Why Benchmarking Your Employee Benefits Isn’t Optional in 2025

If you’re heading into your next benefits renewal without benchmarking, you’re missing the full picture — and it could be costing you.

In 2025, a group benefits plan isn’t just a checkbox. It’s a core part of your compensation strategy, your culture, and your ability to attract and retain top talent. Without knowing how your plan stacks up against others in your industry, you risk overspending, underdelivering, and falling behind in a highly competitive market.

What Is Benchmarking?

Benchmarking is the process of comparing your group benefits plan to industry standards, based on factors such as company size, sector, location, and workforce demographics.

It helps answer essential questions like:

• Are we overpaying for outdated coverage?
• Are we underdelivering compared to others in our space?
• Is our plan aligned with what our employees actually value?

Effective benchmarking goes beyond premiums. It evaluates plan design, coverage depth, cost sharing, mental health support, and utilization trends — so you’re not just compliant, you’re competitive.

What the Data Tells Us

Recent trends in the Canadian group benefits landscape highlight just how much variation exists:

• 88% of Canadian employers offer mental health benefits, but the scope of coverage varies widely.
• Health Spending Accounts (HSAs) are becoming the norm for small and mid-sized businesses seeking flexibility.
• Dental maximums, drug caps, and paramedical limits differ significantly, even within the same industry.

Benchmarking reveals whether your plan is actually competitive, or just looks that way on paper.

Attracting and Retaining Talent

In high-competition sectors like tech, engineering, and professional services, your benefits plan is often a deciding factor for job seekers, particularly those with families or complex health needs. Candidates are comparing your offering to what they see elsewhere.

Without benchmarking, your plan might miss the mark, leading to higher turnover, pressure to raise salaries, and disengagement with underutilized benefits. On the other hand, a well-aligned plan can enhance employee satisfaction and retention without incurring additional costs. It’s not about spending more — it’s about spending smarter.

Managing Costs Strategically

Benchmarking helps you identify where you’re overpaying or allocating budget inefficiently. You might be investing in benefits your team doesn’t value, while underfunding areas that would make a real impact.

By comparing your current plan to market data, you can reallocate resources more effectively and ensure you’re getting maximum value from every dollar spent.

Closing Gaps and Spotting Opportunities

Benchmarking also reveals areas where your benefits may lag behind. You might be missing out on:

• Mental health coverage
• Family-focused benefits
• Flexibility through HSAs or WSAs
• Support for diverse or multi-generational workforces

Identifying these gaps allows you to make meaningful updates that better reflect your team’s needs and expectations.

Staying Ahead of Industry Shifts

The benefits landscape is evolving quickly. Employee expectations are rising, compliance requirements are tightening, and new plan models are gaining traction.

Benchmarking helps you stay proactive — not reactive — so your plan evolves alongside your business, not behind it.

How Pelorus Uses Benchmarking

At Pelorus Advisory Group, we make benchmarking part of every renewal conversation — not a one-time task. We use up-to-date market data and anonymized peer comparisons to:

• Show how your plan stacks up
• Identify gaps and redundancies
• Recommend targeted improvements
• Prepare you for renewal with confidence

We also utilize benchmarking insights to enhance the communication of benefits, ensuring that employees understand and value what they’re receiving.

When to Reevaluate Your Plan Design

While every renewal is a chance to optimize, there are certain moments when benchmarking becomes mission-critical:

• After a period of rapid growth
  Rapid expansion often means your workforce has changed — in terms of size, roles, and expectations — and your benefits plan may no longer accurately reflect those realities.
• Following significant workforce shifts (e.g., remote, multi-province, younger teams)
  A distributed or evolving team brings new compliance challenges and varied benefit needs that require a more flexible or regionally tailored approach.
• When introducing new compensation models or perks
  If you’re updating salary structures, bonuses, or equity programs, your benefits should complement and reinforce your overall total rewards strategy.
• If you’re experiencing higher-than-normal turnover
  Elevated attrition may signal that your benefits aren’t keeping pace with what the market or your employees expect.

If any of these sound familiar, it’s time to get a fresh perspective before your next renewal locks you into another year of misalignment.

Future-Proof Your Benefits Strategy

Benchmarking isn’t just a data point, it’s the foundation of a smarter, more adaptive benefits strategy. If your current plan still reflects the business you were two years ago — not the one you’re becoming — it’s time for a reset.

Let’s build a plan that supports your growth, aligns with your people, and delivers lasting value.