Press release 17 February 2026.
Increased costs, including staffing and utility bills, are expected to be the most significant challenge facing businesses over the next 12 months, according to 45% of HR decision makers surveyed by GRiD, the industry body for the group risk sector. The impact is even greater for micro businesses, where 60% report increased costs as their main challenge.
General challenges associated with running a business, such as maintaining profitability and proposition development, is the next biggest concern for HR decision makers at UK businesses, with 37% citing this as a concern. This is followed by keeping up with new technology and skills, cited by 34%.
Katharine Moxham, spokesperson for GRiD, said: “At the heart of many of the challenges that lie ahead for employers is the responsibility they feel towards their people, from ensuring compliance with employment legislation to managing the increased costs associated with supporting and protecting staff.”
The extent of concern is clear, far ahead of many of the other traditional challenges, such as recruiting and retaining staff, at 31% and 26% respectively.
| Challenge | % of HR decision-makers citing this reason | |
| 1 | Increased costs of running a business, such as staff costs and utility bills | 45 |
| 2 | General issues of running a business, e.g. being profitable, proposition development, etc | 37 |
| 3 | Keeping up with new technology and skills | 34 |
| 4 | Keeping up with new legislation / employment law | 34 |
| 5 | Recruiting / attracting talent | 31 |
| 6 | Retaining staff | 26 |
| 7 | Managing a hybrid workforce | 24 |
| 8 | Managing staff | 24 |
| 9 | We are still struggling with the increased employer NI contributions introduced last year | 20 |
| 10 | Changes to Statutory Sick Pay due to come into effect from April 2026 | 18 |
Katharine Moxham continued: “Organisations must remain cognisant of the full cost of employment, extending beyond salaries to include the broader investment required to support their workforce. In addition, that cost must deliver value for money, ultimately in profitability for the company via a supported workforce that’s present, engaged and productive.”
With increasing cost pressures in other areas GRiD believes it is vital that businesses derive clear value from their benefits provision, particularly in relation to health and wellbeing, including group risk benefits (employer-sponsored life assurance, income protection and critical illness). This needs to include ensuring that benefits support employees effectively and help prevent illness and injury. It also needs to include a focus on proactive health and wellbeing interventions as well as facilitate successful returns to work, in line with the government agenda.
In addition to offering the right support, it is about ensuring that support is clearly understood and appropriately utilised. With a growing focus on cost control, HR functions will need to demonstrate measurable impact and return on investment. This expectation is not limited to large organisations, as businesses of all sizes will increasingly be required to adopt the same practices.
- Employer research was undertaken by Opinium from 5-19 January 2026 amongst 500 HR decision makers
For further information please contact:
Ali Cort
SMUK Marketing and PR
Mob: 07887 484247
acort@smuk.org.uk
Katharine Moxham
Spokesperson for GRiD
Mob: 07887 512508
Katharine.moxham@grouprisk.org.uk
Notes for editors
About GRiD
Group Risk Development (GRiD) is the industry body for the group risk sector, promoting the value to UK businesses of providing financial protection for their staff, enhancing their well-being and improving employee engagement. Our membership includes insurers, reinsurers, intermediaries and those operating in (or with other interests in) the UK group risk market. Together this forms a collective wealth of experience built over many years. Under the chairmanship of Colin Fitzgerald (Distribution Director – Group Protection, L&G Retail) GRiD aims to promote group risk through a collective voice to Government, policymakers, stakeholders and employers.
GRiD works with government departments and regulators involved in legislation and regulation affecting group risk benefits, and with other organisations involved in the benefits and financial protection arenas. GRiD also seeks to enhance the industry’s standing by encouraging best practice and by participating in industry-wide initiatives such as the professional qualification in group risk developed jointly with the Chartered Insurance Institute.
GRiD’s media activity aims to generate a wider awareness and understanding of group risk products and their benefits for employers and employees.
GRiD’s dedicated spokesperson, Katharine Moxham, provides expert media comment on a full range of group risk issues.