Small businesses want to stay competitive in attracting and retaining top talent, and a strong employee benefits package is a key part of that equation. However, they often face significant challenges—budget constraints, limited administrative resources, and the ever-changing landscape of healthcare and retirement benefits. Unlike larger corporations with dedicated HR teams and deep pockets, small businesses must be strategic in balancing affordability with offerings that meet employee expectations.
This is where benchmarking remains a powerful tool. By comparing their benefits against industry standards and companies of similar size, small businesses can identify gaps, prioritize the most impactful benefits, and make data-driven decisions. Benchmarking helps them see where they stand in areas like health insurance contributions, retirement matching, PTO policies, and wellness programs, allowing them to stay competitive without overspending.
Areas to Benchmark
- Health Insurance: Compare premium costs, coverage levels, and employee/employer contributions
- Retirement Plans: Evaluate matching contributions, vesting schedules, and investment options
- Work-Life Balance: Review types of leaves offered, amount of PTO, and remote/work from home opportunities
Key Benefits of Benchmarking
- Competitive Advantage: allows companies to understand how their benefits packages stack up against competitors, ensuring they attract and retain top talent.
- Cost Management: helps identify cost-effective benefits that offer high value to employees, ensuring they invest wisely in areas that matter most.
- Identifying Gaps: pinpoint areas where benefits may fall short compared to competitors
- Compliance Assurance: comparing benefits with industry norms helps ensure compliance with regulations and reduces the risk of legal or financial consequences.
Small businesses can prioritize benefit enhancements based on industry trends, focusing on areas like wellness programs, mental health support, or flexible work arrangements. Offering competitive, well-structured benefits positions a company as an employer of choice, reinforcing its reputation in the job market. Benchmarking isn’t just about comparison—it’s about finding opportunities to improve and differentiate, giving small businesses a smarter way to compete in the talent market.
How M3 Can Help
M3’s Applied Intelligence team has brought a level of data sophistication to our agency that can have a direct impact on our clients’ benefits strategies. BenchmarkPRO, our proprietary tool, allows your team to benchmark key metrics across our book of business, tracking plan design and benefit cost trends for medical, dental, and vision plans.
This tool gives M3 clients a clear, at-a-glance view of how their Total Rewards offerings compare to their peers, including traditional insurance benefits, work-life balance, salary, and retirement plans. With filtering options by industry, employee count, geography, and more, it provides customized insights tailored to M3’s client’s needs.
In today’s job market, small businesses can’t afford to guess when it comes to employee benefits. Benchmarking provides the clarity they need to stay competitive while managing costs effectively.
That said, benchmarking is a guide—not a one-size-fits-all solution. Every company has unique needs, and the best benefits strategy is one that aligns with both business goals and employee priorities. Use benchmarking insights to stay informed, but tailor your approach to what works best for your team.
Key Takeaways
By comparing their benefits against industry standards and companies of similar size, small businesses can identify gaps, prioritize the most impactful benefits, and make data-driven decisions. Want to learn more about M3’s Data Analytics tools? Reach out to your client executive, to transform your employee benefits package.
