Health and wellbeing programmes, and strategic benefits decisions, can only be as effective as the intelligence they are built on.
Alongside core metrics such as cost analysis information and health risk indicators, important insights will also be provided by benchmarking data.
There can be numerous reasons for organisations to compare their health and benefits provision with that of competitors – beyond a desire to simply keep up with the Joneses.
We examine the case for benchmarking and the competitive advantages it can deliver to your business.
Recruitment and retention
Recruiting high calibre employees is a priority for most businesses and, alongside their compensation package, a competitive benefits programme can be a key factor in enabling them to do so.
Perception is key. Indeed, the Willis Towers Watson Benefits Trends survey found that almost two-thirds (61 per cent) of employers recognised their benefits package improved their ability to attract and retain staff.
To gain a competitive advantage however, businesses need to know where they stand in their market. This becomes all the more important in industries where employers face intense competition for sought after skills and experience.
With this information, they can address gaps in provision and important benefit areas in which they are underperforming in relation to their peers.
Supporting the business case
For many years, benchmarking evidence has been called for by board level decisionmakers to vindicate spend on compensation and pension schemes. Such evidence is now increasingly being required to justify wider benefit plan design changes and to provide governance around benefit programmes.
Strategic planning that is backed by solid benchmarking data is more likely to be acted upon and garner corporate acceptance.
Benefits benchmarking can highlight where programmes are needlessly rich or excessively poor from a financial investment perspective.
Faced with a rising tide of premiums, benchmarking can reveal cost-saving opportunities or areas where benefits can be repositioned to deliver greater value. The strategic focus of provision that is out of sync with an organisation’s peers may be inappropriate and could well be proving wasted spend if failing to deliver for either its employees or on wider corporate objectives.
A catalyst for change
Benchmarking can act as a catalyst for change, a time to rethink a benefits programme and wider benefits strategy.
In addition to considering these in the context of the competition and industry sector, companies should also take account of cultural considerations, business risk factors and how benefits should complement wider corporate objectives.
Doing so might mean getting rid of legacy programmes that have failed to meet employee needs, for example, that have failed to engage the workforce or that have failed to deliver value investment or ROI.
A benchmarking review offers an opportunity to establish a benefits programmes that supports a roadmap towards a business’s strategic future.
Improve morale and performance
A competitive benefits package, evidenced through benchmarking, that targets employee needs can help workers feel looked after and feel more financially secure, giving them peace of mind during difficult times.
A package that incorporates health benefits, for example, can promote a healthier workforce, helping reduce incidents of sickness absence.
Where workers are happy with their employee benefits, they are more engaged. Willis Towers Watson research recently found that 49 per cent of employees whose benefit package meets their needs are highly engaged in the workplace. This contrasts with just 21 per cent of those whose benefits packages fails to meet their needs.
Higher levels of staff morale will invariably increase workplace productivity.