In the modern business landscape, a competitive salary is no longer enough to attract top talent. For many job seekers and existing employees, a benefits package can be just as important as income. How can organizations ensure their offerings compare favorably to their competitors? Benefits benchmarking can provide the answers.
What Is Benefits Benchmarking?
Benefits benchmarking is a business process that entails analyzing how a company’s employee benefits compare to its competitors’ offerings It can assess numerous aspects of the benefits offerings, from total costs and plan designs to voluntary offerings and cost-sharing measures. The data may also be broken down into specific categories, such as job titles or geography, depending on the business’s needs.
The Importance of Benefits Benchmarking for Employers
Here are some ways benefits benchmarking can give employers a competitive edge.
Recruitment and Retention
Recruitment and retention efforts are often the driving force behind employee benefits benchmarking at companies. The information gleaned by benefits benchmarking can help organizations create attractive job descriptions and career pages to motivate high-value candidates to apply. In today’s job seekers’ market, benchmarking is a great way to keep plans up to date and ensure they are as competitive as possible.
Determining Return on Investment
One of the biggest concerns for many businesses is the return they are getting on the benefits they offer. Although benefits play a major role in attracting and retaining employees, they are only effective if employees need and use the benefits offered.
Employee benefits benchmarking can assess participation rates and determine whether specific offerings meet their goals. For example, suppose a business introduces a wellness program intending to lower its healthcare premiums. In that case, benchmarking can provide insight into whether these objectives are being met.
However, more than the financial return on investment needs to be evaluated. Employee engagement is another useful metric derived from employee benefits benchmarking. This can be challenging to measure, but employee surveys and absence statistics can provide valuable insight.
For example, absence statistics may reveal that employees are missing work due to mental stress. Offering additional mental health benefits could help absenteeism drop and ensure employees are mentally prepared to be productive and find a positive work-life balance.
Data on the company’s return on investment can be used to identify which programs employees are not using to their fullest potential. This can help them refine their offerings and focus on those that employees will truly value and appreciate.
While core benefits such as healthcare and retirement will always be well-received by a significant proportion of the workforce, other benefits depend more on the business’s operations, working style, and employee population.
For example, the increasing prevalence of hybrid or remote work may make on-site perks such as a café or in-office daycare less attractive than benefits such as home office stipends or gym memberships that give employees more control over their spending.
Staying on Top of the Needs of Diverse Workplaces
The employee populations at many companies are becoming increasingly diverse, which means that businesses must find an effective way of meeting the disparate needs of employees from different backgrounds and in various stages of their lives. This can be challenging to navigate without the data obtained from benefits benchmarking guiding decisions.
Identifying New Trends
Employee benefits benchmarking can also find emerging patterns in a business’s overall workforce or certain segments, such as employees with certain job titles or age demographics. This information helps companies optimize their offerings and ensure they have an edge over their competitors.
This is particularly useful for smaller businesses that cannot compete with big corporations in terms of financial benefits but may have an easier time getting on board with more unique or creative benefits, such as pet-friendly workplaces.
Keeping Offerings Up to Date
In addition to uncovering new trends in the benefits world that might appeal to an organization’s workforce, benefits benchmarking is useful for identifying cases where benefits have gone out of date.
Even the most carefully planned offering that was highly attractive when it was developed will eventually lose its relevance, and employers who fail to notice and acknowledge this could see long-term employees leaving for competitors who offer better benefits.
Although your salaries, promotions, and bonuses may increase regularly, ensuring your benefits remain competitive and account for inflation is equally important.
Learn More About Benefits Benchmarking with Business Benefits Group (BBG)
Whether your aim is to identify the most popular benefits in your industry to ensure you are meeting or exceeding expectations or you want to find unique offerings that can help your organization stand out to job seekers, employee benefits benchmarking is a cost-effective way of developing a stellar benefits package that suits your budget and goals.
The knowledgeable benefits consultants at Business Benefits Group (BBG) can provide valuable insight into benchmarking analysis and the value it can provide your business. Call us at (844) 201-3609 today or complete our online contact form to request a consultation.