How to Evaluate and Improve Your Current Employee Benefits Program
Are your employees satisfied with their benefits?
Evaluating your current employee benefits program can reveal gaps and opportunities for improvement.
A well-structured benefits package is crucial for retaining top talent and maintaining employee satisfaction.
This article will guide you through evaluating and improving your benefits program to meet the evolving needs of your workforce.
Discover actionable insights and practical steps to ensure your employees feel valued and supported.
Why Do You Need an Effective Employee Benefits Plan?
Employee benefits come in all shapes and sizes, some more common than others. Here you can see some examples of traditional benefits:
An effective employee benefits program is essential for attracting and retaining top talent. In today's competitive market, benefits play a crucial role in an employee's decision to join or stay with a company. In fact, 60% of job seekers say benefits are a major factor when considering whether to accept a job offer. You must prioritize creating a benefits program that meets the needs of your workforce and aligns with your business goals.
Employees value comprehensive benefits that support their health, financial stability, and work-life balance. Offering robust health insurance plans, retirement plans, and wellness programs can significantly impact employee satisfaction and productivity. For instance, 88% of employees rate health-related benefits as very important, and 81% rate retirement benefits as very important.
Investing in a strong benefits program shows you care about your employees' well-being. This can lead to increased loyalty and engagement, as employees who feel valued are more likely to perform better and contribute to the company's success. A high level of employee engagement can reduce absenteeism by as much as 81%. A well-structured benefits package can also enhance your company's reputation and make it easier to attract high-quality candidates.
Regularly reviewing and updating your benefits program ensures it remains competitive and relevant. Your employees' needs may change over time, and staying attuned to these changes helps you maintain a program that continues to provide value. This proactive approach can prevent issues related to employee dissatisfaction and disengagement.
5 Ways to Evaluate and Improve your Employee Benefits Program
So, now you know why employee benefits are important – and which of them matter most. Still, you need to build the right program for your own company.
That’s exactly what we’ll discuss below.
1) Conduct Employee Surveys and Feedback Sessions
Employee benefits play a critical role in job satisfaction and retention. In one study, 71% of employees who said they were satisfied with their benefits said they were very loyal to their company.
Improving your benefits program requires you to understand employees' needs and preferences. Collecting direct feedback allows you to tailor your offerings to meet those needs better. Here’s how to get started:
Segment your audience: Identify different employee demographics within your organization. Tailor survey questions to address the unique needs of each group, such as new hires, long-term employees, and those with families. This ensures that the feedback is comprehensive and represents all voices within your company.
Promote participation: Communicate the importance of the survey through multiple channels. Explain how the feedback will be used to enhance the benefits program. Consider incentives for completing the survey to increase participation rates.
Design the survey carefully: Develop clear and specific questions about the benefits you offer. Include open-ended questions to capture detailed insights and unique perspectives. Aim to understand not only satisfaction levels but also specific pain points and areas for improvement.
After the survey:
Analyze the data meticulously: Use data analysis tools to identify trends and common themes in the responses. Pay special attention to recurring issues and highly rated suggestions. Prioritize these insights when planning changes to the benefits program.
Implement changes transparently: Share the survey results with your employees and outline the steps you will take to address their feedback. Transparency in this process builds trust and shows that you value their input. Regularly update them on the progress of these changes.
Insider Tip:
We recommend conducting focus groups after the initial survey. The point is to get a deeper exploration of specific issues identified in the survey and provide a platform for employees to discuss their ideas in more detail. This leads to more targeted and effective improvements in your benefits program.
The graphic below shows some tips for conducting a better employee survey:
2) Benchmark Against Industry Standards
Understanding how your employee benefits compare to industry standards significantly enhances your program's attractiveness. Benchmarking allows you to identify gaps, stay competitive, and address your employees' evolving needs.
To benchmark your benefits program, start by identifying relevant benchmarks. Select industry standards and best practices for companies of similar size, sector, and region. Look at comprehensive reports from reputable sources like industry associations and consulting firms. This ensures that your comparisons are relevant and actionable.
