Employee benefits benchmarking is essential in helping organizations in all industries attract and retain the most qualified talent in their field. It provides a helpful comparison between their offerings and the prevailing industry standards, giving them a clear idea of where their organization stands and which areas need reconsidering.
Here is a look at the importance of benchmarking and how employee benefits benchmark analysis helps organizations identify opportunities for improvement.
About Employee Benefits Benchmarks
Employee benefits benchmarks encompass a variety of metrics, including health insurance, retirement plans, and other perks deemed important to determine a company’s competitiveness in terms of its benefits offering. This serves as far more than a simple check-in for human resources professionals with the industry at large; it can also drive decisions that improve the organization’s policies and boost its bottom line.
Common Reasons for Unfavorable Benchmarks
When an employee benefits benchmarking report yields unfavorable results, it is often due to an outdated benefits package, a lack of competitive offerings, or poor benefits utilization rates. Here is a closer look at these root causes.
Outdated Benefits Packages
An outdated benefits package is one of the biggest causes of unfavorable benchmarks. Employers should bear in mind that as their workforce evolves over time and the priorities of the predominant generations change, a benefits package that may have been considered attractive in the past could well have lost its value. For example, many younger workers may place a higher value on flexible schedules than traditional retirement savings.
To overcome this, organizations should regularly review and update their benefits package to establish it remains aligned with their workforce’s current expectations and industry trends. Conducting an employee survey is an excellent way to gain insight into the benefits employees are seeking.
Lack of Competitive Offerings
Another common root cause of unfavorable benefits benchmarks is an organization’s lack of competitive offerings compared to industry standards. In short, your offerings may seem less appealing if your competition offers more thorough benefits or a more innovative package.
This can be alleviated by conducting industry research to better understand your competition’s benefits and making a point of exceeding their offerings, such as by introducing special benefits that help you stand out from other employers.
Poor Benefits Utilization Rates
There may be cases where the problem with a company’s benefits offering does not stem from the benefits themselves but relates to how employees use them. A poor benefits utilization rate is generally an indicator that employees are unaware of the benefits available to them or how to take advantage of them.
They may also be aware of the benefits but are uncertain how to use them. Companies can overcome this by improving their communication strategies related to their benefits and making it easier for employees to access them.
In some cases, offering training or assistance can help. If it is not clear why employees are struggling to use their benefits properly, solicit feedback and make changes accordingly.
Once your organization better understands the cause of unfavorable results, it can begin making positive changes. Start with the areas where improvements are likely to have the most significant impact, such as health insurance or work-life balance initiatives, before moving on to less pressing areas.
Communication and Engagement Strategies
After conducting employee benefits benchmark analysis and identifying areas for improvement, effective communication is necessary to establish that employees understand the changes you are making.
Ideally, you will use multiple methods of communication to convey these changes to employees, as some may prefer in-person meetings while others appreciate the ability to access this information via digital platforms.
Engaging employees in the benefits selection process can help them feel empowered while enabling you to provide a benefits package better suited to their needs. Suggestion boxes and focus groups are good ways of collecting employee feedback. This should be supplemented by ongoing education about benefits through regular workshops and one-on-one consultations.
Some employers think this is only necessary when benefits change. Still, it is important to keep in mind that employees’ personal circumstances may change in ways that make benefits they were previously uninterested in more appealing.
Partner With Business Benefits Group Brokerage to Improve Your Employee Benefits Packages
Is your company seeking an edge in an increasingly competitive business environment? At Business Benefits Group, our expertise in employee benefits benchmark analysis enables us to provide customized solutions for your organization to help you stand out from the competition. Contact us today for a consultation.