What Do Employees Actually Want from Their Benefits in 2026?

Questco's 2026 SMB Employee Benefits and Retention Survey showed that employees ranked flexible work and health insurance as their two most important benefits. Health insurance is also the benefit they're least satisfied with, generating the largest gap between importance and how well it meets their needs. It also showed that while employers know what's on their menu, they do not know how employees feel about their package.

The assumption most employers carry into benefits conversations is that knowing the categories is enough. Health insurance? Check. 401(k)? Check. PTO? Check. All the boxes are ticked.

What our 2026 survey of 101 employers and employees found is that employees aren't evaluating benefits at category level. They're evaluating them the same way you evaluate a product you're purchasing online. They distinguish between a 401(k) and a 401(k) match. Between offering mental health resources and actually knowing those resources exist. Between unlimited PTO as a policy and unlimited PTO being normalized in a culture that lets people use it earnestly.

For a lot of employers right now, the gap between what they're providing and what employees experience is wider than they think.

Is flexibility still a workplace perk in 2026?

Remote and hybrid work landed at 4.42 out of 5 in employee importance ratings, the highest of any benefit in the survey. Flexible scheduling came in at 4.33, second highest. Together, they outranked health insurance, 401(k) matching, and PTO.

Employers ranked flexible work options fifth in their assumptions about what employees value most. That's quite a big miss.

For a workforce that's predominantly remote or hybrid, flexibility doesn't serve as a differentiator as it might have in 2019. Restricting it now might register as a breach, rather than a negotiation.

Why is health insurance both the most important and most disappointing benefit?

The single largest value-versus-satisfaction gap in the survey belongs to health insurance. Employees rated it 4.23 in importance and 3.50 in how well it meets their needs. No other benefit had a wider spread.

When asked which benefit they'd most hate to lose, 58% of employees named health insurance. When asked what single change would most increase their likelihood to stay, 36% said better medical coverage.

Employers generally know health insurance matters. Most don't know, however, that their plan is underdelivering, which is a version of the same problem. They know the category is filled but not what the experience looks like from the inside.

The reasons employees are disappointed aren't mysterious. For small and mid-sized businesses negotiating independently with carriers, the plan options available to a 30-person company are genuinely different from what's available to a 3,000-person company. Questco's group purchasing model—pooling thousands of employees across client companies—changes that negotiation. One Questco client reduced their medical premiums by more than 50%.

Do employees understand the difference between a retirement plan and a match?

Nearly every employee respondent (99%) has access to a 401(k). That number looks good until you look at what sits next to it.

Employees rated the 401(k) match (4.25) higher in importance than the plan itself (4.14).

26% of employees rated their understanding of vesting and match rules at 3 out of 5 or lower.

A quarter of your employees may not know how their retirement benefit actually works.

That second problem is separate from plan design. You can have a competitive match structure and still lose the retention value of it if employees don't understand when they're vested, what the match rate means, or how to contribute to capture the full amount. The money is there. The communication is missing.

Why aren't employees using unlimited PTO?

80% of employees say their PTO expectations are clear. That sounds healthy, until you look at utilization.

Among employees with unlimited PTO, the most common number of days actually taken was 10. Four respondents took zero.

The barrier is the culture built around it. When employees say they're not taking time off because of workload pressure or "fear of optics," the PTO policy is doing nothing because employees don't believe they can use it without consequences.

Employers who offer unlimited PTO without explicitly modeling and reinforcing time off from the top are providing a benefit on paper that doesn't exist in practice.

Why is childcare support an underestimated retention tool?

Childcare support had an average importance rating of 2.73, which sounds low, until you understand why.

Most survey respondents don't currently have young children. The number reflects population, not priority.

Here's what tells the real story:

• Childcare support was the #1 most-requested missing benefit in the entire survey.
• It was the second most common single change employees said would increase their likelihood to stay.
• The vast majority of employers in the survey don't offer it.

That combination—high demand among a motivated segment, almost no competition in the employer market—makes childcare support one of the highest-leverage benefits an SMB could add. The employers who figure this out early are being strategic.

Why aren't employees using mental health benefits?

70% of employers in the survey say they offer EAP or mental health resources. 81% of employees haven't used them.

