Towergate Employee Benefits found that 26 percent of UK employers are missing out on potential competitive advantages by not benchmarking the benefits they offer.
As the employee benefits market expands, it becomes harder for organisations to stand out. With almost six in ten employees willing to leave their current job if offered better benefits elsewhere, a competitive package is vital to retain top talent. Benchmarking helps employers identify where their benefits packages excel and where improvements are necessary.
New research shows that only 40 percent of companies benchmark by sector, 37 percent by location, and 30 percent by company size – a sign that many companies lack a structured approach to understanding how their benefits packages compare within the market.
Debra Clark, Head of Wellbeing at Towergate Employee Benefits, stressed the importance of robust benchmarking. “Companies that are not benchmarking their benefits are really missing out. But the 74 percent who do benchmark would probably do well to take a second look at the comparisons in their analysis – is it a bit of a ‘finger-in-the-air’ and a quick trawl of the search engines, or is it professional research provided by experts in employee benefits?” she says.
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The Strategic Value of Benchmarking Employee Benefits
The survey explored why employers find benchmarking valuable. A majority, at 58 percent, view benchmarking as crucial for recruitment and retention, allowing them to position their health and wellbeing packages competitively. Employers who conduct benchmarking can inform employees on how their benefits measure up against other organisations, which can improve both retention of current employees and appeal to prospective hires.
Another 46 percent of employers stated that benchmarking helps them allocate their benefits spending more strategically. By comparing their offerings to the market, these companies can identify areas where they may overspend or underspend, leading to potential cost savings while ensuring they offer value. Additionally, 45 percent of employers reported that benchmarking informs them of the benefits that should be prioritised or added to attract and retain talent.
Clark added, “Benchmarking is vital for recruitment and retention, and it is not about spending more money, it is about cost-effectiveness and spending smart.”
