Benchmarking Your Employee Benefits
Benchmarking employee benefits compares how employers are responding to continually rising health care costs. Offering a competitive and cost-effective benefits plan is a serious business challenge. It is important that organizations monitor and tend to their benefits to recruit and retain talent with the job market evolving from employer-driven to candidate-driven.
How do your benefits measure up to that of other businesses? How is your current broker assisting you with this and keeping up with where you stand against others in your industry? At Healthcare Consultants, Inc., brokers understand how important it is to make educated plan design decisions and to help balance cost control and value.
Ensuring your employee package is competitive and valuable is vital for your recruiting and retention needs. By benchmarking your benefits, you will know how your offerings stack up to other employers in your industry. You can also gain insight on whether it is economical or not. You will be able to study best practices, innovative ideas and effective operating procedures that lead to superior performance.
The Importance of Benchmarking Benefits
An SHRM survey on job satisfaction and engagement showed 92% of employees look for benefits as a requirement for overall job satisfaction. According to the survey, 29% of employees stated that seeking benefits was a top reason for leaving a current position and 32% of employees who stay with their current employer cited that their benefits package was their main reason.
With health care benefit costs rising, employers are strategically analyzing how other companies have their plans structured, in order to improve and cut costs. Benchmarking will show you what your weaknesses are, where and how to maintain your strengths, where you can improve, along with strategies, and perspective. Doing so can help arm you with information when making important benefit plan decisions.
What can be Benchmarked?
What aspects of your benefits are important to your business’s success? Anything can be benchmarked, but common factors to consider would be total costs, cost-sharing measures, plan design, voluntary offerings, and workers’ compensation, and paid leave. With employee benefits being the second largest expense, after compensation, employers are doing what they can to stay above the cost increases in healthcare.
It all boils down to what is important to the needs of your business and your employees. Looking at your own health claims from previous years will help give you a better understanding of where your employees are spending their money and how they are utilizing their benefits. Once the area of spending is identified, employers can make changes to accommodate needs.
Projected trends for improving healthcare benefit costs, according to the National Business Group on Health, are consumer-directed health plans, offering virtual care services, management of specialty drug spending, improvement of drug rebates with PBMs, co-pay assistance programs, among other trends that may help in improving health care utilization and cost.
The Kaiser Family Foundation and the Health Research & Educational Trust conducted a survey to examine employer-sponsored health benefit trends. Their survey found that premiums rose 5% compared to the previous year with an average family premium of $20,576 and the single coverage premium of $7,188.
In 2019, 44% of covered workers were enrolled in a preferred provider organization (PPO), 30% of workers were enrolled in a high-deductible plan with a savings option (HDHP/SO), and 61% of covered workers were enrolled in a self-funded plan.
Among those employers offering medical insurance benefits, 65% of large businesses and 41% of small companies provided employees the opportunity to take a health risk assessment. Half of those large businesses also provided an incentive for employees to do so.
Benefits by Industry
In March 2020, about 94% of employees in management, business, and financial occupations had access to medical care benefits, according to the US Bureau of Labor Statistics. The percentages were lower for other industries: 77% in installation, maintenance, and repair jobs; 76% in office and administrative support positions; and 53% in sales and related occupations.
The percentage of employees with paid sick leave benefits ranged from 93% in financial activities and information to 52% of employees in leisure and hospitality. The percentages also varied by size of business, with 88% of those working for a large business of 500 or more employees having access to paid sick leave and 67% of employees of small businesses with less than 100 employees.
Paid vacation days were offered to 97% of management, business, and financial employees, but only 24 percent of educational services employees and 67% in health care and social assistance had access to the vacation days through consolidated leave plans.
Do You Know What Benefits Businesses in Your Industry Offer?
The key to staying ahead of the job market and leading the competition against other employers in the battle to find and keep talent is keeping up with benefit trends. Contact a Healthcare Consultants, Inc agent now to learn more about what businesses in your industry are doing and how you can improve your compensation strategy.