Employers often turn to benchmarking to compare their employee benefits to those offered by similar organizations. The benchmarking process can also be performed internally by analyzing the company’s processes, performance, and strategies.
Organizations use a set of quantifiable measurements called key metrics to measure business activity and long-term performance accurately.
There are several ways that companies evaluate and measure the effectiveness of their employee benefits packages, such as the use of employee key performance indicators (KPIs), data collected from employee surveys, and tracking employee turnover rates.
Learn more about key metrics for measuring benefits benchmarking and what a cost-effective benefits plan looks like.
How Employee Benefits Influence Your Business
Employee benefits play an essential role in helping organizations grow and remain competitive. They are necessary for employee recruitment and retention. According to a Glassdoor Employment Confidence Survey, 79% of employees prefer new or additional benefits over a pay increase.
In addition to attracting the best job candidates, a comprehensive employee benefits plan can help minimize employee turnover. Reduced turnover can save companies money on hiring and training, and important projects and deadlines are less likely to get overlooked.
Employee benefits are also essential to maintain a healthy workforce. Workers with access to adequate health and wellness benefits are less likely to call in sick or develop chronic conditions that could result in lengthy periods of leave. A robust benefits package can instead boost employee productivity and morale.
Measuring Employee Satisfaction
Employees tend to feel more satisfied when they feel their employer cares and values them. There are several ways that employers can measure employee satisfaction, such as the following strategies:
- Send out surveys. Anonymous surveys can help employers better understand employees’ feelings about benefits and coverage options.
- Have team meetings. Have regular discussions with team members about how they feel about benefits and where improvements can be made.
- Hold exit interviews. Employees are often more forthcoming when leaving a business. During the exit interview, ask about the company’s benefit offerings.
Tracking the Utilization of Your Benefits Programs
Utilization rate is a key metric that can help employers evaluate the effectiveness of their employee benefits program. Tracking which benefits employees use can aid decision-making by giving employers the insight they need to eliminate or expand upon benefits to meet employee demand.
Regular utilization reviews can also maximize return on investment (ROI) on benefits investment, identify education or communication gaps, and improve overall employee retention.
What Does a Cost-Effective Benefits Program Look Like?
Employee benefits are often some of the top expenses for organizations. However, many employers need help to balance coverage and cost. A robust benefits strategy can help organizations save money on their employee benefits program while remaining competitive.
A cost-effective benefits program should begin with an established budget and objectives. Consider the business’s industry, location, and size when crafting a realistic budget that includes in-demand benefits and eliminates money-wasters.
Developing benefits can be challenging and requires employers to compare cost savings, establish which offerings should be prioritized, and decide whether to outsource.
Key Metrics that Stakeholders Want from Benefits Benchmarking
Stakeholder expectations are important drivers of project success. Organizations strive to effectively communicate with stakeholders to achieve sustainable growth, foster positive relationships, and drive innovation.
Key metrics can help organizations better assess the impact of employee benefits, identify improvement areas, and better align benefit goals with stakeholder expectations.
Measuring and monitoring benchmarking results involves the use of important key metrics. Let’s look at some key metrics that stakeholders want from benefits benchmarks.
Metrics Used to Identify and Address Issues
Benefits data and analytics are essential to measure benefits programs’ value and effectiveness accurately. The relevance and usefulness of specific metrics vary among businesses. Some key metrics used to identify and address issues include:
- Financial Metrics: One of the most widely used metrics includes financial metrics. This includes benchmarking metrics such as cash flow, revenue, profit, and return on investment.
- Operational Metrics: Various operational metrics, such as quality, waste, and productivity, can help businesses measure their operational performance and identify areas of improvement and optimization.
- Employee Metrics: Employee metrics can determine employee satisfaction, retention, engagement, and performance. Examples include employee turnover rate, satisfaction score, and productivity rates.
Metrics Used for Showcasing Success
Many key metrics can help organizations showcase their success over time. Some of these metrics include the following:
- Goal Tracking: Goal tracking enables organizations to accurately measure the feasibility of reaching specific goals and how these goals are connected to larger business objectives.
- Company Performance: Organizations can make a high-level comparison of how well employees perform compared to their satisfaction and motivation levels.
- Employee Performance: Employers can track employee performance through peer reviews, self-assessments, manager assessments, or a combination.
Staying Ahead of the Competition with Benefits Benchmarking
Benchmarking can be a strategic tool that gives organizations a unique viewpoint to evaluate benefits performance. Through benchmarking, organizations can identify new opportunities that could help them gain a competitive advantage, such as adopting flexible work hours or expanding wellness benefits.
Benefits benchmarking can also help organizations better understand their competition and how their competitors attract and retain employees. Through external benchmarking, employers can examine strengths and weaknesses and learn how to outperform similar organizations in the industry.
Comparative Metrics for Competitive Analysis
Many organizations believe that monitoring their competitors through competitive analysis can benefit their long-term success. Several useful competitive analysis metrics may prove invaluable, such as:
- Benefit Costs: Businesses can gain deeper insight into the cost of different benefits by looking at the latest trends and figures on industry benefits data.
- Engagement Rates: Reviewing employee engagement rates in certain benefits can paint a clearer p21icture of the most utilized benefits.
- Performance: Comparing employee performance before and after offering certain benefits can show businesses the value of certain offerings.
Anticipating Industry Trends Using Benefits Benchmarking
In today’s competitive market, anticipating industry trends has become essential for companies that want to stay ahead of the competition. Identifying trends enables organizations to anticipate changes in employee demand and preferences.
In addition, staying ahead of the curve allows companies to offer benefits that better meet the needs of their employees. Anticipating industry trends can also be useful for helping businesses identify new business opportunities.
This can be especially useful for organizations that have experienced employee recruitment and retention challenges in recent years. Identifying industry trends helps employers attract top-tier job candidates and retain existing staff.
New City Turns Your Benefits Benchmarking into Actions
Benefits benchmarking is a widely used business process that can help organizations compare their metrics to other businesses to analyze what is effective and what is not in their respective industries. There is always room for improvement when it comes to employee benefits, and benchmarking can help companies narrow down where improvements can be made.
At New City Insurance, our team of knowledgeable employee benefits consultants has helped countless businesses establish key metrics to measure benefits benchmarking. For more information or to schedule a consultation, contact the experts at New City.