Complete Guide To Employee Benefits Benchmarking in the UK 2024

Why Benchmark Your Benefits?

There are a number of important reasons to carry out benefits benchmarking, both for you and your team:

See How You Stack Up Against Competitors

The most obvious benefit of benchmarking your employee benefits is that you can compare what you offer against your competitors. You can find any gaps in your package, or get confirmation that what you offer is pipping other businesses to the post. It can also show if you’re offering too much, or spending money on benefits that have become less popular.

Having this insight will help you to make relevant adjustments, which in turn could help to improve your offering. Or, you may find a unique selling point to shout about when recruiting.

Find Out What’s Working (And What’s Not)

Benchmarking forces you to review your existing benefits and look at their effectiveness. It’s not just about offering what your competitors do, it’s about providing a rewards package that employees really value.

You might be paying for a Corporate Health Cash Plan, but no one understands the benefits available to them. Or, you might have a Workplace Pension, but are missing out on big savings as a result of not incorporating salary sacrifice (often referred to as salary exchange).

You’ll see if your employees are actually using the benefits you provide. If they aren’t, you can then dig deeper:

• Why aren’t they using it?
• Do you communicate your benefits clearly and consistently?
• Do they actually want the benefit? Or would they prefer something else? (For example, 60% of employees told us they’d prefer larger pension contributions over other benefits)

Spot Ways To Save Money

Benchmarking can also help you to save money. By understanding the level of benefit competitors provide, you can adjust yours to meet the needs of your workforce. There are tweaks you can make to save money and still offer a competitive package. For example, we’ve seen a higher demand for voluntary benefits in 2024, as it’s a simple way to expand a benefits offering on a tight budget.

Boost Employee Performance And Morale

Benefits show your team you appreciate them by offering something valuable – beyond just their paycheck. It’s a tangible way to demonstrate that you care about more than just their output at work.

Happy employees are more productive, which has a flywheel effect for your business performance. In fact, a study by Oxford University found that happy staff are 13% more productive than unhappy ones.

Attract And Retain Top Talent

If you’re investing in employee benefits, they need to align with what employees actually want and value. With 71% of employees ready to leave jobs for better pay and benefits, offering perks that your team really wants is the secret to positive engagement and better work performance.

Our 2024 Employee Benefits And Workplace Satisfaction Survey found a disparity between what employees want and what employers offer: One in five employees want insurance to protect themselves and their loved ones, but our latest benchmarking report found that fewer employers are offering these core rewards, especially Group Life Insurance, which has seen a 24% drop in the number of businesses providing it from 2023.

If you were looking for a new role, out of the two example companies below, who would you choose to work for?

Both companies offer the same salary, but one offers much better benefits. As an employee, Company B is more appealing than Company A, as it offers a much more comprehensive rewards package.

By benchmarking your employee benefits, you can make sure that you remain a competitive player in your industry when it comes to retaining and attracting top talent.

You don’t need a big budget to make a big impact. In fact, flexibility matters most to employees, and it’s something that’s free to implement for the most part.

Your business is unique, so it’s best to get advice from an expert (like our team at Drewberry) who’ll be able to advise which benefits are the best use of your budget.

Nadeem Farid
Head Of Health & Wellbeing Benefits

Stay Ahead Of The Latest Trends

As an employer, knowing what’s going on in your industry can help with employee retention and hiring. If you adapt to new developments, you’ve got a chance to stay ahead of the competition.

You may find that benchmarking identifies patterns within the market: different industries might offer different benefits, depending on aspects like location and employee demographics. This information can help to add new benefits in line with industry demands.

What To Consider Before Benchmarking

There are a few things you need to weigh up before benchmarking employee benefits:

Resources Available

Gathering the benefits data to benchmark can take time, depending on the size of your business, the sector, and how many competitors you have. Check if you have the time and resources for the task, or whether you’re better off outsourcing your benchmarking.

Location Of Your Business And Competitors

The location of your business and your competitors can impact your data. For example, if you’re in North England and you’re benchmarking companies in London, the data isn’t reliable.

Company Size

Discrepancies between what a small business and a large one can afford are common. Larger companies tend to have bigger budgets, so if you’re a small startup, you need to ensure you’re doing a fair comparison.

Industry

Your sector will influence how you benchmark your benefits. Those in niche industries will have a much smaller dataset for comparison. In this case, you’d need to broaden your benchmarking data, while still ensuring it’s relevant to your business.

