retention and reducing their reliance on agency staff. They credit employee benefits with improving employee wellbeing, bolstering retention, and reducing sickness – all contributing to overall performance over the last three years.

In retail, global employers like Costco and Mercadona have demonstrated that investing in employee benefits leads to lower turnover and higher productivity. Costco’s turnover rate is just 8% - a staggering 52% lower than the industry average - while Sam’s Club saw a 16% rise in productivity and 25% increase in sales after enhancing the benefits on offer to their staff.

And this isn’t anecdotal. A longitudinal study of 20 firms found a statistically significant relationship between employee benefit investment and profitability metrics like return on equity and profit after tax. High growth global employers consistently offer a broad array of benefits, and highly profitable companies tend to offer most “sought after” employee benefits.

Multiple interlocking barriers

One reason demand for employee benefits and wellbeing support is rising among lower-income workers is that they face unique barriers that limit their ability to thrive at work. Essential bills “eat away” a disproportionate share of income: employees in the lowest 10% of earners spend 41% of their income (after housing) on utilities alone. This drives greater demand for employee discounts and energy and mortgage switching services.

Additionally, low earnings correlate directly with poorer health outcomes and higher wellbeing risk. Employees in the bottom 40% of income are twice as likely to report poor health than those in the top 20%. Transport and childcare - both critical to job access and progression - pose additional challenges. Supporting the life stages, finances, and wellbeing of lower-income workers is therefore increasingly essential.

Rise of high-impact benefits architecture

The traditional ROI model for benefits (typically focused on cost containment) is no longer sufficient. What’s emerging is a new framework: High Impact Benefits Architecture. This approach positions benefits technology as a driver of organisational performance, not just a support function.

According to Benifex’s Propel report, shows that productivity and business growth have overtaken traditional metrics as the primary outcomes of employee benefits programmes – both critical to low-margin sectors such as retail and hospitality. Benefit apps that offer personalisation, decision support, and seamless user experiences are enabling even low-margin sectors to deliver high-quality schemes at scale.

Technology is the enabler

Technology has made it possible to offer benefits to dispersed, shift-based, and frontline workers - groups historically excluded from traditional schemes. Modern benefit apps allow lower-paid and “deskless” employees to access personalised options tailored to their life stage and individual needs. Decision assistance is helping employees understand and engage with complex offerings, and improve their financial literacy and resilience.

A high-grade user experience also reduces friction and increases uptake - something 82% of hospitality workers say they want through a single app bringing benefits and wellbeing services together. As Alan Smullen, head of people at global hotel chain The Doyle Collection told me, such an app is “essential”.

A strategic imperative

Industries that have long offered high-quality benefits are now actively targeting talent from retail, hospitality, and healthcare. The CEDEFOP finds that medium skilled sectors are actively recruiting workers from low-skilled, low-pay backgrounds including retail and hospitality. These sectors are vulnerable to talent drain unless they evolve.

The presence of benefits technology is now so strongly associated with high-performing organisations that it can be used as a predictor of growth. The question is no longer whether low-paid industries can afford to offer benefits - it’s whether they can afford not to.

The data is conclusive: benefits drive retention, engagement, productivity, and profitability among lower-paid sectors.

If you want to read more about how benefits can move the needle on organisational success metrics, including real-life examples, check out our Metrics that Matter report.

Some of the forward-thinking employers that are already making strides include Bupa, Tesco, Gatwick Airport, Ocado, Currys and Bromford Housing. For these organisations, this is a moment of opportunity. By investing in employee benefits, they’re not just improving lives - they’re building a more resilient, competitive, and future-ready business.