Given the ever-increasing costs of employee benefits programs — and the need to maintain them in order to attract the best talent — it only makes sense to know exactly what you’re getting for your benefits buck. Guest poster Brenden Mielke explains how analytics can help.
As big data continues to drive business decisions, professionals in every vertical are scrambling to make sense of the numbers to determine how time and resources should be spent more efficiently.
According to PwC’s 2012 Annual Global CEO Survey, more than 80% of US CEOs said they needed critical talent-related insights to make business decisions. When surveyed this year, however, only 46% said their companies used data analytics to indicate how effectively skills are being deployed.
While advances are being made in the technology needed to interpret big data, the realm of benefits and reward analytics remains primarily unexplored – until now. It’s a massive opportunity to not only maximize efficiency in corporate benefits spending, but to use the insights as a basis of creating a more engaging employee facing benefits platform.
A more rewarding benefits package traditionally translates into increased employee engagement and satisfaction, which in turn drives up business productivity and client satisfaction.
The problem – despite the goldmine of talent information most employers sit on – lies in that businesses either lack the foresight to see the long-term potential benefits, or they don’t have the proper technology needed to break down data for decision making. This is surprising, considering the investments made in benefits packages make up a significant percentage of talent-related spending.
Bringing HR up to speed
A major roadblock many businesses face when it comes to maximizing ROI on benefits schemes or drawing any meaningful conclusions is that they are using out-of-date strategies, such as disparate data streams and legacy systems. These antiquated policies are difficult to interpret into anything coherent.
In fact, according to a recent study conducted by Thomsons Online Benefits, 48% of businesses worldwide are struggling to report globally on their workforces. However, with the right technology in place, companies can compile a single source of talent information for global reporting.
The data can then be used to better control benefit spending budgets and build effective employee engagement plans. Furthermore, it can provide HR staff with a 360-degree view of how employees are using their benefits so they can evaluate costs for the most effective benefits plan.
Prioritizing employees’ needs
With the technology available to translate the numbers, employers have the opportunity to identify the types of benefits that appeal most to their workforces. For example, if company managers are seeing high levels of interest in discount schemes, then providing more of these will be well received by employees.
This, in turn, has a positive knock-on effect on employee engagement – something that the Global Employee Benefits Watch survey indicates is a problem for 30% of global companies.
Employees will appreciate having a program which meets and exceeds their expectations, ultimately driving employee loyalty and overall productivity. Designing benefits packages that employees really value is therefore critical to maintaining a fulfilled, productive and successful workforce.
An added aspect for global businesses is tailoring benefits packages for each country they operate in. While medical benefits might be popular in North America, retirement planning may be preferred in East Asia. Leveraging an existing global benefits tech provider to help adapt benefits programs in each region will reduce overall costs, and further using analytics to determine hyper-specific programs will ensure employees are happy with their benefits package.
Getting the word out to maximize ROI
A lesser-realized but prevalent issue remedied by benefits analytics is the ability to effectively communicate benefits offered by the company. A leading cause of underused benefits, most employees do not take full advantage of potential offers simply because they are unaware they exist.
Consider, for example, having access to the information of when employees are most likely to access their benefits portal. With that knowledge, employers can use this opportunity to specifically communicate new discounts or other benefits. This is particularly important for employees that do not have access to a computer at work, such as those in retail or manufacturing.
Furthermore, employers can analyze information to assess the effectiveness of a communications strategy. For example, if HR is running a campaign on communicating wellbeing benefits, they should expect to see a positive data correlation in relation to both preventative and protective healthcare benefits. A successful campaign should result not only in more people enrolling in a health insurance scheme, but also an increase in use of related benefits, such as health checks. If there is no correlation, a problem may in fact lie in the communications strategy.
Keep the end goal in mind
While reducing employees to spreadsheet data may at first seem impersonal, in practice it presents organizations with endless opportunities to individualize their benefits package. Taking a data-driven approach can enable businesses to reduce costs, while creating a tailored benefits experience for a diverse, global workforce. It has the potential to dramatically alter how businesses reward their staff and impact their lives in a positive and profound way.
The ultimate goal of benefit analytics software is twofold: to create a benefits plan which resonates with employees, and cut down on excess spending. Thus, when used correctly, benefits data analysis can lead to significant cost savings for employers.
Brenden Mielke is Director of product management at Thomsons Online Benefits.