The Importance of Employee Benefits Benchmarking for Employers

The world has been turned upside-down again and again over the past few years. In the wake of the COVID-19 pandemic, employers and employees alike are pausing to reassess their priorities. And this pause has caused extreme and unexpected workplace changes across global industries. An unprecedented percentage of the workforce are exiting their jobs, leaving massive talent gaps in most offices. Retention is the most urgent problem most businesses are trying to address and the old methods are no longer functioning to keep key players around. 

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A lush financial package used to be enough, but contemporary workers may only be enticed by competitive and comprehensive benefits. Your organization may already have a few in place, but to stand out as an employer, you may need to update. One way you can make this happen is by benchmarking your employee benefits.  

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What are employee benefits benchmarks?

An employee benefits benchmark, at its most basic, is a benefits comparison point between your organization and other organizations within your industry. Performing benefits benchmarking analyses allow you to gain insight into the benefits offered by competitors and, using any number of metrics, see how you measure up. 

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Your benchmark can be broad, or incredibly detailed depending on your need. Common aspects which benchmarking analysis will take into account include:

• Benefits price tag.
• Worker’s comp.
• Voluntary benefits.
• Compulsory benefits.
• Plan structure. 

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The types of data you’re accessing will influence how in-depth your analysis may be. More detailed information can allow you to set granular benchmarks for benefits across different locations and even positions within a company. 

Why you should benchmark employee benefits

Benefits benchmarking can prove to be an expensive undertaking. But when leveraged correctly, the advantages far outweigh the pitfalls. These advantages include:

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• Insight into benefits ROI, and strategic flexibility. When you perform a benefits benchmarking analysis, you’re not just taking a closer look at the competition. You’re also going to dive deeper into the current state of your own employee benefits strategy and gain perspective on its actual cost and functionality.
  
  One benefit of this insight is you will be able to discern what your benefits are doing for you, whether they’re working, and what is the impact on things like retention and employee satisfaction. This can also help you to identify gaps in your current strategy and fill them in accordingly.
  
  In relationship with other companies, you can also either advance or scale back extraneous spending on your program depending on where you stand in the competition.

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• Better understanding of current competition. The data you return through your analysis will give you a broad overview of what you’re up against in your current industry. You may also discover competing businesses of which you were previously unaware, which may give you strategic advantage in other areas, including employee benefits.

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• Insight into industry and global changes. Ideally, benchmarking will be a regular practice that allows you to keep up with trends and stay competitive in the benefits you’re delivering. This insight allows you to keep tabs on what are the most desirable benefits, how commonly they’re offered, and whether you should add them to your repertoire. 

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What types of employee benefits to benchmark

You don’t need to benchmark your entire benefits portfolio every time. Especially if your company offers very obscure or specific benefits, those aren’t the ones you need to be measuring against other organizations. Because it is an expensive process, it will be most advantageous to you to benchmark consistently desirable benefits, including:

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Financial benefits

This includes benefits like retirement planning accounts, PTO and vacation time, and student loan repayment support.

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Health and lifestyle benefits

This includes benefits like comprehensive health and dental insurance, parental leave, and sick leave.

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Educational benefits

This includes benefits like internal upskilling and reskilling programs, and other workforce education solutions. 

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What to do when employee benefits benchmarks fall short

If you find your company’s benefits package looks lackluster next to the competition, you should:

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Step 1: Establish goals. Whether that’s simply increasing retention or becoming a top-ranked employer, whatever actions you take to better your benefits should bridge towards concrete objectives to help control costs and timeline.

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Step 2: Perform a more in-depth analysis of your employee benefits strategy from an internal perspective. Where are the most urgent pain points in your current strategy? Which benefits are having the greatest impact on employee experience, and your organization as a whole? Which benefits need to be updated now?

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Step 3: Ask your employees. A lot of your information will be data-derived, but your employees are your best resource if you want to know which benefits are missing from your portfolio, and what updates or inclusions would most tempt them to stay with your organization.

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Step 4: Look at the benefits offered by your competition, especially the ones which are going above and beyond for their workforce. These are the ones you want to model your update against. Just make sure to scale it for your organization.

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Improve financial wellness benefits with Origin

Establishing financial stability and wellbeing is a top priority for most within the current workforce. And an employer that can offer this to their employees can gain a competitive advantage on companies who can’t. 

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Origin is a financial wellness solution designed to help organizations holistically support their employees with a comprehensive money management strategy which includes compensation, benefits, and more for long-term, big-picture planning. 

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Sign up for a free demo today to see what Origin can do for you. 
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Want to learn more about financial wellness? Check out our other insight: Employee benefits gap.