A Guide to Employee Benefits Benchmarking
What is Benefits Benchmarking?
In order to know whether your efforts are successful, you need to first be able to define what "success" actually looks like. That, in essence, is what employee benefits benchmarking is all about.
Essentially, you're analyzing how your current benefits offerings compare to other organizations - both of the same size that you are and that are operating in the same industry. There are a number of factors that influence what you should be offering. Even the cost of living in the area of the country your employees live in will play a role and benefits benchmarking can help you better understand all of it.
Why Run an Employee Benchmarking Report
The overarching reason why you should run an employee benchmarking report is that it helps you remain competitive. Understand that benefits are hugely important when someone is looking for a new job - even more than base salary in some cases. Likewise, if your benefits are inadequate compared to a similar organization, that's all the more reason for someone who might not be fully satisfied with their current job to start looking for a new one.
It always costs more money to hire a new employee than it does to retain an existing one, which is why this is one element of your operations that you always need to consider.
Employee benchmarking reports are also helpful for other reasons, like:
- They help you evaluate the overall return on investment (ROI) of your benefits. If you're paying money for benefits that people aren't actually using, those are funds that could be better used elsewhere. Likewise, if you had specific goals in mind when it came to something like a wellness program, benchmarking utilization rates can help you see whether you hit the mark or missed entirely. Saved money can be put into new offerings that they will use and that will also allow you to remain as competitive as possible in the marketplace.
- Helping with education of benefits. Benchmarking can help you understand the true value of the benefits that you offer, allowing you to promote that via your employees, on social media, during hiring, and more.
- Uncovering trends and patterns. The accepted best practices of employee benefits change rapidly and without being proactive it can be easy to miss important changes. Regular benchmarking helps you capitalize on new trends quickly, all while allowing you to stay ahead of the competition at the exact same time.
Methods for Employee Benefits Benchmarking
When it comes to successful employee benefits benchmarking, there are a few key methods you'll want to take advantage of.
Organizational Review
You'll want to begin this process by conducting a thorough organizational review to analyze your existing benefits as honestly as possible. Take a look at all basic categories, like:
- Your healthcare-related offerings.
- Compensation, bonus structure, retirement assistance, and related areas.
- The amount of vacation time and/or paid leave you offer.
- Insurance programs you offer like life insurance and disability.
- Any opportunities you offer like professional development or student loan repayment.
You'll also want to consider things that are particularly important to the younger generations of workers, like family assistance and work flexibility. Make sure you understand exactly what you currently offer and why.
Internal Survey
Another great way to accurately benchmark your employee benefits is to go right to the source - the employees themselves. Send out a survey to people who are actively participating in the current program. Ask them what they like and what they don't like. Inquire as to what their favorite parts are and what they feel is missing. Let them share where they feel like you're coming up short compared to other companies they may have looked at.
Make no mistake: your employees always have opinions. It is up to you to listen to them.
Competitor Data Analysis
Since part of putting together a terrific employee benefits package is all about remaining competitive, it stands to reason that you should also compare what you offer to others in your field, too.
When you do, always use raw data sources like the Bureau of Labor Statistics. Download reports from legitimate industry experts, even if you have to pay for them. Make sure you're comparing yourself accurately so you don't get the wrong impression about where your opportunities for improvement truly rest.
Third Party Audit (AEIS)
Part of improvement in terms of employee benefits has to do with your ability to remain objective. Involving a third party like the team at AEIS to conduct a third party audit can show you exactly where you stand with no "rose colored glasses," so to speak. As a United Benefit Advisor (UBA) firm, AEIS has access to one of the largest data sets around by combining the data of all 140+ UBA partner firms along with the existing industry data of the third party analytics firm, Milliman, Inc.
Because AEIS offers access to experts in terms of employee benefits and general HR needs, they can also pull data from many trustworthy sources to help accurately compare what you offer to those in your field. Not only will you see what can be improved, but you may also uncover what you excel at.
Are There Downsides to Benefits Benchmarking?
For many organizations, the only real downside to benefits benchmarking is how much time and or money the process can sometimes cost. You can try to do things internally, but you're likely only getting one small part of a much larger story. Reports, and especially partnering with a third party to conduct an audit, can add up.
But consider this. If your current employee benefits offerings are causing high employee turnover or are keeping top tier candidates from applying at all, you're likely losing more time and money than the reports would require. So benchmarking becomes an investment in fixing your problem today so that you can create a more prosperous business tomorrow.
Benefits Benchmarking Your California Business with AEIS
In the end, employee benefits benchmarking is something that you don't want to leave to chance. Just because you can't necessarily offer the highest salary for workers in your field doesn't mean you can't still outperform your competitors. To do that, you have to offer the benefits package that they need and want - and employee benefits benchmarking goes a long way towards making that happen.
If you'd like to find out more information about the major advantages of
California employee benefits benchmarking, or if you'd just like to speak to a team of trusted professionals who
understand your workforce and your industry, please
contact the team at AEIS today.
We're here to help.
Schedule a free phone consultation today.
P: 650.348.6234
E: team@aeisadvisors.com
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