Rising costs are making things increasingly difficult for all of us, but innovative solutions can help ease the burden for both businesses and employees.
For businesses, employer national insurance rates have risen alongside the national living wage. For employees, the pressure comes from ongoing food price inflation and steep utility bills. For HR teams, the combination creates a double headache: tighter financial restraints at a time when little else seems to be going well.
This is especially true in employee benefits, where providers are more focused on consolidation than innovation. Instead of offering flexible solutions that support both HR and employees, many organisations still rely on one-size-fits-all systems that don’t reflect increasing workforce diversity or meet the growing demand for stronger ROI. In today’s climate, innovation and adaptability are essential.
Some organisations are showing that a shift towards more imaginative solutions is possible. These employers are adopting approaches that deliver far greater personalisation as well as substantial savings.
Salary sacrifice – the smart solution
Salary sacrifice, at its core, allows an employee to exchange part of their salary for something extra, such as additional annual leave, higher pension contributions or other valuable benefits. For employers, the advantage comes from reducing the NIC base. Instead of spending more cash, the overall reward package can be reshaped to work more efficiently. When well communicated, it can also benefit staff, provided they see meaningful value in the benefit without any impact on take-home pay. This can lift engagement, strengthen retention and enhance the perceived value of the total reward package. It also signals that the business understands the financial pressures employees face and is taking a practical step to help ease that burden.
However, there is an important caveat. Salary sacrifice can be a powerful tool, but only when implemented smartly and intuitively. A generic catalogue of benefits is no longer enough. What is required is a high degree of personalisation that makes each option directly relevant. Only a platform capable of matching individual employees with the benefits they genuinely need has a realistic chance of delivering a successful package.
The system must be able to filter eligibility dynamically, presenting only benefits employees can use, based on their salary, age, length of service, location and team. In other words, it needs to remove the noise and present meaningful options at the right moment.
So, what can I save?
It’s a good question, and one we at Each Person have been working on in collaboration with one of the UK’s leading tax-advisory firms.
Here is one scenario: a firm with 1,500 employees achieves a 10% take-up rate in Cycle2Work and electric vehicle salary sacrifice schemes. The result is £112,500 in NIC savings and a further £22,500 in reduced employer pension contributions. The combined saving of £135,000 is a clear, measurable return at a time when HR budgets are under heavy pressure.
There are, of course, key considerations. Compliance is essential, and staff must understand the arrangements. With these in place, salary sacrifice can turn cost pressures into an opportunity.
The choice for employers is not between being passive or being overly generous; it is about being smart. When executed well and supported by the right partner, salary sacrifice delivers measurable savings, improves engagement, reduces admin and ensures full compliance.
That partner, naturally, is Each Person. Our track record demonstrates consistent innovation and the ability to build effective reward strategies at pace for major organisations across multiple sectors.