Operating a successful business means always looking for ways to improve and grow. Benchmarking is an effective strategy in which a company compares itself against certain standards and develops specific methods to measure performance.
With benefits benchmarking, a company’s employee benefits are compared to its competitors’ offerings to assess many aspects, such as plan design and cost. Businesses can make widespread positive changes in the workplace by using information gathered from benefits benchmarking, giving the company a competitive edge.
Learn more about the impact of benefits benchmarking and how this proven strategy helps businesses make important decisions.
Why Benefits Benchmarking Is Important for Employers
By practicing benefits benchmarking, employers can obtain factual statistics of how they measure up against their competition. Employers that leverage benefits benchmarking often identify improvements in many areas, including recruitment and retention.
The data gathered from benchmarking can help businesses craft attractive job descriptions that bring in top-tier candidates. Through benefits benchmarking, companies can also accurately determine the return on investment.
Benchmarking can be used to assess participation rates, an important metric providing valuable insight. With information derived from the company’s return on investment, businesses can determine which benefits employees are not using to their full potential and refine these offerings to reduce costs.
Key Benefits for Employers
Benchmarking can help organizations make improvements in areas that need it most. Some of the key benefits of benefits benchmarking for employers include:
- Identify Gaps: Performing a competitive analysis can help businesses identify business gaps and indicate where improvements can be made.
- Set Goals: With information derived from benchmarking, employers can set new competitive and attainable goals.
- Establish Roles: Benchmarking involves communicating with everyone in the business, which can help all team members better understand their roles.
- Monitor Performance: Benefits benchmarking involves keeping up with current trends and projecting future ones to maintain a high level of success.
- Promote Change: With benefits benchmarking, employers can promote continuous improvement that benefits the business.
Communicating Key Benefits to Teams and Stakeholders
While the advantages of benchmarking are irrefutable, implementing them can sometimes be challenging. It is essential to carefully communicate these key benefits to teams and stakeholders and be prepared to face some resistance or skepticism.
Clearly explain the purpose and value of the benefits and use relevant success stories and examples to illustrate essential points and to inspire others. Include teams and stakeholders in each phase, from planning to execution. Be open to suggestions and opinions and listen to objections and concerns.
It is also important to be flexible and adaptable. Benchmarking is not a static process but can be adapted to meet changing needs and preferences. Businesses should always tailor their methods and approaches to suit specific challenges and objectives.
Extract the Most Value from Your Benefits Benchmarking
Benefits benchmarking should not be approached as a one-time exercise. To maximize the value of benchmarking, make it a regular practice. Continuing to improve internal operations by benchmarking procedures and processes can help teams become more productive over time.
Companies must understand what works within the business and where improvements can be made. Performing an in-depth analysis of the company’s past performance enables employers to identify patterns and trends that provide a clearer picture of what improvements can foster the best results.
Beyond Financial Benefits of External Benchmarking
External benchmarks give companies a realistic view of their business performance compared to similar firms. Measuring performance against outside standards can help businesses identify areas that require improvement and areas where the company excels.
With external benchmarking, organizations can objectively assess the business’s performance, gain insights into the practices of industry leaders, and adopt them to gain a competitive advantage. External benchmarking can also enhance decision-making by providing businesses with data-backed insights.
Beyond Financial Benefits of Internal Benchmarking
Internal benchmarking involves looking inward rather than to outside standards to determine best practices, analyze performance, and identify areas for improvement. Several types of internal benchmarking exist, including performance, strategic, digital, and practice.
The goal of internal benchmarking is to help businesses track their success. Is business improving? Is this improvement at an appropriate speed? Has progress stalled? Information gathered from internal benchmarking can help organizations answer these important benchmarking questions.
The Benefits Benchmarking Process
The benchmarking process is a structured approach that involves the collection of data, analysis, and incorporating best practices. These steps include:
1. Identify Benefits to Benchmark
The benchmarking process begins by identifying components to benchmark, such as health benefits.
2. Analyze Benefits
This step involves data collection and analysis to understand better the best practices competitors adopt and identify possible performance gaps between competitive organizations.
3. Establish Goals
Start by communicating benchmarking findings and develop a strategic action plan with guidance from teams and stakeholders.
4. Incorporate Best Practices
During this step, the action plan is put into play to bring change to the organization.
Benefits Benchmarking for Informed Decisions
Benchmarking is a transparent measure of success. Once a business has gone through the process of setting benchmarks, identifying competitors, collecting information, and analyzing the results, it can start making strategic decisions about the company’s future.
For example, through benchmarking, companies may discover that their competitors are attracting top talent by offering flexible work hours. With this information, the organization can determine if providing flexible work hours is feasible and how implementing a flexible schedule would work.
Balancing Employee Satisfaction and Cost Control
It can be tricky to maintain employee satisfaction while keeping costs manageable. One advantage of benefits benchmarking is reducing costs by increasing efficiency. Identifying and cutting out waste in processes, whether financial or time waste, can help businesses streamline their operations and retain a larger percentage of their revenue.
Feedback and data gathered from benchmarking can give organizations greater insight into what practices and offerings promote higher employee satisfaction rates.
Identifying Trends in the Healthcare Industry and Job Market
Health benefits remain one of the most sought-after benefits among today’s workforce. Benefits benchmarking is an effective way for organizations to determine what types of health and wellness benefits modern employees are looking for when seeking employment.
During the benchmarking process, organizations should focus on identifying trends in the healthcare industry and job market to make more informed decisions.
In post-COVID workplaces, this often includes prioritizing employee mental health and well-being by offering mental health services and wellness programs that empower workers to live healthier, happier lives.
Contact New City for Benefits Benchmarking Consulting
Benefits benchmarking can deliver countless advantages to growing organizations. Whether the goal is to identify the most popular benefits in a given industry or to attract top talent, employee benefits benchmarking is an efficient and cost-effective way to develop a comprehensive benefits package that meets the business’s goals and budget.
Working with a reputable employee benefits consultant is key to performing successful benchmarking. The team at New City Insurance has extensive experience assisting organizations in all industries with benefits benchmarking, including both internal and external benchmarking. For more information or to request a consultation, contact New City Insurance at 888.210.2765.