An important part of recruiting and retaining talented employees is offering a competitive benefits package, but deciding which areas to invest in can be challenging. Employee benefits planning is a complex process that requires careful research.
Staying on top of the latest developments in benefits programs is widely considered imperative for driving employee retention. However, businesses that want to stay ahead of the pack need a comprehensive understanding of how their benefits compare to those being offered by the competition.
This is where employee benefits benchmarking can be incredibly useful. Here is a look at what this entails and how it can help your company develop a sponsored benefits strategy that helps it stand out.
What is Benefits Benchmarking?
Benefits benchmarking is a type of analysis comparing a company’s employee benefits with those offered by employers in the same or similar industries.
Effective company-sponsored benefits benchmarking will consider factors such as workers’ compensation, voluntary offerings, cost-sharing measures, planned designs, and the overall benefit costs. In many cases, benefits data will be broken down by job title, geography, and other relevant categories to the business.
What Are The Advantages of Company Sponsored Benefits Benchmarking?
Below are some reasons that benefits benchmarking is a worthwhile endeavor.
Identifying Trends
The data collected for a benchmarking report can help a business understand how its employees feel about the offerings and provide valuable guidance on improving its benefits strategy.
It can also point to trends within categories of benefits offerings, such as the shift from businesses investing in PPOs and HMOs in favor of high-deductible health plans.
Pointing to Competitors
Most businesses believe they have a clear idea of who their competition is, but benchmarking can help identify some competitors that a business may have overlooked. It is common for employers to focus their attention on their biggest competitors, and this can mean that emerging ones slip under the radar.
An industry-specific benchmarking report can single out these potential competitors so businesses can focus on creating strategies that keep them from surpassing them.
Evaluating Strategies
Benchmarking can give employers a way of measuring the return on investment they are getting from their current benefits offerings. In addition, It can show them if their spending on benefits is actually increasing employee retention and enhancing their recruitment efforts.
It can also draw attention to any gaps in a company’s current offering that could be causing it to lose employees to the competition. In addition, benefits benchmarking may point to cases where businesses offer more benefits than they need to and unnecessarily spend money. Finally, these reports can help businesses decide whether to scale back their benefits offering or increase it.
Which Benefits Should Be Benchmarked?
The benefits that should be benchmarked have shifted in the wake of the pandemic, as COVID-19 has led to dramatic changes in how business is conducted. Nevertheless, health benefits remain a top priority for employees and can often be the primary factor when deciding which job offer to accept or whether to stay with a company.
Sick leave, parental leave and paid time off are popular offerings. However, more and more employees are seeking jobs that offer the option to work remotely or on a hybrid basis. Flexible working hours are also gaining steam as employees seek roles that suit their family responsibilities or help them avoid lengthy or stressful commutes.
Where Does Benchmarking Fit Into Employee Benefits Planning?
Benchmarking provides valuable insight and is worth the effort for businesses with a budget to support it. However, it is only one part of a larger strategy that entails the following steps:
- Determining the needs of employees: Accurately assessing the needs and expectations of employees is an important starting point. The demographics of the organization should also be considered.
- Defining goals: The organization must identify its most pressing needs and set measurable goals.
- Budgeting: Businesses need to find the right balance between compensation and benefits and ensure the offering fits into their current budget and any anticipated budget or cash flow changes.
- Communicating the plan: When employees are unaware of the benefits or need to learn how to access them, the plan is unlikely to meet its goals. Therefore, it is essential to outline an engagement plan to help employees understand and appreciate their benefits.
- Monitoring and reassessing: Finally, organizations need to monitor the impact of their strategy, collecting feedback via surveys and analyzing how many employees are using the benefits.
Schedule a Consultation With the Employee Benefits Benchmarking Professionals
Ensure your company-sponsored benefits plan suits your budget and appeals to existing and prospective employees with help from the employee benefits consultants at Business Benefits Group (BBG). Our team offers a comprehensive benchmarking analysis that can give you an edge over the competition. Contact us today to schedule a consultation.