Salary and benefits strategy: building competitive total compensation packages 

Large organisations will need to consider various factors that affect salary and benefits, especially in multi-national businesses. Different locations will have different legislations; therefore, compensation and benefits packages need to be tailored to satisfy those legislations and remain competitive in the market. 

Salary architecture 

Large organisations typically use structured pay frameworks that account for job level, location, and market benchmarks. These systems help ensure consistency across departments and geographies, while allowing for adjustments based on cost-of-living differences. For example, roles based in London may carry higher base salaries than equivalent positions elsewhere in the UK to reflect regional living costs. For context, there is a significant discrepancy between average salaries across the UK, which is reflective of the cost of living. The Office for National Statistics report that average salary in London in 2025 (£65,994) versus many other regions: West Midlands £41,482; North East £37,900. 

Benefits complexity 

Beyond salary, benefits packages in large organisations often include health insurance, paid leave, and retirement plans. Administering these at scale requires robust systems and clear communication. In the UK, statutory benefits such as paid annual leave (a minimum of 28 days including bank holidays) and pension auto-enrolment are standard, but many employers offer enhanced schemes to remain competitive. In Ireland on the other hand, auto-enrolment is only becoming standard in November 2025. You can learn more about auto-enrolment in Ireland and other compliance challenges on the horizon in the ‘Irish Regulatory Perfect Storm: 2025–2026 Strategic Action Guide’. 

Enterprise-specific perks

Larger employers are more likely to offer additional perks such as life insurance, income protection, and employee assistance programmes (EAPs). Scaled wellness initiatives, like mental health support, subsidised gym memberships, or digital wellbeing platforms, are increasingly common, especially in hybrid or remote-first environments. Our Employee Benefits Impact Report demonstrates that there’s been a shift in the delivery of EAPs, with face-to-face counselling surging to 39% of sessions and online counselling becoming the dominant channel at 58.9%. 

With workforces spread across multiple locations and functions, benefits play a key role in attracting candidates and encouraging long-term retention. A well-designed package can differentiate an employer in a crowded market, especially when salary ranges are similar across competitors. Morgan McKinley UK’s 2025 Salary Guide reveals that 59% of businesses have lost candidates in the past 6 months because their salary and benefits packages were not competitive. 

Benefits that support health, flexibility, and financial security contribute to higher employee satisfaction. In large organisations, even small improvements in engagement can have a measurable impact on productivity across teams. The Drewberry “Employee Benefits & Workplace Satisfaction Survey 2025” found only 12% of UK employees are “very satisfied” with their benefits package and 32% said they would leave for better benefits (even if salary was unchanged). This demonstrates that workers really value the total compensation and benefits package. 

Replacing employees is costly. In large organisations, where headcounts are high, turnover expenses can quickly add up. Offering competitive benefits helps reduce churn and stabilise workforce planning. There’s a generally agreed figure across the UK landscape of around £30,000 to replace an employee. That can accumulate in a large organisation. 

A unified benefits strategy helps reinforce the organisation’s values and identity across different sites and regions. Whether employees are based in Manchester, Glasgow, or working remotely, consistent access to core benefits supports a cohesive culture. This alignment between benefits and organisational values is a key component of building a strong company culture at scale. Our blog explores how large, distributed businesses are embedding culture into their HR strategies, and how you can implement some of the same strategies. 

In large UK organisations, benefits now represent a significant portion of total compensation packages. While exact percentages vary by sector and scheme, data from our Employee Benefits Impact Report show that benefits such as the Bike Scheme can deliver employer savings of over £140 per application, with employee savings reaching up to 42% through tax efficiencies. This shift reflects a growing emphasis on non-salary elements as part of the overall employee value proposition. 

Insights from our report also reveal that schemes like Technology, Car, and Holiday Trading are increasingly used to enhance total reward packages, with sector-specific engagement patterns driving uptake and value. 

UK salary landscape

While salary remains the foundation of compensation, expectations around pay rises have shifted. In 2025, many UK employees anticipate modest increases, with inflationary pressures and sector-specific constraints influencing budgets. Real wage growth has been uneven, with some industries, such as Financial Services and Technology, seeing stronger increases, while others remain flat. 

For large employers, this creates budgetary tension: balancing competitive pay with rising benefit costs and employee expectations. Salary architecture often includes multi-level frameworks adjusted for location, helping organisations manage pay equity across regions. 

The growing role of benefits in total compensation packages 

Benefits are central to how employees perceive value. In sectors like Manufacturing and Public Services, engagement with schemes such as Holiday Trading and Car Salary Sacrifice exceeds 20%, showing strong demand for flexibility and lifestyle support. 

Compared to market averages, large organisations often outperform in benefit uptake due to scale, infrastructure, and tailored communications. For example, face-to-face counselling in EAPs surged from 16% to 39% of sessions, reflecting a shift in employee preferences for in-person support. 

