Small business owners and their employees can both experience the advantages of work benefits, it has been suggested.

Peter Reilly, the director of HR research and consultancy at the Institute for Employment Studies, noted that a flexible choice of benefits can make firms attractive to people with families - who may be keen on health insurance - as well as young people who may want more holiday, for example.

Meanwhile, employers can save money on National Insurance and be more tax-efficient as a result of such benefits, said Mr Reilly.

"If you're going for flexible benefits, you're offering your employees a range of things in order that they can choose them to fit their particular circumstances," he remarked.

The employment expert added: "It's about understanding what your workforce is like - age-wise, gender-wise, income-wise - and tailoring your offer to meet [that]".

Jonathan French from the Association of British Insurers pointed out earlier this month that one advantage of investing in medical insurance is the possibility of ill staff returning to work quicker - something that has obvious benefits for small firms.

"It's an important thing for them from a productivity point of view and that, of course, has knock-on benefits to the overall productivity of the economy," Mr French concluded.

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