Has your company’s total benefits spending gone up again at the last renewal, even though turnover in your highest-value roles hasn’t changed? Do you keep losing prospective employees to larger companies even though you’re offering competitive salaries?
If this sounds familiar, the problem may be a misalignment between the benefits you spend money on and the benefits employees value.
Benefits consulting services can help you perform a total rewards audit, which can help you identify issues like these by comparing what a company spends across its total benefits versus what similar employers spend and what employees actually use.
For a CFO or HR manager evaluating a renewal or building next year’s compensation budget, that comparison turns a line item on a spreadsheet into a decision with a defensible number attached.
What a Total Rewards Audit Actually Measures
A total rewards audit starts with a full accounting of current spend by category, then maps that spend against market benchmarks and internal use.
Benchmarking data comes from large, current samples. For example, SHRM’s 2026 Benefits Benchmarks draw on more than 280 employers and 500,000 employees, while Mercer’s 2025 compensation planning research (the latest available at time of writing) surveyed 1,000 U.S.-based businesses to guide budget planning.
Recent data from Mercer shows employers budgeting merit increases in the mid-3% range, a normalization from recent pay spikes.
Industry reports like these give consultants hard data to look at when comparing employee benefits. Taken together, the data allows agents to test whether a proposed benefits reallocation might compete with payroll growth or work alongside it.
The output of a total rewards audit is a cost-per-employee breakdown by category, set against a measure of what each dollar should be producing, whether it’s increased retention and recruitment or stronger plan participation.
Where the Gaps Usually Show Up
Rewards audits at mid-market companies tend to discover similar issues. The most common are a health plan priced above the market median and a retirement match that sits below it. That mismatch is not just an inefficiency.
SHRM’s 2026 survey data show 82% of employers now rate retirement benefits as very or extremely important to their workforce, on par with paid leave. This means that overspending in one column while underfunding the other may lower the average employee’s satisfaction with the plan, even if the company is paying enough to fund both programs adequately.
Underused programs tend to stick around simply because nobody measures them. Wellness stipends, EAP access, and legal or financial counseling benefits often show enrollment in the single digits, yet they keep showing up as a line item cost every renewal cycle.
The sections that aren’t being funded at all are often the cheapest to fix and the most expensive to ignore. EBRI’s 2025 research on voluntary benefits found that addressing high cost of living (42%) and unexpected expenses (40%) were two of the top three most-cited issues that voluntary benefits were designed to address.
The absence of those categories from your benefits package isn’t neutral. It can show up as a disadvantage against competitors, one a company might not see named in an exit interview.
Reallocating Spend Instead of Increasing It
Once a total rewards audit identifies missing benefits, the fix is rarely a vastly larger budget. More often, reallocation of budget has more impact, and the sequencing matters as much as the decision itself.
A consulting firm can help you prioritize changes by cost to implement against the expected effect on retention or recruiting. This means starting with adjustments that can be made inside your existing budget, such as shifting an underused stipend toward a more valuable voluntary benefit or rebalancing contribution strategy between health and retirement categories.
A benefits consulting group can then help you plan new designs, change funding models, and shift contribution strategies over a multi-year sequence. A three-to-five-year roadmap lets a company phase in the more expensive corrections around budget cycles instead of absorbing them all at once, and creates a rewards strategy as opposed to a series of annual decisions that feel arbitrary and hard to explain to the employees.
The Compliance Dimension a Rewards Audit Should Not Skip
Most employer-sponsored benefit plans are governed by the Employee Retirement Income Security Act (ERISA), a federal law enforced by the Department of Labor (DOL). The law describes standards that benefit plan fiduciaries must meet, including that they are in the participants’ best interests, are followed by the company, and avoid conflicts of interest or self-dealing.
Shifting dollars through a Section 125 cafeteria plan carries its own IRS rules on election timing and permitted changes. The plans allow employers to offer participants a choice between taxable and nontaxable benefits, including:
- Accident and health benefits (excluding Archer medical savings accounts and long-term care insurance)
- Adoption assistance
- Dependent care assistance
- Group-term life insurance coverage
- Health savings accounts
Changes to a retirement plan’s contribution structure or other design features may involve ERISA requirements, but the decision to amend the plan is generally ascribed to an employer (“settlor”) function. Fiduciary duties may apply when those changes are implemented. A properly run total rewards audit should flag these items for legal review before implementation rather than after a Department of Labor inquiry raises them first.
This brief summary isn’t intended to replace legal counsel, and a broker does not guarantee compliance outcomes on a client’s behalf. But a rewards audit that ignores the compliance layer is incomplete regardless of how strong its financial case looks.
Next Steps With Business Benefits Group
A total rewards audit may help to give CFOs and HR managers a defensible answer for why the benefits budget is allocated the way it is, and a plan for what changes next and when. Business Benefits Group’s six-step process for advising and supporting organizations begins with an assessment and moves through strategic planning.
If this year’s numbers have raised questions you can’t yet answer, contact Business Benefits Group about what a total rewards audit would show for your organization.