Research by HR, payroll and benefits software provider Ciphr has found paid sick leave continues to top the list of benefits and incentives that matter most to employees.
A poll of 2,000 UK employees found that over two-thirds (68 per cent) 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 per cent 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 per cent and 58 per cent 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 per cent and 50 per cent 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 per cent of survey respondents)
- Annual pay rises that match or exceed the UK’s inflation rate (60 per cent)
- Flexible working hours (58 per cent)
- Pension contribution matching (54 per cent)
- Extra holiday allowance (50 per cent)
- Upskilling (48 per cent)
- Employee discounts scheme (46 per cent)
- Paid overtime (42 per cent)
- Hybrid working (41 per cent)
- Personalised employee development (37 per cent)
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 per cent), while those looking to work remotely (at home or abroad) may value the option to ‘work from anywhere’ (26 per cent). And others may want private health insurance (37 per cent), a salary sacrifice pension scheme (31 per cent), a four-day work week (28 per cent), discounted gym membership (26 per cent), paid carer’s leave (17 per cent), or pet-related benefits (12 per cent).
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 per cent vs 52 per cent and 48 per cent).
In comparison, employees further from retirement (people under 45) are more likely to value having flexibility over the hours they work (64 per cent) or upskilling (57 per cent) than pension contribution matching (50 per cent). 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.
What employees value vs what’s on offer
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 per cent of surveyed employers provide this), flexible working hours (59 per cent), employee discounts scheme (59 per cent), hybrid working (57 per cent), paid sick leave (56 per cent), personalised employee development (52 per cent), and pension contribution matching (52 per cent).
A further two in five employers say they provide paid overtime (46 per cent), extra holiday allowance (38 per cent), and annual pay rises that match or exceed inflation (38 per cent).
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 per cent of employees rate this as important, but just 38 per cent 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 per cent) or extra holiday allowance (50 per cent) and the share of organisations that offer these benefits (56 per cent and 38 per cent 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 per cent) 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,” concludes Lough. “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.”
