The Data Doesn't Lie: Why Measuring Your Employee Benefits Program is Crucial
In today's competitive talent landscape, employee benefits are no longer a "nice-to-have" but a "must-have." They play a vital role in attracting, retaining, and engaging top talent. Yet, a recent global study by Ben revealed a startling statistic: 62% of companies don't measure the success of their benefits programs. This begs the question: if we're investing so heavily in benefits, why aren't we tracking their impact? Failing to measure can have significant consequences for your business.
The High Cost of Not Measuring
Think about it. Without understanding how your benefits are being used and valued, you're essentially throwing money at the problem and hoping for the best. This can lead to:
Wasted Resources
You might be investing in perks that your people don't value or use. Imagine spending a significant portion of your budget on a gym membership program when your people are more interested in financial education resources. Without that information, you're just guessing.
Difficulty Attracting and Retaining Talent
Employers need to understand that a lacklustre benefits package won't impress top candidates. In a competitive market, your competitors with evidence-based, people-centric benefits programs will have a significant edge.
Lack of Data-Driven Decision Making
How can you justify changes to your employee benefits program if you don't have insights to back it up? Without insights into benefits usage, enrolment rates, and staff feedback, you're making decisions based on gut feeling, not facts.
Missed Opportunities for Improvement
Failing to measure prevents you from identifying areas where your benefits package could be improved. You might be missing out on opportunities to better meet your people's needs and align your benefits with organizational goals.
The "Set It and Forget It" Trap
Many HR professionals are so busy managing day-to-day workplace tasks that they fall into the trap of "set it and forget it" when it comes to employee benefits. They might inherit an existing package and make minor tweaks without ever taking a step back to assess the overall effectiveness. This can lead to a disconnect between what the company thinks employees want and what they actually value.
The Engagement Puzzle
Employee engagement is a top priority for HR teams, and benefits play a crucial role in driving engagement. However, Ben's study reveals a concerning trend: 21% of companies report "low" employee appreciation of their benefits offerings, and 51% report only "average" appreciation. This disconnect between investment and appreciation highlights the need for a more strategic approach to benefits management.
The Wrong Way vs. The Right Way
Ben's research also sheds light on common pitfalls in benefits management:
Infrequent Communication: Communicating benefits only once a year is a recipe for disaster. People will forget what's available to them, leading to low utilization and appreciation. In fact, the study showed that 37% of companies only communicate their benefits once a year.
Lack of Flexibility: A "one-size-fits-all" approach to employee benefits is outdated. People want choice and flexibility to customize their benefits packages to meet their individual needs. 49% of companies have a "paternalistic" approach, meaning they don't offer this flexibility.
Disjointed Global Programs: Managing different benefits programs for different locations creates administrative headaches and inconsistencies. 70% of global companies surveyed don't currently have a unified benefits solution for all locations.
Ignoring Insights: Failing to measure the success of your benefits program is like driving a car blindfolded. You're making decisions without any real understanding of the impact. As we've discussed, 62% of companies fall into this trap.
Absence of Strategy: A successful benefits program requires a clear strategy with defined goals and metrics. Simply "winging it" will not yield the desired results. The study revealed that only 17% of companies have a global benefits strategy in place.
So, what does the right way look like?
Frequent, Creative Communication: Keep employees informed and engaged with regular, targeted communications about their benefits. Use a variety of channels, such as email, intranet, and even short videos, to make benefits information easily accessible and engaging.
Dan Mills Creative Director ilumiti
"Creating an annual communications plan is a game-changer. It allows you to map out key messages, align them with important benefits events like health insurance renewals, and keep employees engaged throughout the year.
Think of it as your benefits 'storytelling' calendar. It's not just about pushing information; it's about crafting a narrative that resonates and sticks. Plus, it gives you the space to be creative and really showcase the value of your benefits package.”
Flexible, Personalized Options: Offer a range of flexible employee benefits options to cater to the diverse needs of your workforce. Empower employees to choose the benefits that are most important to them.
Unified Global Programs: Streamline your global employee benefits programs by implementing a single, unified platform. This will simplify administration and ensure consistency across all locations.
Intelligence Approach: Track key metrics, such as benefits utilization, enrolment rates, and employee feedback, to measure the effectiveness of your program. Use metrics to identify areas for improvement and make informed decisions about future investments.
Strategic Planning: Develop a comprehensive benefits strategy that aligns with your overall business goals and employee needs. Define clear objectives and metrics to track progress and demonstrate Return On Investment (ROI).
Measuring Success: A Tailored Approach
Measuring the success of your benefits package will vary depending on your company's specific goals and priorities. However, some key areas to consider include:
Benchmarking: Compare your benefits package to your competitors and industry standards to ensure you're offering a competitive package.
