Measuring Utilization of Your Employee Benefits Program

Measuring Utilization of Your Employee Benefits Program

Posted by HR Division of Propel HR on 8/9/23 2:45 PM
HR Division of Propel HR
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Posted on: August 9, 2023

Here are some of the top reasons why employers should pay attention to the utilization rate of their employee benefits program.PHR_2023BenefitsBenchmarkReport (970 × 150 px)What is an Utilization Rate? 

You often hear about the importance of providing great perks to attract and retain top talent, but how often do you actually assess how effectively these perks are being used? Utilization rates refer to the percentage of eligible employees actively participating in or use a particular benefit. It's a key metric that helps employers evaluate the effectiveness of their benefits program.

AdobeStock_515427075_01-1Why does it matter? In today's data-driven world, decisions based on solid evidence rule. When it comes to managing employee benefits, the same principle applies. Utilization data equips employers with concrete insights to support the decision-making process. Whether it's negotiating with benefit providers or strategizing for the upcoming fiscal year, having accurate utilization metrics at your fingertips helps you make informed choices that align with what employees want.

How It Helps Employers

Each workforce is a unique blend of diverse individuals with varying needs and preferences.  A utilization review helps employers:

Maximize ROI on Benefits Investment. Imagine investing a significant chunk of your budget into a new suite of employee benefits, only to learn that only a small fraction of your workforce actually takes advantage of them. That's where measuring utilization comes in. By tracking the number of employees using each benefit, you gain valuable insights into which offerings are resonating with your team. This data-driven approach enables you to make informed decisions about where to allocate resources, ensuring you get the most bang for your buck.

AdobeStock_211986134_01Tailor Benefits to Employee Needs. By analyzing utilization rates, you better understand what matters most to your employees. For instance, if your remote employees rarely use the gym membership perk but are clamoring for more flexible work arrangements, you can adjust your benefit offerings accordingly. This tailored approach demonstrates that you're genuinely invested in your employees' well-being, leading to higher job satisfaction.

Identify Communication and Education Gaps. Many times, underutilized benefits aren't due to a lack of interest but simply a lack of awareness or understanding. Measuring utilization can shed light on these communication and education gaps. 

AdobeStock_610382289_01Improve Employee  Retention. A well-utilized benefits package can be a game-changer when it comes to retention. Studies show that when employees feel their needs are being met and their employer cares about their well-being, they're more likely to stick around for the long haul. 

Gain Valuable Benchmarking and Industry Insights. Conducting a utilization review doesn't just provide insights about your benefits program; it can also offer valuable benchmarking data against industry standards and your competitors. Understanding how your benefits program compares to others in the same field can help you identify areas where your business excels and where improvements are needed.

Benefits studies, such as Propel's 2023 Benefits Benchmark Report, can help employers see how their benefits program compares with other employers nationwide. This new report analyzes health plans offered by 20,000 companies in every state and shows how benefit offerings can vary.

 ➡️➡️ Read More:  Analyzing Trends in Employee Benefits

By staying up-to-date with what's new in employee benefits, you position your business as an employer of choice in a competitive job market.

AdobeStock_576407441_01Strengthen Benefits Engagement. In many cases, it's not about the benefit itself but how it's presented and accessed. High utilization rates may indicate that employees are interested in the benefit option and find it easy to access. Low utilization could signal that there's room for improvement in the user experience. By digging into utilization data, you can pinpoint any roadblocks in the benefits journey and streamline the process, making it more convenient for employees to engage with the perks you provide.

Stay in Compliance. Benefits are subject to various legal and compliance regulations, such as healthcare plans and equal opportunity requirements, for example. Failing to comply with these regulations can lead to costly penalties. A utilization review can help identify potential compliance issues, allowing you to take corrective actions. In addition, tracking use also demonstrates that you're providing equal access to benefits for all employees, promoting a fair and inclusive workplace.

Monitor Progress

After making adjustments, continue monitoring utilization rates over time. An ongoing review ensures your benefits program continues to meet the changing needs of your workforce.

Unlock the Full Potential of Your Employee Benefits Program

From healthcare coverage and retirement plans to professional development opportunities, benefits represent a considerable financial investment. Measuring utilization data helps employers gauge the ROI and compete by designing a more effective benefits program. But utilization isn't just about numbers; it's about creating a workplace where employees feel valued, supported, and motivated to contribute their best which can positively impact your bottom line. 

If you need help finding the right benefit options for your small business, just give us a call at (800) 446-6567.

Choosing the Right PEO

About Propel HR. Propel HR is an IRS-certified PEO that has been a leading provider of human resources and payroll solutions for more than 25 years. Propel partners with small to mid-sized businesses to manage payroll, employee benefits, compliance and risks, and other HR functions in a way that maximizes efficiency and reduces costs. Visit our new website at

Topics: Featured, Employee Benefits

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