That gap has two causes:

• 18% of employees say mental health resources aren't offered at their company even though their employer says they are.
• 22% of employees rated their comfort discussing mental health needs with their manager at 1 out of 5. That was the single most common response to that question.

Adding more EAP resources won't fix either problem. The first is a communication failure: employees don't know what's available. The second is a culture failure: employees don't feel safe asking for it. Both require active management attention.

How is the benefits communication gap costing employers?

Some of the most actionable numbers in the survey aren't about which benefits employees value. They're about what employers are doing wrong with the benefits they already have.

• 86% of employers don't publish a benefits summary.
• 68% have no system for measuring whether employees understand what they have.
• 33% of employees have been surprised by a benefits change at some point.
• 12% found out about a change after it had already happened.

Employees who find out their health plan changed by looking at their paycheck are not employees who feel like their employer is being transparent with them.

Do benefits drive employee retention?

Benefits ranked third among the factors employees said most drive their decision to stay. Base pay came first, at 52%. Manager quality came second, at 27%. Benefits came third, at 15%.

That context changes how employers should think about investment:

• Benefits work best when compensation is already competitive.
• Benefits work best when the management layer above them is functioning well.
• Benefits used as a substitute for competitive pay or poor management solve the wrong problem.

When the foundation is solid, benefits become a meaningful differentiator. When it isn't, a better dental plan doesn't move the needle.

What should employers do with this benefits data?

The survey isn't an argument for adding more benefits but rather for listening and surveying your employees more frequently (and enabling them to answer honestly).

Specific areas where action is straightforward:

• Audit your health insurance plan against employee satisfaction, not just cost. The most expensive communication failure in this survey is employers who don't know their medical coverage is underdelivering.
• Communicate what you have. A benefits summary published somewhere employees can find it is not a major project. 86% of employers haven't done it.
• Measure whether employees understand their retirement benefit, especially the match structure and vesting schedule.
• If you have unlimited PTO, model its use from leadership. Culture overrides policy every time.
• Ask about childcare before your competitors do. The employer who offers it in your market right now has almost no competition for that segment of employees.
• Train managers to create conditions where mental health conversations are possible. Resources no one knows about or is comfortable accessing are not a benefit.

Questco's 2026 SMB Employee Benefits and Retention Survey asked employers and employees the same questions about workplace benefits, then compared the answers.

Download the full report to see where the gaps are and what they cost. 

Frequently Asked Questions

What benefits do employees value most in 2026?

Remote and hybrid work options (4.42 out of 5) and flexible scheduling (4.33) are the highest-rated benefits overall. Health insurance is the most important traditional benefit and also the one with the largest gap between importance and employee satisfaction.

Does offering better benefits improve employee retention?

Benefits are a retention reinforcer, not a retention driver. In Questco's 2026 survey, 52% of employees ranked base pay as their top reason to stay, 27% named manager quality, and 15% named benefits. A competitive benefits package keeps good employees from leaving. It doesn't replace competitive compensation or strong management.

Why aren't employees using unlimited PTO?

Among survey respondents with unlimited PTO, the most common number of days taken was 10, and four respondents took zero. Employees consistently cited workload pressure and concern about optics, not confusion about the policy. Unlimited PTO requires active cultural reinforcement from leadership to translate into actual time off.

What benefits are employees most likely to request that employers aren't currently offering?

Childcare support was the most commonly requested missing benefit in the survey, followed by mental health improvements, tuition reimbursement, and stronger medical coverage. Childcare support is particularly notable: its average importance score looks low because most respondents don't have young children, but among those who do, it's a significant retention factor with almost no employer competition.

Why don't employees use mental health benefits?

Two separate issues: 18% of employees don't know their mental health resources exist, and 22% aren't comfortable discussing mental health needs with their manager. The first problem is fixed by communication. The second is a culture problem that requires manager training and leadership modeling, not a benefits redesign.

What is the biggest mistake employers make with employee benefits?

Evaluating benefits at category level rather than product level. Employers who know they offer health insurance, a 401(k), and PTO often don't know that their health plan is underdelivering, that 26% of employees don't understand their vesting schedule, or that their unlimited PTO is going mostly unused because no one believes it's safe to take.