The next step is to gather detailed data. Collect information on the types of benefits offered, the coverage levels, and the costs associated with these benefits. Focus on key areas such as medical insurance, retirement plans, dental insurance, paid time off, and wellness programs. Make sure your data is up-to-date to reflect current trends and practices. The graphic below shows some desired benefits and how many companies offer them:
Then, analyze your current offerings. Compare your benefits program to the benchmark data collected. Identify areas where your program excels and where it falls short. Pay close attention to benefits that are highly valued by employees but may be lacking in your current offerings.
Discuss your findings with key stakeholders, including HR professionals, managers, and employee representatives. Their insights can help contextualize the data and prioritize which areas to address first. Collaboration ensures that the proposed changes align with organizational goals and employee needs.
Finally, it’s time to implement strategic changes. Based on your analysis and stakeholder input, make informed adjustments to your benefits program. Focus on enhancing the most impactful benefits while maintaining cost-effectiveness. Communicate these changes clearly to your employees to highlight your commitment to their well-being.
There are many options to consider. For example, according to the 2022 SHRM Employee Benefits Survey, 93% of organizations offer telemedicine or telehealth services, reflecting a 20 percentage point increase since 2019. Additionally, 1 in 5 employers provide mental health days beyond regular sick leave, indicating a growing emphasis on mental health support.
3) Analyze Benefits Utilization Rates
Understanding how your employees use their benefits is crucial for maximizing the value of your program. Analyzing utilization rates allows you to identify which benefits are most valued and which may need adjustment or enhancement. Here’s how to analyze and leverage this data:
Collect comprehensive data: Gather data on the usage rates of each benefit offered. This includes healthcare services, wellness programs, retirement plans, and any other perks. Segment the data by employee demographics to identify trends among different groups.
Use data analysis tools: Employ advanced data analysis tools to examine the utilization patterns. Look for trends, such as high usage of certain benefits and underutilization of others. For example, adoption assistance benefits have a utilization rate of about 1%, which aligns with the 2-4% adoption rate among U.S. adults. Identify potential reasons behind these patterns, such as accessibility issues or lack of awareness.
Engage employees for insights: Conduct focus groups or one-on-one interviews to understand the reasons behind the usage rates. Ask employees about their experiences with the benefits and any barriers they face in accessing them. This qualitative data complements your quantitative analysis.
Evaluate cost-effectiveness: Assess the cost-effectiveness of each benefit based on its utilization rate. Highly utilized benefits should be maintained or enhanced, while those with low usage may need reevaluation. Consider reallocating resources to more popular benefits to maximize the program’s overall impact.
Communicate findings and changes: Share your analysis and any changes with your employees. Explain how the data influenced your decisions and how the changes will better meet their needs. Transparency in this process builds trust and encourages future participation in feedback initiatives.
Insider Tip:
We advise implementing a benefits utilization dashboard accessible to HR and leadership teams. This real-time tool can provide ongoing insights into benefit usage patterns and help make timely adjustments. Keeping the data dynamic and visible ensures you stay responsive to your employees’ needs.
4) Review and Adjust Cost-Effectiveness
It’s important to be aware of how much you’re spending on employee benefits, and whether or not this is sustainable. See the graphic below for an example of how benefits costs might break down.
Ensuring the cost-effectiveness of your benefits program is key for maintaining financial health while keeping employees satisfied. Reviewing and adjusting cost-effectiveness helps you allocate resources efficiently and enhance the overall value of the benefits provided.
To effectively review and adjust cost-effectiveness, a good first step is to perform a detailed cost analysis. Break down expenses into healthcare, retirement contributions, and wellness initiatives. Compare these costs against industry benchmarks to identify any discrepancies or opportunities for savings.
Determine the perceived value of each benefit to your employees. Use surveys and feedback sessions to gauge which benefits are most important to them. This is important because 55% of employees would consider moving elsewhere for a more competitive benefits package. This helps identify high-cost benefits that may not be as valued, allowing for the potential reallocation of funds.
