For decades, industries like retail, hospitality, and healthcare have operated under a shared assumption: employee benefits are a luxury reserved for high-margin sectors. But that assumption is now being dismantled. The pandemic, shifting workforce expectations, and competitive talent pressures are forcing a reckoning. I believe that it is time for industries with lower-paid employees to start considering offering high-quality employee benefits schemes to secure their and their people’s futures. 

A sector-wide wake-up call

Last month, I was invited to present to the board of directors for one of the world’s biggest grocery chains – an employer with almost half a million employees. My remit was to try and convince them that employee benefits are an inevitable future for retail. Whether or not I convinced them is still up in the air, but I did manage to convince myself that low-paid industries need to wake up to the role employee benefits will play in their future. 

Retail, hospitality, and healthcare are among the largest private sector employers in both the UK and US. Yet they have historically offered the least in terms of employee benefits. High turnover, thin margins, and operational complexity made benefits investment seem impractical for lower-paid industries. But the landscape has now changed.

These types of employers are featuring far more frequently among employers I work with and who use employee benefit technology. Widening support for employee-funded benefits and technology has removed historical barriers to access, leading far more low-paid and “deskless” workers to engage in employee benefits. 

This is also perhaps because recent data shows that employee benefits can be more effective at reducing turnover than wage increases. In retail, where turnover can reach 130%, this insight is transformative.

We also now know that lower-income employees are looking for support over and above pay. For people working in retail, employee benefits are becoming “table stakes” for almost 60% of retail workers. A massive 83% of hospitality workers say employee benefits contributed to them deciding to switch jobs.

Benefits as a performance lever

I’ve spent much of the last 12 months reviewing and collating research, case studies and data to show the impact of benefit schemes on organisational success. The evidence is now unequivocal: organisations offering comprehensive benefits outperform those that don’t. And for low-paid employees, the organisational impact can be even more pronounced. 

For example, healthcare employer Bupa wanted to provide better benefits to engage and support their care-home workers, while also improving retention and reducing reliance on agency staff. They even credit employee benefits with having a positive impact on staff wellbeing levels, retention and sickness – all contributing to overall business performance over the last three years. 

In retail, global employers like Costco and Mercadona have demonstrated that investing in employee benefits leads to lower turnover and higher productivity. Costco’s turnover rate is just 8% – a staggering 52% lower than the industry average. Meanwhile, Sam’s Club saw a 16% rise in productivity and 25% increase in sales after enhancing its benefits offering. 

This isn’t anecdotal. A longitudinal study of 20 firms found a statistically significant relationship between employee benefit costs and profitability metrics like return on equity and profit after tax. 

Multiple interlocking barriers

Why are employee benefits and wellbeing support in increasing demand among low-income workers? One reason is that these employees often face challenges that limit their ability to thrive at work.

Essential bills “eat away” at the income of low earners. Employees in the lowest 10% for income spend 41% of their earnings (after housing) on utilities alone, driving a greater demand for employee discounts and switching services.

Additionally, low earnings correlate directly with lower health outcomes and higher wellbeing risk. Employees in the bottom 40% of income are twice as likely to report poorer health than those in the top 20%.

Lower-income employees also experience disproportionate challenges with both transport and childcare.

Supporting the life stages, finances and wellbeing of low-income workers is therefore increasingly essential. 

The rise of high-impact benefits architecture

The traditional ROI model for benefits (typically focused on cost containment) is no longer sufficient. What’s emerging is a new framework: high-impact benefits architecture. This approach positions benefits technology as a driver of organisational performance, not just a support function.

According to the Benifex Big Benefits Report, the top goals for benefits programmes are now productivity, business growth, and profitability – all of pronounced importance to the retail and hospitality sectors, which are looking to drive revenue as much as possible. Benefit apps that offer personalisation, decision support, and seamless user experiences are enabling even low-margin sectors to deliver high-quality schemes at scale.

Technology is the enabler

Technology has made it possible to offer benefits to dispersed, shift-based, and frontline workers – groups historically excluded from traditional schemes. Benefit apps allow lower-paid and “deskless” employees advanced personalisation, tailoring benefits to their life stage and individual needs.

Decision assistance is helping employees understand and engage with complex offerings and improve financial literary and resilience. A general high-grade user experience is also reducing friction and increasing uptake. 

A strategic imperative

Industries that have long offered quality benefits are now actively targeting talent from retail, hospitality, and healthcare. The CEDEFOP finds that medium-skilled sectors are actively recruiting workers from low-skilled, low-pay backgrounds, including retail and hospitality. These sectors are vulnerable to talent drain unless they evolve.

The presence of benefits technology is now so strongly associated with high-performing organisations that it can be used as a predictor of growth.

The question is no longer whether low-paid industries can afford to offer benefits. It’s whether they can afford not to. To me, the data is conclusive: benefits drive retention, engagement, productivity, and profitability among lower-paid industries. 

Some of the employers in recent years with large cohorts of low paid workers that are now investing more in benefits for staff include Bupa, Tesco and Gatwick Airport. For these types of employers, this is a moment of opportunity.

By investing in employee benefits, you’re not just improving lives, you’re building a more resilient, competitive, and future-ready organisation.