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Offering competitive benefits is crucial to attracting top talent.
According to a 2024 Maven report, 57% of employees have chosen their current job or will take up another job solely because of better family benefits.
So, for businesses that understand the value their team members provide, it is vital to know how their benefits compare with industry standards. You can match or beat their proposals once you see what other companies offer.
At the same time, you should also be careful because offering above-and-beyond benefits comes at a cost. Although retaining employees through benefits can help maintain or improve productivity, there might be some diminishing returns to your bottom line for extravagant and unnecessary benefits.
This is why understanding how your company stacks up by benchmarking benefits online can give you a clearer vision of what benefits to offer.
In this article, we will discuss the main benefits of benchmarking, how to gather data, and how to use this data to create insights for your team.
While benchmarking is known for identifying best practices in an industry, it is also the best way to keep your employee benefits package competitive, satisfactory, and cost-efficient.
Here’s a breakdown of how benchmarking achieves this:
Benchmarking will help you understand what benefits other companies in your industry offer.
For example, if you are in the manufacturing industry, you must provide health insurance for your floor workers or production managers. The question now is, how much should the coverage be, and which provider should you select?
By benchmarking, you can identify how your competitors have provided a cost-efficient yet comprehensive or assuring healthcare program. In this case, you can start asking questions like:
You can try to reverse engineer what your competitors have done and provide more competitive benefits, like a higher tier of a health insurance plan.
Alternatively, you can match their health insurance plan and offer another fringe benefit that might be more cost-effective but attractive to potential hires.
Employees compensated fairly and within or above the industry standard are more likely to be productive.
You need to perform a benchmarking exercise to know what these industry standards are, and you could even learn the effectiveness of certain benefits on the workforce of other companies.
Your team can use this data to calculate your retention and hiring budgets.
The best part of benchmarking is it allows you to identify the optimal costs while offering competitive benefits to team members.
You could go the extra mile and give your employees the best healthcare plan, a fully sponsored professional development program, a gym in the office, daycare, and more, but all these will cost you and the company.
Benchmarking helps you balance lower operational costs and a contented workforce.
To find out how your company stacks up, follow these steps to benchmarking benefits online:
Firstly, you can consult with your leadership team on which benefits they want to offer and see if they align with wellness concepts. You could also request a budget from them to limit your scope.
If they are unsure which benefits to offer, you can visit the job boards to benchmark expected benefits in other company plans. Target companies within your industry, and if you are considering benefits for a particular position, use keywords from their role to find job posts.
To effectively manage human resources, it’s essential to leverage technology that streamlines processes and enhances decision-making. By utilizing data-driven insights, HR professionals can make informed choices about employee management and benefits.
You could also use HR solutions software that provides an overview of employee benefit packages. For instance, the best HR software lists include platforms like Shortlister, which can show you the available vendors and reviews of their offerings. By selecting from Research.com’s best online HR software, organizations can ensure they are choosing reliable tools that enhance productivity and employee satisfaction.
Furthermore, these platforms often come with robust analytics features that help HR teams assess the effectiveness of various benefit packages, ultimately leading to more strategic resource allocation. HR teams can use these analytics features to make data-driven decisions about employee benefit packages and improve overall employee retention.
Some HR tools can also help gather current feedback from your team members.
Asking their thoughts on their current benefit packages not only helps you learn more about what is expected of companies today but also makes your employees feel heard.
You could also use benefits administration industry reports and surveys to gather enough data on the types of benefits employees look for. For example, some employees might prefer healthcare plans that include check-ups for their families. Meanwhile, others might want coverage for mental health.
Once you’ve gathered enough benchmarking data, prepare an analysis using the following metrics:
Now that you have your company’s and competitors’ data, you need to perform a side-by-side comparison and a gap analysis. Here’s how you can do both:
Present these results to your leadership team to help them understand how your company compares to others in the industry.
Work with your leadership team to develop an improvement plan based on your results.
In conclusion, if you want to attract and keep the best talent for your team, you need to offer competitive benefits.
Benchmarking is a powerful tool that provides a competitive edge, enhances employee satisfaction, and maintains cost efficiency. Regularly performing these exercises will help your company stay ahead in the market, leading to a more engaged and productive workforce.
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