It’s no secret that employee benefits are one of the best investments that businesses can make today. By investing in your employees’ overall well-being, it shows them that you care and that you value them.

This often leads to higher levels of productivity, and improved employee recruitment and retention.

Just like any other investment that your company makes, it’s important to track metrics so you can determine the return on investment (ROI) that your benefits plan provides. Below, we’ll discuss metrics that every employer should track to evaluate their benefits ROI.

ROI Percentage

A top-level benefits metric that every employer should track is ROI percentage. This provides a high-level look at the financial returns that your benefits package is generating relative to how much it costs.

Ultimately, what ROI percentage will tell you is whether your benefits package is giving your employees tangible value. It will also help you evaluate your benefits package in an objective way to other investments your company is making.

This metric is calculated by first determining what financial returns the benefits package has generated. This could come from savings in healthcare to increased employee productivity to a reduction in turnover.

Take this number and divide it by how much the benefits package costs, and convert that number to a percentage. Having this metric calculated will make it easier to understand how well your benefits package is optimized to your employee base, or whether anything needs to be tweaked.

Utilization Rate

No matter how much time you spend getting to know your employees and anticipating what they might want or need in an employee benefits package, the only way to know whether the program is a good fit for your staff is the utilization rate.

This will show you the rate at which your employees are using the benefits that you offer. A high utilization rate would signal that the package is likely tailored to their needs.

A low rate, meanwhile, could mean that your employees don’t like or need the benefits you offer, aren’t aware of the benefits that are available to them and/or have trouble accessing them.

The utilization rate can, and should, be calculated for each individual category of benefits as well as overall. By drilling down into medical care, mental health and general wellness, for instance, you can see exactly what parts of your benefits package work and what parts don’t.

Acceptance Rate

Benefits are a major factor in recruitment efforts. Analyzing the acceptance rate on job offers can help provide you insight into whether “outsiders” believe that your benefits package is appealing and competitive compared to other companies that are hiring.

This rate is calculated by comparing the total number of job offers you extend to the number of job offers that are accepted.

If you have a high acceptance rate, it could suggest that prospective employees believe that your benefits package is a solid offering, while a lower rate could suggest that you need to re-think the benefits you’re offering.

Employee Satisfaction

It’s also very important to understand whether your current employees are satisfied with the benefits you offer. Metrics such as utilization rate can provide some insight on that, but it’s also not always 100% accurate.

For instance, maybe some of your employees aren’t signed up for and/or using your benefits because they have a spouse whose company offers a more advantageous benefits package.

That’s why it’s a good idea to get a solid pulse on your employees’ satisfaction with your benefits by polling them. Ask for open and honest feedback from your employees, and remind them that you will use this feedback to help improve and optimize their benefits.

You can conduct anonymous polls, provide feedback forms, invite employees to meet with you and your HR team one-on-one and use other strategies to collect this information.

Employee Productivity

Are your benefits resulting in increased employee productivity? That is a great metric to track to evaluate your benefits ROI.

But, how do you track that? One way is to measure if there are any changes to employee absenteeism. If you are having fewer days missed, then it could be a good sign they are happy with your benefits and are using them to improve their wellness.

You should also look at whether employees are engaged with their work when they’re there and if they’re being productive. “Presenteeism” is a term that describes employees being present at work while not functioning to their full capacity, and it’s something that you should also try to measure.

Beckham Ellis Insurance Group Can Help You Evaluate Your Benefits ROI

Offering an employee benefits plan is only step one for companies. If you want to improve your employee retention and recruitment, you need to effectively evaluate your benefits plan.

Above are some of the metrics that every employer should track to evaluate their benefits ROI.

At Beckham Ellis Insurance Group, we can help you do this. Our experts can also help you design an employee benefits plan that is tailored to your current and prospective employees’ needs to keep them happy, healthy and productive.

If you’re located in the Georgia or South Carolina region, contact us today to learn more.