Employers are constantly competing for the same talented employees in their chosen industry or location. Developing and implementing an attractive benefits package is a great way to attract top talent to your business. However, in your attempt to claim these employees, the benchmarking process is critical. Through benchmarking, businesses have the opportunity to measure their unique position in terms of benefits in comparison to the competition. As benchmarking is not always an easy process, an experienced benefits consultant can help you navigate the process.
What Is Benchmarking Analysis?
Benchmarking is a common process with a goal of defining the best practices, establishing baselines, and identifying opportunities for improvement. While benchmarking can pertain to a variety of areas within a business, it is commonly used when developing employee benefits packages. Companies often conduct benchmarking as part of a strategy to develop a more comprehensive benefits packages that appeal to a pool of top talent. Through benchmarking, companies are also able to better gauge what is needed to gain a competitive edge.
The Benchmarking Analysis Process
The benchmarking process begins with the planning phase. To complete this phase, you will need to answer a number of questions pertaining to the internal processes of your company. How do you acquire new customers? Who are your competitors? What benefits are being offered now and are they effective? Also take the time to analyze the financial component of your existing employee benefits program. What is the total cost as of now and do you plan to increase, decrease, or keep costs the same in the future?
Once you have looked at your internal processes and collected data about your competitors, it is time to analyze what you have acquired. Information can be gathered through a variety of sources, such as interviews, case studies, data analysis, and similar sources. The analysis phase is all about understanding the strengths and weaknesses of your competitors and defining how those strengths compare with your own performance. What can you learn from your competitors and are there things that you can do better?
As you progress through the benchmarking process, there are a number of factors that you will want to address. These may include the program’s cost-sharing measures, voluntary offerings that may be available, the design and cost of required or offered workers’ compensation, and the impact of paid leave. Also take a moment to think about the overall design of the benefits plan and what changes you plan to implement to make your plan more attractive to both potential candidates and established employees.
Once you know what you have to do, you want to apply what you have learned. Take action by finding the best benefits for your employees that will give your company a competitive edge. Consider all of your options, such as health insurance, family benefits, vacation and personal days, retirement plans, flexible work arrangements, relocation expenses, and paid leave, among others. Remember, most modern employees demand certain benefits, such as disability insurance and retirement plans. Without these key benefits, you could risk losing top talent to your competitors.
What are the Benefits of Benchmarking Analysis?
There are a number of key benefits that can be achieved through benchmarking analysis. First, benchmarking allows you to better compare your existing employee benefits package with those of your competitors who may be recruiting from the same talent pool. It can also help your company more accurately measure your return on investment. Determine whether or not the money that you are spending on employee benefits are actually paying dividends when it comes to employee retention and staff morale. Without a measurable tool, it can be difficult to determine what benefits are most valued by your workforce.
By understanding benchmarking and using your findings in the most efficient ways, you can also boost your company’s public recognition. Having your company appear as a “great place to work” on social media and elsewhere can have a major impact on your ability to bring the most talented employees into your ranks. Benchmarking helps make employers more aware of what their competitors are offering in terms of benefits which allow these companies to make a move that puts their business in the spotlight. Benchmarking analysis is a great way for your business to match or possibly exceed industry standards.
Benchmarking can also help you reduce overall costs. After going through the benchmarking analysis process, you may find out that your employee benefits package far outweighs your competitors in terms of cost. If you are being far too generous with your benefits or bonuses, it may be time to reexamine your budget and cut back on some of these components. You can still attract top talent with your benefits package without overspending.
Better benefits can lead to increased employee retention and satisfaction. This is critical for businesses in all industries. Once you have acquired talented employees, you want to keep them around. When employees come and go, you have to spend more money to find, interview, and process new staff. This can be a time-consuming process that affects your bottom line. By developing an employee benefits package that your staff actually wants, you are more likely to retain your employees. You may also find that when you offer better benefits, your employees are happier which directly affects their performance and overall morale.
Learn More About the Benchmarking Analysis Process
Some companies make the mistake of never updating or improving their employee benefits package. It is important to remain up-to-date about what modern workers want from their employers and how you can provide these benefits while still sticking to your budget. The benchmarking analysis process is a great way to see where you stand compared to your competitors and how you can improve your employee benefits to attract the best talent in your industry. For more information about the benchmarking analysis process or for assistance with developing a solid employee benefits package, contact the benefits consultants at BBG Broker today.