Key findings from our report include: 

• Bike Scheme application values rose 42% year-on-year, with Financial Services averaging £1,388 per application. 
• Technology Scheme engagement was 83% above average in Transportation and 69% in Manufacturing. 
• Holiday Trading saw 15% average engagement, with Manufacturing and Public Sector leading. 

Enterprise-specific market dynamics

Large organisations benchmark compensation using internal equity frameworks and external market data. Regional differences, such as higher London weighting, are built into salary structures, while benefits are scaled to ensure consistency across sites. 

Sector-specific dynamics also play a role. For example: 

• Public Sector leads Car Scheme engagement at 30%, nearly four times the average.  
• Wholesale saw a 127% increase in Bike Scheme application values. 
• Utilities led in Holiday Trading value growth, up 43% vs average. 

Organisations increasingly rely on Total Reward Statements, scheme analytics, and HR platforms to track benefit usage and ROI. These tools help ensure pay equity, support retention, and reinforce employer brand consistency. Catherine Bennett discussed the benefits of Total Reward Statements in Episode 7: Invest in your greatest asset – your people of our Do the Best Work of Your Life series: 

“One point I’d make about total reward statements is that when you ask someone the value of their package, they often just think about their salary. They forget that the company is investing in much more—creating a full remuneration package that takes a more holistic view. When people consider moving jobs for a slightly higher salary, they may not realise that if no benefits are included, they could actually be worse off. That’s why it’s so important to help employees understand the full value of what they’re getting.” 

Equity frameworks are essential for managing large headcounts. They allow employers to: 

• Compare internal roles across locations 
• Align benefits with employee demographics 
• Monitor engagement trends by sector 

In sectors like Financial Services, where competition for top talent is fierce and wellbeing is increasingly prioritised, benefits such as the Bike Scheme have seen particularly high uptake. With average application values reaching £1,388, this reflects a broader trend towards sustainable and health-focused perks. For a deeper dive, read our blog on how HR teams in finance are adapting their strategies to address burnout and retain talent. 

Benefits can add substantial value to an employee’s overall compensation, but their financial impact is often overlooked. By using tools like Total Reward Statements, employers can help staff see the full picture, combining salary with pensions, healthcare, paid leave, and other perks. 

Here’s how to estimate the value of common benefits: 

• Pension contributions: If an employer contributes 10% of a £50,000 salary, that’s £5,000 annually.
• Private healthcare: Depending on coverage, this can be worth £500–£2,000 per year. For this example, let’s assume £1,200. 
• Paid leave: With 28 days of paid holiday, the equivalent salary value is around £5,385 (based on £50,000 annual salary). 
• Employee discounts: Schemes like supermarket and tech discounts can save employees £1,000–£1,500 annually, depending on usage. Let’s assume £1,500. 

This example shows how benefits can increase the headline salary by more than 25%, at a total of £63,085. 

Perceived vs actual value 

Despite their financial worth, many employees undervalue benefits, especially those that aren’t immediately visible, like pensions or insurance. The Employee Benefits Impact Report found that schemes such as the Bike Scheme and Car Salary Sacrifice deliver significant savings, yet awareness and engagement vary widely across sectors. 

Employers can bridge this gap by:

• Providing personalised Total Reward Statements 
• Using real-world examples to show savings 
• Communicating benefit values during onboarding and performance reviews 

Tax implications

Some benefits are tax-advantaged, meaning they reduce taxable income or offer National Insurance savings. For example: 

• Bike Scheme: Saves employers an average of £142 per application, with employees saving up to 42% through salary sacrifice. 
• Car Scheme: Benefit-in-Kind tax breaks make electric vehicles more affordable for employees. 
• Pension contributions: Made via salary sacrifice, these reduce both income tax and NI contributions. 

These tax efficiencies increase the effective value of benefits, making them a powerful tool for both employee wellbeing and organisational cost management. 

Designing a compensation and benefits strategy for a large organisation involves more than setting pay levels. It requires a structured approach that balances business goals with employee needs, ensuring consistency, fairness, and long-term value. 

What are they key components of a compensation and benefits strategy? 

A robust compensation and benefits strategy typically includes: 

• Base pay frameworks: Structured salary bands that reflect job levels, market benchmarks, and regional cost-of-living differences. 
• Variable pay: Performance-related bonuses, incentives, and recognition schemes. 
• Core benefits: Pension contributions, paid leave, private healthcare, and insurance.
• Flexible benefits: Holiday trading, salary sacrifice schemes, and lifestyle perks. 
• Non-financial rewards: Career development opportunities, wellbeing support, and flexible working arrangements. 

