Ontario Municipal Human Resources Association

Benefit benchmarking has long been a staple of municipal HR planning. Whether preparing for collective bargaining, supporting attraction and retention objectives, or identifying trends that can inform health and wellness initiatives, plan design and utilization benchmarking can provide valuable insights.

While benchmarking data certainly provides important context, perhaps its greatest value is in the discussions, initiatives, and decisions it can support in relation to benefit planning

Benchmarking Plan Design

Traditionally, benefit benchmarking focuses on plan design. Employers compare line items such as vision care, paramedical, dental, disability programs, spending accounts, EFAPs, and premium cost-sharing arrangements.

These comparisons are important. They help municipalities understand where they lead, where they lag, and whether their programs remain competitive within the comparator group. They can also support decision-making by providing a foundation for discussions with stakeholders when benefit changes are being considered.

A benchmarking report can tell you what other municipal employers are doing. It cannot tell you whether those decisions are right for your organization.

Once employers have this information, they must decide whether a particular plan provision supports the outcomes they are trying to achieve. In some cases, that may mean adopting a benefit that few comparators currently offer. In others, it may mean resisting a market trend that does not align with organizational objectives.

Benchmarking Utilization

While plan design benchmarking compares what benefits are offered, utilization analysis helps employers understand how those benefits are actually being used.

Unlike plan design, utilization data can be more difficult to compare across organizations. Different insurers, and reporting methodologies may produce different results, making true “apples-to-apples” comparisons challenging.

Some of the most valuable utilization insights often come directly from the benefit provider’s own data. Insurers have access to extensive claims information across their broader block of business and can often identify whether a municipality’s utilization patterns are higher, lower, or consistent with comparable groups.

These insights can help uncover opportunities that drive meaningful action. For example, a municipality may offer a robust EFAP that appears competitive on paper, yet utilization may be well below expected levels. This may signal a need for greater employee awareness, enhanced communication, or a broader discussion about barriers to accessing available support.

Importantly, utilization data relating to disability and drug claims can provide valuable insight into workforce health trends and emerging risks. Understanding usage can help inform health and wellness strategies that can contribute to improved health outcomes in the workplace.

Benchmarking as an Employee Engagement Tool

Benchmarking can also be a valuable employee engagement tool. Employees are often curious about how their benefits compare to those offered by neighbouring municipalities. Sharing benchmarking results at an appropriate level can help foster transparency, support informed discussions, and create a greater understanding of both the strengths and limitations of a benefits program.

In one municipal example, employee feedback highlighted a desire for improvements to benefits such as vision care and paramedical coverage. A subsequent benchmarking exercise confirmed that the municipality lagged some comparable employers in these areas. While the findings helped validate employee concerns, budget constraints meant that simply adding benefits was not a viable solution.

Ultimately, the benchmarking exercise became a catalyst for broader discussions with employees about priorities, trade-offs, and long-term sustainability. Through those discussions, a shared understanding emerged of where the plan stood, what employees valued most, and where future investments could have the greatest impact

What followed was a lengthy engagement strategy that included employee information sessions, surveys, and ongoing dialogue about the benefits program.

As employees gained a better understanding of plan costs and utilization patterns, the conversation evolved from simply asking for more benefits to identifying opportunities to maximize the value of existing benefit dollars.

Ultimately, the organization was able to implement meaningful changes by aligning benefit spending with employee priorities rather than simply adding new dollars to the plan.

A word of caution: benchmarking is only as meaningful as the comparator group selected. We have occasionally seen a provision negotiated by a large employer become viewed as a new benchmark despite being financially unrealistic or operationally unsuitable for many smaller municipal plans. Understanding the context behind the data is just as important as the data itself.

The goal of benchmarking is not to build the same plan as everyone else. It is to build a benefits program that reflects the needs of your workforce, supports your organizational priorities, and remains sustainable for the future.

When viewed through this broader lens, benchmarking becomes far more than a comparison exercise. It becomes a strategic tool for understanding employee needs, evaluating the effectiveness of existing programs, supporting meaningful engagement, and guiding future benefit decisions.