41% of employees said that company benefits are the top priority when choosing a potential new employer. If you want the best talent, your benefits package needs to outshine your competitors.

Jamie-Lee Grant
Employee Benefits Operations Manager

How To Benchmark Your Employee Benefits

If you’re embarking on benchmarking by yourself, here’s how it works in six steps.

1. Set Clear Goals

Decide what you actually want to measure. There are various areas within the employee benefits landscape – some of which might be more important to your business than others.

For example, if your priority is to lower business costs, you’ll want to see how much money your competitors are spending on their benefits.

2. Involve Your Employees

Getting your employees involved with the benchmarking process will make things easier. Try sending an internal survey about their benefits and satisfaction. You can then use these insights to make informed changes to your benefits package.

3. Identify Your Competitors

One of the biggest pillars of benchmarking is to know who your competitors are. Make a note of the competitors that are already on your radar, and carry out research to find the ones you don’t. You can do this by:

• Searching online for similar companies
• Asking your business network, e.g. your suppliers
• Conducting market research
• Utilising social media
• Doing keyword research.

4. Gather Data And Compare Employee Benefits

Once you’ve found out who your competitors are, how do you discover what benefits they offer? Try checking out their job ads on websites like LinkedIn, Indeed, and Glassdoor. You can also read their website, and speak to industry experts about their perks.

5. Start The Comparison

Keep your benchmarking goals in mind during this step. For cost-related goals, you’ll want to find out how much competitors spend on benefits. If it’s employee engagement you’re keeping an eye on, it’s worth seeing how employers communicate their benefits.

6. Implement Changes

Now it’s time to put the employee benefits benchmarking data to good use. Do you need to add a new benefit? Can you reduce the amount you offer for Group Life Insurance? Whatever the outcome, benchmarking will enable you to make data-led decisions about how to improve your employee benefits.

7. Communicate Changes

If you do make changes to your benefits, it’s vital that you communicate these to your employees. Benchmarking can only go some way to making your rewards package effective. You also need to have a clear and consistent communication plan. You could offer everything your competitors do and more, but it means nothing if employees don’t know about it!

The Benchmarking Process: Conclusion

If all this sounds like a lot of work, that’s because it is! Setting up and maintaining your employee benefits requires a decent bit of admin, so it quickly becomes time consuming. We do the heavy lifting for you, giving you more time to focus on what matters.

We live and breathe employee benefits, doing this day in-day out for businesses just like yours. We look at the big picture, getting to know your unique workforce and benchmarking your offering against competitors.

We also have access to competitive rates for group insurance products. So give us a call on 02074425880 or email help@drewberry.co.uk to get started.

Our latest survey found that only 18% of employees received information about their benefits more than once a year. This could go someway to explaining why 25% said they were unsatisfied with their benefits.

Having a Total Reward strategy can help you present the full value of your employer offering to your team.

Nick Nelms
Senior Consultant, Employee Benefits

Get Expert Help With Your Benchmarking

Now you know: employee benefits benchmarking is the best way to ensure your offering is competitive, and meets the needs of your people. Despite this, our latest benchmarking report found that nearly 40% of employers don’t do it.

If you’re one of them, you could be missing out on important opportunities, such as controlling costs, attracting and retaining top talent, and most importantly, a happier and more engaged workforce.

It’s not a quick task though, and that’s where we come in. As part of our benchmarking service, our team of experts will:

• Review your existing benefits and compare them against your competitors
• Analyse results and identify potential areas for review and improvement
• Provide an overview of the cost for making any changes that have been identified.

Read more about benchmarking service and the different levels available.

Get The 2024 Report

Buy access to our full benchmarking report, providing employee benefits data from over 600 UK companies. From the mandatory to the luxury it’s the most in-depth report on employee benefits you’ll find.

Whether you want our experts to conduct a full analysis of your benefits, or you’d like access to our benchmarking report, don’t hesitate to get in touch. To find out more, drop us a call on 02074425880 or email help@drewberry.co.uk.

Why Speak to Us?

We started Drewberry™ because we were tired of being treated like a number.

We all deserve a first class service when it comes to things as important as protecting our health and our finances. Below are just a few reasons why it makes sense to talk to us.

• We are award winning 🏆 independent insurance advisers who work with all the leading UK insurers
• You’ll speak to a dedicated expert from start to finish
• We are very proud of the 3900 and growing independent client reviews rating us at 4.92 / 5
• We are authorised and regulated by the Financial Conduct Authority. You can find us on the financial services register here 🧐
• Claims support when you need it most.