Compensation and benefits should directly support business goals. Competitive packages help attract and retain talent, while performance-linked incentives can drive results. Tax-efficient schemes like salary sacrifice reduce costs, and a well-communicated strategy strengthens the employer brand. The communication piece is incredibly important and it’s not being executed as well as it could be across the board; in a 2025 survey by Drewberry Insurance, 56% of employees either had not heard of salary-exchange (salary sacrifice) pensions, and 80% either don’t use them or aren’t sure if they do. 

Communication can come from having benefits in one place, like an employee benefits software, as Catherine Bennett details: 

“Some companies have got lots of benefits, actually, but they’re so spread out all over everywhere that when an employee can’t go on and actually see what’s available to them... pulling that together into one place is a really important point.” 

Episode 7: Invest in your greatest asset – your people of our Do the Best Work of Your Life series

However, large organisations are looking to expand their offering to remain competitive and retain employees. The WTW “2025 Benefit Trends Survey” found that 70% of employers plan to expand benefit choice; 60% will introduce navigation solutions to help employees use benefits; 57% will realign spend across benefits; 52% will switch to better-value vendors. 

Large organisations also need clear policies to guide pay and benefits decisions. Collaboration between HR, finance and leadership ensures alignment, while compliance monitoring keeps the strategy within legal boundaries. Data and employee feedback help refine the approach over time. 

Success can be measured through benefit uptake, retention rates, and recruitment outcomes. Financial metrics like ROI from salary sacrifice schemes show cost-effectiveness. Cultural alignment is also a key indicator

Embedding culture into compensation strategy 

Compensation can signal what an organisation values. For example, offering equal pay for equivalent roles across regions supports fairness, while rewarding collaboration or innovation through team-based bonuses reinforces desired behaviours. 

Transparent pay policies and clear communication around benefits help build trust. Employees are more likely to engage with their compensation when they understand how decisions are made and feel the system is equitable. 

Cultural alignment in large enterprises can look like the examples below: 

• Public Sector: High engagement with Car Schemes reflects environmental values and long-term planning. (Check out our Salary Sacrifice Car Scheme Calculator to discover how much you and your business could save!) 
• Retail and Manufacturing: Strong uptake of Holiday Trading and Discount Schemes aligns with cost-of-living support and flexibility. 
• Financial Services: High-value Bike Scheme applications suggest a culture of wellbeing and sustainability. 

Striving to get more benefits and discounts for your staff can also demonstrate your commitment to their wellbeing. Well supported employees who recognise that their wellbeing is a priority are likely to remain loyal and perform well. Dianne Hoodless, Head of Compensation and Benefits at TFG London discussed the benefits of going further for her employees: 

“I work in retail, so there is no money to throw around onto new benefits... I asked the employees what they would like to see... I reached out to local coffee shops, yoga studios, even will-writing services—and secured discounts at no cost to the business.” 

Episode 7: Invest in your greatest asset – your people of our Do the Best Work of Your Life series

A well-rounded compensation and benefits strategy should reflect the needs of your workforce, support organisational goals, and evolve with changing expectations. 

Start by auditing your current offering. This helps uncover gaps and opportunities for improvement, especially in large organisations where structures and roles are complex. If you're looking to align pay and benefits with broader workforce planning, our guide to operational workforce transformation offers practical insights into how to connect strategy with operational goals. 

Next, consider the full package of benefits. Employees increasingly value non-financial elements such as wellbeing support, flexible working, and lifestyle perks. These can be just as influential in attracting and retaining talent as salary alone. Technology plays a key role in communicating value. Investing in platforms like our Employee Benefits platform and Total Rewards Statements can help employees understand the full scope of their benefits. 

Tailoring benefits to workforce needs is also essential. Engagement levels can significantly vary across industries. Understanding these differences allows you to customise your approach and improve outcomes. In the retail sector, where margins are tight and staff turnover can be high, benefits like gym memberships and EAPs alongside Discount Schemes have become essential tools for supporting employees’ financial wellbeing. These offerings align with the sector’s need for flexibility and cost-of-living support. Learn how leading retailers are using benefits to reduce attrition in our blog. 

To stay on track, develop a clear compensation and benefits strategy roadmap. This should outline your goals, timelines, and how success will be measured. It’s also important to ensure your strategy supports talent acquisition and retention, helping you remain competitive in a tight labour market. 

Finally, make regular review and refinement part of your process. Employee expectations shift over time, and your strategy should adapt accordingly to remain effective and relevant. 

Personalising benefits at scale 

As organisations grow, delivering personalised benefits becomes more complex but also more critical. Digital tools are making this easier to manage. 

Flexible benefits platforms allow employees to choose options that suit their lifestyle, while tailoring by location, role, and demographic ensures relevance across diverse teams. Increasingly, AI-driven personalisation tools are helping HR teams deliver targeted recommendations that boost engagement and satisfaction. 

To explore how digital solutions can support this shift, our guide for digital transformation in operational teams outlines how technology can streamline benefits delivery and personalisation at scale.