Why employee benefits benchmarking drives change

Ever ponder what your competitors are doing to attract and retain employees?

How your company benefits compare alongside others of similar size or demographics?

Do your benefits line up with your company’s brand?

Benchmarking will accurately answer these questions and allow you to see just how you stack up against the competition.

Benefits benchmarking is an in-depth analysis of how your employee benefits offerings compare to those of others in your industry, similar industries, geographic region, similar size or a mix of all four.

There are times when an employer’s benefits program is top of the line when compared to their peers. In these cases, changes to the program may not be necessary.

Often, however an employer does not offer a robust benefits plan —one reason being that perhaps it hasn’t been reviewed in a while - but looking at it can make the difference in keeping your employees engaged and happy. Knowing what others are doing allows you to keep-up with your industry and will make your company stand out.

Facilitating a change

When we show benefits benchmarking data to a client, they typically react to the information in one of two ways: “We want to be above average – what should we do to improve” or “Great! We’re basically doing what everyone else is doing and that’s good enough.”

That’s where we start the education process.

Ultimately, it’s all about what you do with the information.

For example, basic benchmarking data for a B2B consulting firm with fewer than 100 employees show that for medical, the most popular type of plan offered is a PPO (88%). The average PPO copay is $25 for an office visit, and the average individual deductible is $500.

The average premium cost share for an employee is 60% for employers and 40% for the employee. It’s important to note that this premium cost share is on the low side for employers across all industries here in the North Bay.

Decision makers at these B2B companies, as is true for any industry, may take a more inspired approach - which we love - that their plan needs to be better than average.

So, when they see the benchmarking data, they determine that they will adjust their plan’s cost share, office copay or deductibles.

One firm might decide their premium contribution should be higher than 60%. Another might select a plan with a lower annual deductible of $250.

On the other hand — and we hope not — decision makers at these firms may take the approach that since the data shows that what they’re offering is in-line with other similar organizations, they do not need to make any changes to their programs.

Never mind the fact that they’re just average (sometimes below average) for their industry. They can often actually be far below average when benchmarking their benefits offerings across all industries.

Since the waning of the COVID-19 pandemic, there’s been a global shift in attitudes toward work and what an employer should do for an employee. Employees are demanding more, and please be aware, they will job jump to get what they’re looking for.

We’ve seen this with employers being caught on their heels after being unwilling to make improvements to their benefits, policies, and overall attitudes.

An analysis like benchmarking gives the employer the power of information so they can confidently stand behind what they’re doing for their employees. For small employers (under 100 employees) this can be a game changer.

Other applications for benchmarking data

Let’s say, for example, a small construction company sees that its medical plan has a higher deductible than other construction companies in the area.

They also see their employer contribution is lower than other slightly larger companies, but they can’t afford to make a change at this time. This small employer can still use the benchmarking information to stay competitive in this climate, just in different ways.

They can offer more paid time off, more flexibility in scheduling or even perks like new work boots (or other equipment). The company can easily be transparent with their shortcomings while highlighting the incentives they can offer.

The bottom line, COVID or not, our work culture has dramatically shifted forever, and now is the time to think differently to ensure your success.

The traditional mode of operation no longer works. Closely examining these needs and changes will make the difference between a solid, loyal team and a large attrition rate that leaves you to the costly task of constantly replacing team members. Benchmarking reports help you eliminate these issues and create a blueprint for best actions and practices.