Retail employers are cutting back on benefits to reduce costs before the minimum wage increase next week.
An analysis of job advertisements by recruitment platform Adzuna revealed that some employers were cutting back on benefits by up to 60%.
The study found that common benefits like flexible working, enhanced retirements, eyecare and private healthcare are on the decline. The report found that flexible working was down by 59%. It also revealed that enhanced pensions were down by 42%. Eyecare, private healthcare, dental care, and dental insurance are all down.
The company tracked the number of ads that promoted different benefits in the past year, analysing 72,193 ads for retail jobs in February 2025 and February 2024.
In October 2024 , Rachel Reeves‘s first budget as chancellor announced a 6.7% rise in the national minimum wage.
Retailers are expected to be particularly affected by the increase of employers’ national insurance contribution to 15% that also comes into effect on 6 April.
Adzuna discovered that employee discounts will be the most sought-after retail perk in February 2025. Over 16,000 job advertisements offered employee discounts. This is down 45% from the previous year and 34% when compared with five months earlier.
The next most popular benefit was employee assistance programmes (13 518 jobs), followed closely by gym memberships (9 781 jobs).
The Cycle to Work scheme remained popular, but it has declined by 37% in the time since the announcement of a national minimum wage.
Even though some benefits have been removed or offered less often, the enhanced maternity leave and paternity leaves increased by nearly a quarter (23%)
Retail employers are now offering their employees a day off on their birthday. This is up 7%. Adoption leave increased by 2%.
Andrew Hunter, Adzuna’s co-founder, stated that it was evident retail employers “tightened their purse strings”.
He added that the UK’s slowing economic growth and lower consumer spending have compounded the challenges.
In response to increasing salary costs, retailers are cutting back on benefits, but these often play a crucial role in attracting talent and retaining them, creating a Catch-22.
To remain competitive, employers need to find a way to balance rising talent costs with a labour shortage. Or they can explore new ways of attracting talent.
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