Employee benefits benchmarking is the process of evaluating the competitiveness of an organization's benefits programs by comparing those organizations in similar industries, geographic regions, or size tiers.
Benchmarking requires gathering data on benefits offered by other organizations, validating the data, and running calculations to build a report. An organization will then collectively analyze the report and make changes to their benefits program at renewal time.
This process is repeated on a regular basis to ensure that the benefits program remains up-to-date and effective in attracting and retaining employees. Many organizations integrate benchmarking analysis each year for the following reasons:
Cost comparison: Benchmarking allows you to compare your benefits offerings to those of similar organizations, which can help you identify areas where you may be overspending or underspending and adjust accordingly.
Attracting and retaining employees: Understanding the benefits offered by competitors can help you stay competitive and attract top talent. It also allows you to ensure that your benefits package meets the needs and expectations of your current employees.
Compliance: Keeping up with industry standards and regulations is important to ensure compliance with the law. Benchmarking can help you stay informed about changes to benefits laws and regulations.
ROI: Measuring the return on investment of your benefits program helps you make informed decisions about the benefits you offer and ensures that you are getting the most value for your investment.
Continuous improvement: Regular benchmarking allows you to track your progress and make changes to your benefits program over time to ensure that it remains competitive and effective.