Employee benefits drive retention in the workplace. However, after a recent UK Benefits and Trends Survey found that 44% of UK workers are unsatisfied with their company’s benefits package, it could be time for your HR team to act.
With many businesses battling employee benefit barriers such as administrative burden, budget approval, and system design bias, it’s no surprise that retention rates continue to fall across the UK.
That said, as AI becomes more prevalent in the HR sector, the way businesses approach employee benefits is beginning to change.
With the power to personalise benefits schemes, reduce that administrative burden and save your company time and money while doing so, AI could be the solution you’ve been searching for.
Employee Benefit Barriers in 2026
Crafting a powerful employee benefits scheme is tricky post-pandemic. As flexible working, hybrid roles and WFH trends continue to define this decade, one size no longer fits all when it comes to handing out on-the-job perks.
Employees now crave personalisation in all areas of their career development, and their benefits package is no exception.
Another barrier to implementing a powerful employee benefits program in 2026 is the sheer cost of the benefits strategy itself. More than 8 in 10 employers now say that budget approval was their main barrier to implementing changes to employee benefits in 2024/2025.
A further 50% were also concerned about the rising costs associated with providing competitive benefits for their employees. As corporation tax continues to rise, alongside employer National Insurance Contributions (NICs), many businesses are already feeling the pinch.
(Image Source: Open Access Government)
Finally, let’s not forget about the time it takes to create and implement a powerful benefits package. 68% of HR teams cited a lack of resources and team capacity as their biggest barrier for change in 2025.
Without the right tools in place, maintaining your employee benefits strategy costs money, time and effort that most businesses are struggling to produce.
Navigating an AI-Powered Employee Benefits System
Could an AI-powered employee benefits system be the solution you’ve been searching for?
With more than 30% of HR departments now leveraging artificial intelligence to improve their services in 2026, employee benefits is just one of the sectors AI has the ability to transform.
In light of this, we’ve put together a list of some of the ways AI could increase HR efficiency in 2026 when it comes to crafting a competitive employee benefits strategy.
Automation of Routine Tasks
One of the most significant barriers HR teams will face in 2026 is the lack of time and capacity to handle repetitive tasks.
When it comes to managing employee benefits, AI and Robotic Process Automation (RPA) tools are able to handle those time-consuming tasks, so your team don’t have to.
From enrollment processing and eligibility checks to data entry and payroll integrations, AI streamlines these processes, freeing up time for your HR team to focus on personalising their communication with each and every employee.
Instant Employee Support
One of the main pain points impacting the success of your employee benefits system could be a lack of communication between your HR team and your employees.
Luckily, AI-powered chatbots and virtual assistants provide 24/7 support to employees, which is especially helpful if your team often find itself answering questions about coverage details, claims procedures, and leave balances.
In fact, 66% of HR professionals claim that employees feel more comfortable receiving info about their ebenfits policy from a chatbot or virtual assistant.
Personalised Recommendations
Personalised benefits packages are crucial in a competitive job market. Employees want to enjoy a benefits package that suits their working style and addresses their personal needs.
AI is key here as it can analyse vast amounts of employee data in seconds. From employee demographics to claims histories, AI tools and specialised HR platforms can suggest the most relevant employee benefits options for each employee’s career stage, allowing employees to choose from a customised list.
From health and well-being benefits to salary sacrifice schemes, putting the power in your employees’ hands is a great way to increase engagement with your benefits program.
Cutting Hidden Costs
If you’re a business with long-standing benefits policies in place or a company employing workers from across the globe, you may be unknowingly overlapping policies or paying out for more vendors than you need.
Implementing an AI-powered benefits system gives your HR team a structured, transparent view of all policies.
Instead of keeping policies separate, AI can stay on top of your retirement schemes, leave entitlements, and vendor agreements, all while displaying everything in one place.
Here, your team can identify any policy duplications and consolidate your offerings to improve cost savings moving forward.
Wrapping Up
Crafting a powerful employee benefits scheme could be the difference between maintaining high retention and dealing with constant staff turnover.
Employees want to feel valued in the workplace, so it’s essential to personalise your benefits package to suit their individual needs.
Instructing AI is a game-changer for managing your employee benefits system. With the ability to automate repetitive tasks, remove administrative burden, and even save your company money on overlapping policies, this technology is a no-brainer.