Employers know that benefits investments are large, complicated, and costly. In fact, 30% of total rewards comes from benefits, rather than wages/salary (whether employees realize that, however, is a different story). Companies spend, on average, more than $11 per hour—per employee—on benefits.
The truth is, using benefits as a tool for recruitment and retention is just one piece of the employee journey. HR leaders need to consider the role benefits play in each stage of that journey:
- Joining the company
- Finding career growth
- Learning to lead
- Maintaining a healthy household
- Succeeding financially
- Leaving the company
To help HR leaders better understand the strategic role of benefits in their company, there’s a unique metric that measures the value employees place on their benefits packages: benefits NPS. It empowers HR professionals to make a strong connection between the investment they’re making and the impact that investment has on employee loyalty.
Benchmark survey results
The weight benefits NPS carries is pivotal to employer strategy, but with no context, it can be hard to comprehend where a particular company stands. To establish benchmarks and provide helpful insight, we launched our Annual Benefits NPS Benchmark Survey in early 2020 to help employers understand just how much benefits NPS ratings can vary across industries, departments, and workers.
As I’ve explained in a previous post, NPS ratings are given on a scale between zero and 10, and each respondent is deemed a promoter, a detractor, or passive based on their rating. The NPS equals the percentage of promoters, minus the percentage of detractors, and falls anywhere on the scale of -100 to +100. With that background in mind, let’s review the results from our benchmark survey where we surveyed employees across multiple industries about various benefits categories: health, financial/retirement, time off, family planning, perks and discounts, and professional development.
Average benefits NPS: by industry, company size, and department
We learned that across multiple job functions and demographics, the average overall benefits NPS rating was only +2. Keep in mind this was specifically about benefits! What this showed us was that benefits really are in a class of their own, and it’s not surprising they’d be in such contrast with other industry NPS ratings. A very low NPS average for benefits appears to be standard.
When it came to industry, we found that Technology workers had the highest average benefits NPS at +25, while Retail came in the lowest at -20. But then we thought, how does company size factor in? Apparently, the bigger the company, the higher the benefits NPS—probably because of more options in the benefits package. Interestingly, though, that trend drops with companies of more than 10,000 employees. This could be due to the packages being too big and complex, or possibly even poor messaging that gets lost in such a large workforce.
Finally, department: Executive/Leadership employees tend to give the highest benefits NPS, which may be because they are closest to the decision-making on a company’s benefits package. HR/Admin teams fall somewhere in the middle with an average benefits NPS of +6, which may also be due to close proximity to benefits selections.
So what do you do with this information?
If an employer wants to improve their benefits NPS, there are really two paths to assess:
- Invest in different/more benefits
- Market the package better so it resonates
After each rating was made for each benefits category in our benchmark survey, we asked how confident respondents were in their knowledge of that particular benefits offering. If an employer learns that many people in their organization are rating their benefits negatively due to a lack of understanding, that sheds light on an important question: Is the issue the benefits themselves or lack of awareness?
Unsurprisingly, respondents who reported confidence were far more likely to be promoters on the NPS scale and tended to give more positive NPS scores in various benefits categories. When considering the benefits package overall, 47% of “very confident” respondents were NPS promoters compared to only 13% of other respondents.
All of this is to demonstrate how employers can use a metric like benefits NPS to understand employee perception of benefits in a more strategic way. This positions employers not only to assess the impact of their benefits package better, it helps them take a step forward in rounding out their entire employee value proposition. By measuring the value of a company’s total rewards package, those employers glean more information needed to assess the rest of those important categories (compensation, career advancement, culture, etc.).