Two-thirds of employees say paid sick leave is a must-have

A poll of 2,000 UK employees found that over two-thirds (68%) think company sick pay is the most important employee benefit to have – ranking it above all other benefits, incentives and rewards. 

This is an almost identical result to a similar survey Ciphr ran four years ago, when 67% of 1,000 employees said sick pay was the benefit they valued most.  

After paid sick leave, the other most in-demand work incentives in 2026 include annual pay rises that match or exceed inflation – perhaps unsurprising after years of higher living costs – and flexible working hours (selected by 60% and 58% of surveyed employees respectively). 

Pension contribution matching and having extra holiday allowance, on top of statutory minimum holiday entitlement and bank holidays, are also seen as valuable rewards by around half of employees (54% and 50% respectively). 

The rest of the top 10 features an equally balanced mix of financial and non-financial incentives – highlighting that while being paid (as a salary or into a pension, for example) is a key motivator to why people work, it’s not all-important. 

Many of the benefits and incentives that employees prize most highly are those that support their health, wellbeing and work-life balance, and invest in their skills and future career development. 

The 10 most important benefits and incentives, according to employees, are:

• Paid sick leave (68% of survey respondents)

• Annual pay rises that match or exceed the UK’s inflation rate (60%)

• Flexible working hours (58%)

• Pension contribution matching (54%)

• Extra holiday allowance (50%)

• Upskilling (48%)

• Employee discounts scheme (46%)

• Paid overtime (42%)

• Hybrid working (41%)

• Personalised employee development (37%)

 

Of course, the top 10 for an employee at the beginning of their career is likely to differ from the top 10 of someone with decades of working experience. Different personal circumstances will also affect the priority or importance that people give to certain benefits, rewards and incentives.  

Workers looking to build their professional qualifications may value paid study leave (34%), while those looking to work remotely (at home or abroad) may value the option to ‘work from anywhere’ (26%). And others may want private health insurance (37%), a salary sacrifice pension scheme (31%), a four-day work week (28%), discounted gym membership (26%), paid carer’s leave (17%), or pet-related benefits (12%).  

For workers over 45 years old, for example, getting their pension contributions matched (to help them build a bigger pension pot faster) is comparatively more important (according to Ciphr’s findings) than being able to work flexible hours or take extra holiday (58% vs 52% and 48%).  

In comparison, employees further from retirement (people under 45) are more likely to value having flexibility over the hours they work (64%) or upskilling (57%) than pension contribution matching (50%). Although, it’s worth noting that maximising pension contributions early in one’s career could result in a significantly larger pension pot over time thanks to compound interest growth.  

Flexible working hours is the most popular benefit (ranked equal to sick pay) for 35- to 44-year-olds, who are among the most likely to be balancing work demands and caring responsibilities.  

Survey respondents were quizzed about 48 different benefits, rewards and incentives. For the full list and results, please see: www.ciphr.com/infographics/survey-infographic-the-benefits-incentives-employees-value-most. 

Many organisations see benefits as a core part of their recruitment, retention, and recognition strategies. So much so, that HR leaders named “providing a good range of employee benefits” one of their biggest HR priorities of 2026.  

But what does that look like in practice, and how closely are employers tuned in to the types of benefits and rewards that their staff rate as important? To find out, Ciphr compared its latest findings with those from a separate survey, which asked 300 HR decision makers about their organisations’ benefits packages. 

The good news for employees is that, generally, many of the benefits they want the most are being provided by thousands of UK employers. And many employers are offering a broad range of personalised incentives, such as healthcare, mental health and wellbeing support, financial wellbeing, training and flexible working, to help ensure that their employees remain healthy and happy; and drive operational resilience. 

Ciphr’s analysis revealed that over half of UK employers offer seven of the 10 most-desired work incentives. This includes upskilling (62% of surveyed employers provide this), flexible working hours (59%), employee discounts scheme (59%), hybrid working (57%), paid sick leave (56%), personalised employee development (52%), and pension contribution matching (52%). 

A further two in five employers say they provide paid overtime (46%), extra holiday allowance (38%), and annual pay rises that match or exceed inflation (38%). 

While employers’ views on the benefits and incentives that are most important to their workforces (ie what they offer them) tends to align with the incentives that employees say they value most, there are a few disparities. The widest gap is around inflation-matching pay rises – 60% of employees rate this as important, but just 38% of employers offer this (a 22 percentage point difference). 

There’s also a 12 percentage point difference between the share of employees who want paid sick leave (68%) or extra holiday allowance (50%) and the share of organisations that offer these benefits (56% and 38% respectively).

Karen Lough, director of people at Ciphr, says: “With employer National Insurance (NI) contributions rising and wage bills under sustained pressure, it's understandable that companies are scrutinising every line of their reward and benefits spend. But this research highlights a real risk in employers cutting back or standing still. It also shows that employees have clear priorities – paid sick leave, pay rises that keep pace with inflation, pension matching, and flexible working – and in several areas there are significant gaps between what they expect and what employers tell us they currently provide.