Next, cross-reference the utilization data of each benefit with its associated costs. Benefits that are rarely used but incur high costs might need reconsideration. Conversely, heavily utilized benefits should be optimized to ensure they remain cost-effective while meeting employees' needs.
Investigate alternative providers or plans that offer similar benefits at a lower cost. Consider negotiating with current vendors for better rates or enhanced services. This can help reduce costs without compromising on the quality of benefits.
The final stage is to implement and monitor changes. After making adjustments, closely monitor the financial and employee satisfaction impacts. Regularly review the cost-effectiveness of the benefits to ensure that the changes are yielding the desired outcomes. Based on this ongoing evaluation, make further adjustments as needed.
5) Engage with Benefits Consultants and Experts
Engaging with benefits consultants and experts enhances your employee benefits program. Their specialized knowledge helps identify gaps, optimize offerings, and comply with regulations. In the video below, you can see the impact a benefits consultant can have on your program.
Collaborating with these professionals brings a fresh perspective and valuable insights into your benefits strategy. Here’s how to approach this engagement:
Identify your needs: Determine the specific areas where you need expert guidance. This could include compliance, cost management, or enhancing specific benefits. Understanding your needs ensures you select the right consultant for your goals.
Research and select experts: Look for consultants with proven experience in your industry. Check their credentials, client reviews, and case studies. Engaging an employee benefits consultant can lead to improved satisfaction and retention. Selecting the right expert is crucial for getting tailored and effective advice.
Set clear objectives: Define what you aim to achieve from the consultancy engagement. Whether it’s improving employee satisfaction, reducing costs, or expanding benefit options, clear objectives guide the consultancy process. This ensures alignment between your organization’s goals and the consultant’s approach.
Collaborate closely: Work closely with the consultants to provide them with comprehensive information about your current benefits program. This includes utilization data, employee feedback, and cost details. Open communication enables them to provide more accurate and relevant recommendations.
Implement recommendations: After receiving the consultant’s report, prioritize and implement their recommendations. Focus on changes that offer the most significant impact on employee satisfaction and program efficiency. Regularly review the outcomes to ensure the implemented changes meet your objectives.
Insider Tip:
We recommend scheduling quarterly check-ins with your benefits consultant. These regular interactions keep your benefits strategy agile and responsive to changing needs and trends. This approach helps us continually refine our benefits program and stay ahead in providing exceptional employee benefits.
Improve Your Business with Better Employee Benefits
Employee dissatisfaction with benefits can harm retention and morale. Evaluating your program reveals these issues early.
Addressing gaps and improving offerings shows employees you value them.
Implement the solutions we provided to transform your benefits program, leading to higher satisfaction, retention, and productivity.
Don’t let your benefits program become outdated. Regularly review and enhance it to meet evolving needs.
Your proactive approach will ensure your employees feel valued and supported.
FAQ
What is an employee benefits program? An employee benefits program is a set of perks and compensations provided by employers, beyond salaries, to support employees' well-being, financial security, and work-life balance. Common benefits include health insurance, retirement plans, gym memberships, paid time off, and even pet insurance.
What benefits do employees value most in 2025? In 2025, employees highly value benefits like comprehensive health insurance, mental health support, flexible work options, retirement savings plans, and professional development opportunities.
What can management do to increase the value of benefits provided to employees? Management can increase the value of benefits by tailoring offerings to employee needs through regular feedback, improving communication about available perks, and focusing on high-impact benefits like wellness programs and flexible schedules.
How can you showcase employee benefits? You can showcase employee benefits by highlighting them during recruitment, including detailed information on job postings and career pages, and promoting them in internal communications and onboarding materials.
Why should you prioritize employee benefits? Prioritizing employee benefits boosts job satisfaction, retention, and engagement, while also growing your company's reputation as an employer of choice, which makes it easier to attract top talent.
