Understand How Your Employee Benefits Stack Up to the Competition
MARCH 2, 2021
Balancing the cost of benefits and the cost of employee turnover plagues many employers, as HR is tasked with the goal of attracting and retaining employees. For employers, employee benefits is the largest expenditure after payroll, and it plays a critical role in maintaining and growing a strong workforce. However, organizations must balance their need for competitive benefits with the costs of benefits.
Why Should an Employer Benchmark Its Benefits in 2021?
Prior to the COVID-19 pandemic, the low unemployment rate created challenges for employers looking to attract and keep top talent. Even though the pandemic increased the unemployment rate and perhaps gave employers the upper hand in recruiting and retaining talent, it remains important for employers to understand how they compare to their peers. Employers whose benefits are below par for their area or industry may have a difficult time attracting and retaining suitable employees — jeopardizing their opportunity to improve their overall business.
Offering benefits that are richer than other organizations’ may appear to help an employer recruit and retain its workforce. However, it is actually a clear indication that the organization is spending more than necessary on its benefits. These employers would be better off aligning their benefits with those of industry and regional peers, and investing the excess benefits budget elsewhere in the company.
Consider this example of an employer with 700 employees that had not made changes to its benefits offerings in nine years. The employer participated in the USI Benefits Benchmarking Study and received a Plan Performance Assessment that revealed gaps in coverage and identified areas where the company’s benefits far surpassed those of peer organizations. The employer worked with USI to implement changes and trim the benefits to a more competitive level, saving the organization $342,000.
See How Your Benefits Measure Up — Then Set Your Strategy
Each year, USI Insurance Services performs an annual Benefits Benchmarking Study — the largest survey of its kind — where it collects benefits data from employers. Using that data, USI’s team of actuaries calculates the Actuarial Value (AV) of the benefits and creates a proprietary benchmarking tool that publishes a custom Plan Performance Assessment for each participating employer. The tool features 340 “data cuts” that provide insights based on employer size, geography (regional-, state- and city-level), and industry. In 2020, more than 6,000 employers joined the study.
Each employer that participates receives a complimentary Plan Performance Assessment detailing how their organization’s benefits compare to those of peer organizations of a similar size, industry, and geography. In addition to benchmarking, the Plan Performance Assessment also offers solutions that may improve the health of the organization’s population, reduce benefits spending, enhance benefits communications and increase overall plan competitiveness.
Participate in the 2021 USI Benefits Benchmarking Study
This year’s study will include new topics to help companies learn what peer organizations are doing in terms of COVID-19 protocols and work from home policies as well as communications strategies.
All employers interested in participating in the 2021 USI Benefits Benchmarking Study should visit the study online and complete the survey before it closes on March 23, 2021. It is recommended that participants have their benefits information readily available while completing the questionnaire.
Customized Plan Performance Assessments will be created from the benchmarking tool and provided to participating employers in May 2021.
Contact your local USI benefits consultant to learn more about our individualized benchmarking analysis and other strategies to improve plan design and participation and manage costs.