Recent research highlights a significant gap in UK companies’ benefit benchmarking practices.
- Over a quarter of employers are not comparing their employee benefits with others, potentially missing out.
- Only 40% of businesses benchmark benefits by sector, and even fewer consider location and company size.
- Most employers find benchmarking valuable for recruitment and retention strategies, according to the study.
- Benchmarking can help businesses achieve cost-effective spending on employee benefits.
Research from Towergate Employee Benefits reveals a notable gap in how UK companies approach the benchmarking of employee benefits, with 26% of employers failing to compare their offerings to those of other companies. This lack of benchmarking can result in firms missing out on opportunities to optimise their benefits package, crucial for attracting and retaining talent.
The study indicates a mere 40% of employers benchmark the benefits they provide by sector, while 37% do so by location and only 30% by company size. These figures suggest that a significant portion of businesses are not fully utilising benchmarking to make informed decisions about their benefits strategies, potentially putting them at a competitive disadvantage.
During discussions on the importance of benchmarking, Debra Clark, head of wellbeing at Towergate Employee Benefits, questioned whether the 74% of companies that engage in benchmarking are conducting thorough and professional analyses. “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 asked.
The research found that 58% of employers recognise the value of benchmarking in strengthening their recruitment and retention strategies. Employers are able to demonstrate how their benefits compare to others, ensuring their packages are competitive and appealing.
Another significant reason for benchmarking, mentioned by 46% of employers, is its role in guiding companies on how to allocate their benefits spending effectively, potentially resulting in financial savings and ensuring good value.
Benchmarking serves as a crucial tool for identifying competitive advantage. By understanding where their benefits excel or require improvement, companies can better position themselves in the market, offering packages that meet or exceed the standards of their competitors.
For the 13% of employers who intend to start benchmarking or those who need to enhance their current practices, engaging with professionals who possess the requisite data and insights could prove invaluable. This strategic approach allows companies to gain a comprehensive understanding of the market landscape, influencing their decisions on employee benefits.
In summary, effective benchmarking of benefits by UK companies could lead to improved recruitment, retention, and financial efficiency.