Employee Feedback: Regularly solicit feedback from your employees about their benefits. Use surveys, focus groups, and one-on-one conversations to understand their needs and preferences.
Business Goals: Ensure your benefits program aligns with your overall business objectives. For example, if your goal is to improve retention, track metrics such as turnover rates and tenure.
David Pugh Managing Partner ilumiti
“Benefits data isn't just about spreadsheets and numbers; it's about understanding the impact of your investments on your people and, ultimately, your business.
By aligning your benefits strategy with your overarching business goals, you can create a powerful tool for attracting and retaining top talent, boosting employee engagement, and driving sustainable growth. It's about seeing the bigger picture and using data to make informed, strategic decisions that benefit both your employees and your bottom line.”
Continuous Improvement of Employee Benefits Through Analysis
This isn't a one-time exercise; it's an ongoing process. To truly maximize the impact of your employee benefits program, and ensure it aligns with overall employment strategies, you need to establish systems for continuous improvement. This involves setting up regular feedback loops and conducting an annual review and report, ensuring your benefits package complements payroll and salary offerings effectively.
Regular Feedback Loops:
Think of feedback loops as your pulse check on employee sentiment. They provide ongoing insights into how employees are experiencing your benefits program, and how it integrates with their overall compensation, which allows employers to continue learning how best to support their people. Here are a few ways to implement regular feedback loops:
Pulse Surveys: Short, frequent surveys can gauge employee satisfaction with specific benefits or identify emerging needs. Keep the surveys concise and focused to encourage participation.
Informal Check-ins: Encourage managers to have regular conversations with their team members about benefits. These informal check-ins can provide valuable insights and uncover issues within the workforce that might not surface in surveys.
Suggestion Boxes (Digital or Physical): Provide a platform for people to submit suggestions for improving the benefits program. This can be anonymous or attributed, depending on your company culture.
Focus Groups: Conduct periodic focus groups with a representative sample of employees to delve deeper into their thoughts and feelings about benefits. Focus groups can provide rich qualitative information and help your learning as to the "why" behind the numbers.
Annual Review and Report:
In addition to regular feedback, a comprehensive annual review is essential for evaluating the overall effectiveness of your benefits program. This review should involve:
Analysis: Analyze the information collected from your feedback loops, benefits platform, and other sources. Look for trends, patterns, and areas of improvement. For example, are certain benefits underutilized? Are there any gaps in coverage? Is there scope in the budget?
Benchmarking: Compare your benefits program to industry benchmarks and competitor offerings. This will help you identify areas where you excel and areas where you need to catch up.
Stakeholder Input: Gather input from key stakeholders, including HR, finance, and senior leadership. Discuss the results and brainstorm potential improvements.
Report Creation: Create a comprehensive report summarizing the findings of the annual review. This report should include key metrics, insights, and recommendations for future improvements. Share this report with key stakeholders and use it to inform your benefits strategy for the coming year.
By establishing these regular feedback loops and conducting a thorough annual review, employers can ensure that their employee benefits package is continuously evolving to meet the changing needs of your workforce and support your overall business goals. This approach will not only help you optimize your benefits spend but also demonstrate the value of your program to senior leadership.
The Power of Technology
Technology plays a crucial role in modern benefits management. Platforms like Ben provide a wealth of analytics that can help you measure the effectiveness of your program.
In today's digital age, a paper-based benefits package simply won't cut it. Employees expect easy access to information and resources, flexible benefits, and technology can help you deliver a seamless and engaging benefits experience.
The Bottom Line: Measure Up or Fall Behind
In conclusion, measuring the success of your employee benefits package is not just a good idea—it's essential for staying competitive in today's talent market. By embracing a data-driven approach, you can ensure that your benefits investments are aligned with your business goals and employee needs. Failing to measure means failing to understand the true impact of your benefits spend, potentially wasting resources and missing opportunities to attract and retain top talent. Don't let your benefits program become a guessing game. Start measuring today and unlock the full potential of your employee benefits.
FAQ's
Can benefits data be used to identify company cost savings opportunities?
Definitely. Looking at your benefits data can show you where you're spending money unnecessarily. For example, if you track how many employees are using salary sacrifice for their pension plans, you can see if encouraging more people to do this would save the company money on National Insurance. Also, if certain benefits aren't popular, you can shift that money to things employees actually want, saving costs overall.
Natasha Newby Employee Benefits Director ilumiti
How often should employee benefits data be reviewed and updated?
Good practice dictates that employee benefits data should be reviewed annually. This review could strategically align with key events like health insurance contract renewals, allowing for adjustments based on the latest utilization data and cost projections. Additionally, reviewing data after specific campaigns, such as the introduction of a financial education program, provides valuable insights into the campaign's effectiveness and informs future benefit strategies.
Sean Phillips Strategic Partnerships Director ilumiti