“Take paid sick leave for example – the top-ranking benefit chosen by employees. Only half (56%) of employers offer company or contractual sick pay. This creates a situation where many employees may force themselves to work when they may not be well enough to do so, because they can’t afford to live on SSP (Statutory Sick Pay). While the latest SSP reforms are welcome and will make sick pay more accessible to lower earners and part-time earners, the changes won't fully bridge the gap for employees without company sick pay. That has consequences for productivity and long-term absence that employers often underestimate.

“A strong, clearly communicated benefits package builds trust, helps reduce absenteeism, burnout and attrition, and strengthens your employer brand. Getting it wrong, or simply doing nothing, carries its own cost, one that tends to show up quickly in increased recruitment spend and lower engagement and performance scores.”

Lough recommends employers take a data-led approach and spend time listening to their employees to understand their needs and priorities, and what benefits they want and value. 

“Giving your people greater autonomy to choose the benefits they genuinely want helps make them feel valued and more motivated. But it’s important to be led by the data – use feedback from existing employees, and recent leavers, to understand what you’re doing right and what needs to improve. Interrogate your benefits uptake data – are your employees aware of what benefits they may already have access to? And benchmark to identify where to focus your investment for maximum impact.

“It won’t always be possible or financially viable to deliver on every specific benefits request. But organisations that can act on employee feedback, wherever possible, and provide agile and flexible benefits schemes are more likely to have a more resilient and high-performing workforce.”

Phil Curtis, MD of flexible employee benefits platform FlexGenius (part of the Ciphr Group), adds: “It is becoming ever-more important for employers to respond to the changing needs of employees as they progress through their working lives. A workforce that spans different generations, life stages and working patterns no longer responds to a single, fixed benefits package. 

“What supports a graduate in their first job is rarely what supports a parent on phased return, or a senior leader thinking about long-term financial protection. 
 
"A personalised employee benefits platform, like FlexGenius, is what makes flexible benefits work in practice. They give HR and reward teams the structure to design a thoughtful package, the tools to communicate it so people actually use what's on offer, and employees genuine choice across their health, financial and lifestyle priorities. That is where we see significant improvement in the physical, mental and financial wellbeing of employees, and it shows up in retention, attraction and engagement. 

“Employees want to feel fairly rewarded for the value they bring to an organisation, and offering relevant, personalised benefits is an essential part of that.” 

Ciphr’s new employee benefits research is available at https://www.ciphr.com/infographics/survey-infographic-the-benefits-incentives-employees-value-most.

Ciphr is the go-to HR, payroll and benefits software partner for UK organisations with 200 to 2,000 employees. Its integrated HR, payroll, benefits, learning and recruitment software, services and content provide invaluable insights to HR teams to help inform their people strategy and grow and develop their organisations. Ciphr is on a mission to amplify the voice and value of HR through intelligent people data solutions that help HR be heard – in the boardroom and across the business. 

For more information, please visit www.ciphr.com. 

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Media enquiries:

Emma-Louise Jones, digital PR manager at Ciphr
e:  ejones@ciphr.com  

Chris Boddice, chief marketing officer at Ciphr
e: cboddice@ciphr.com
Website: www.ciphr.com
LinkedIn: www.linkedin.com/company/ciphr 

Notes:

This research compares the findings of two surveys commissioned by Ciphr and conducted by OnePoll. The survey of 2,000 UK employees ran in February 2026. The survey of 300 HR decision makers (employed at UK organisations) ran in July 2025. Both surveys included similar questions on the topic of employee benefits and incentives. These results have not been previously released and can be viewed in full at https://www.ciphr.com/infographics/survey-infographic-the-benefits-incentives-employees-value-most 

Chart showing the top 20 most important
benefits and incentives, according to employees: https://www.datawrapper.de/_/RF48H/

About Ciphr

Ciphr is the go-to HR, payroll and benefits software partner for UK organisations with 200 to 2,000 employees. Its integrated HR, payroll, benefits, learning and recruitment software, services and content provide invaluable insights to HR teams to help inform their people strategy and grow and develop their organisations. Ciphr is on a mission to amplify the voice and value of HR through intelligent people data solutions that help HR be heard – in the boardroom and across the business. 

The Ciphr Group is a privately held company backed by ECI Partners and headquartered in Reading. Over 230 employees work across the group, which includes Ciphr and Avantus (FlexGenius), as well as its previous acquisition Marshall E-Learning (now known as Ciphr eLearning). 

Ciphr spokespeople are available to provide expert media comment on a broad range of topics, including HR strategy, people management, employee experience and wellbeing, AI in HR, payroll, benefits and rewards, diversity, equity, and inclusion (DE&I), learning and development, the future of work, tech trends, business and leadership, marketing, and more.