The utilisation ‘black hole’
Even the best-intentioned strategies can stumble at the final hurdle: whether employees use the benefits on offer. Our data shows that many SMEs are falling into a utilisation ‘black hole,’ where benefits exist in theory but fail to translate into real impact. This doesn’t just lead to financial waste – by failing to track, communicate, and normalise access to benefits, organisations risk leaving gaps that competitors can exploit.
Benefits are flying under the radar
Despite a growing emphasis on wellbeing, many SMEs still struggle to turn good intentions into tangible outcomes. According to the results of our survey, leaders typically assume their benefits are well used. However, a considerable 39% admit that some benefits go ignored – and over a third cite low awareness as the main reason. A perceived lack of relevance, and the feeling that certain benefits are designed for someone else – such as parents or older staff – also discourage employees from making use of what’s on offer. Once again, this reflects the overbearing influence of personal values and experience on leaders’ decision-making.
Even more worryingly, nearly a quarter of leaders (24%) fail to track benefits usage at all, missing the chance to learn what’s working and where to improve. If leaders lose sight of what employees value, it becomes harder to adapt offerings or justify spend. In a competitive talent market, this can erode employer reputation and leave organisations vulnerable to rivals who better align benefits with employee needs.
Benefits, what benefits?
Barriers to benefits utilisation, according to leaders (top 3)
Lack of awareness
They feel benefits are intended for other types of employees
Complexity of access
Poor communication
They’re not relevant
Stigma, guilt or embarrassment
I don’t know
To ensure benefits achieve their intended purpose, it’s crucial for SMEs to engage with their employees around what’s available. But doing this effectively requires more than different communication platforms – choice of wording, timing, and positioning can all impact success. There’s no such thing as a one-size-fits-all solution – but fortunately, SMEs are uniquely placed to tailor and communicate their offering.
Katherine Gunningham, Specialty Services: Communication Lead
Communication failures
But poor take-up isn’t just a fault of strategy – it also reflects failings in how benefits are communicated. Most SMEs rely on a mix of digital tools and company-wide channels to educate and inform employees about their benefits. Yet, fewer rely on personal interactions, such as line manager conversations. This is an oversight. Work at SMEs is often fast paced, with key operational and business tasks taking precedent over activities deemed ‘non-essential’. Add to this a frequent lack of HR support, and benefits are liable to fade into the background.
This utilisation ‘black hole’ is far from trivial. SME decision-makers invest significant resources into their benefit packages – but unless there is significant buy-in among employees, benefits will deliver little return on investment. What’s more, packages that fail to connect with employees can also mask underlying dissatisfaction, and give employers a distorted understanding of their perceived generosity.
Not for discussion
How SMEs are communicating their benefits (max 3)
Company meetings
Regular emails or using internal collaboration tools, such as chat functions
Annual reviews
Onboarding packs
Line manager conversations
External provider platform/chat tools
We don’t really promote them
Whether down to bad design or ineffective communication, the consequences of poor benefits decisions rarely fall evenly across the workforce. When uptake is low, or packages are shaped without considering the needs of different groups, some employees feel the gap far more than others.
As our findings reveal, employees on lower incomes are the most likely to miss out on benefits, including vital financial support. Employees with disabilities, women, ethnic minority groups, and others, can all find themselves excluded by design or by omission. Over time, these blind spots don’t just limit financial return – they can deepen existing inequalities, weaken trust, and send a signal, however unintended, about who is truly valued.
To close the utilisation gap, SMEs must recognise and address these disparities, as well as the faults in their own communication strategies. Benefits need to be visible, relevant, and easily accessed. To achieve this, leaders must take practical steps to adapt their communication methods, remove barriers, and tackle stigma head-on by normalising the use of benefits. By ensuring that employees know and understand their options, they cease to be a missed opportunity. Instead, they can become a powerful driver of equity, engagement, and retention.
Benefits without benefit
Groups in need of better support, according to leaders (top 3)