Keep your benefits fit for the future
With employers facing global skills shortages, it has never been more important to think about optimizing your employee benefits. Properly optimized benefits not only reduce people risks and boost health and engagement but can also help companies attract and retain talent.
Critical to success is collecting and interpreting data on which benefits your employees are actually using. This can then be used to inform strategies on how best to strengthen your employee value proposition (EVP). For example, introducing new mental health benefits in response to increasing health insurance costs linked to fatigue or burnout.
Despite the value of such a data-driven approach, analyzing the data required remains a challenge for HR. 80% of employee benefits data analysis is still done using spreadsheets at a time when other functions, including finance and marketing, are already using automated analytics.
Technology for employee benefits optimization
When HR teams have to manually gather, standardize and analyze employee benefits data, time is wasted, and the insights quickly become dated. Thankfully, technology is now transforming how companies manage employee benefits, with two-thirds (67%) of employers saying they plan to centralize HR. Many hope to utilize technology to drive efficiencies and create a more unifying and equitable global employee benefits experience.
Technology is also driving total rewards optimization by allowing employees to use their benefits from any location at any time. The value of this flexibility was realized during the pandemic, with employers quickly pivoting their benefits offerings. It has now become a must for any highly distributed workforce.
In addition to harmonizing employee benefits, centralized benefits technology provides data insights to create a consistent employee experience. Analyzing the data allows you to see how employees are using benefits in real time to determine which benefits are proving effective. These insights can then inform your employee benefits optimization strategy to improve engagement and reduce costs.
Putting benefits insights to work
Once you know how and why people are using their benefits, you can use these insights to streamline your offering. If employees respond to a recession by decreasing voluntary pension contributions, what financial well-being benefits should you introduce?
Lessons can again be learned from the pandemic. Employers used real-time insights to identify any gaps or successes that appeared in their benefits offerings. By tracking reimbursements, many employers saw people swapping out gym memberships for virtual classes and commuter passes for bikes. This understanding led to the introduction of further digital healthcare solutions. The analysis on take-up of these new benefits was then used to further optimize total rewards offerings.
By analyzing total rewards, HR leaders can go beyond tracking the success of a single benefit or one region’s preferences. They can create and track personas to generate a data-driven picture of how benefits are used to share with the C-suite. This, in turn, will drive optimization, potentially making the difference between retaining or losing benefits budget.
Principles of employee benefits optimization
Use data-driven insightsEmployee benefits optimization requires quickly generating analytics on how benefits are being utilized as well as by whom and when. These insights can then be used to inform and drive strategy.
Measure the return on employee benefits to justify budgetUse your data insights to benchmark your employee engagement against peer organizations and determine competitiveness. Also measure the ROI on existing and new benefits to justify your budget to the board.
Use technology to personalize the employee experienceCentralize benefits and use technology to generate data insights. These insights can also be used to personalize the employee experience, tailoring communications to optimize engagement and loyalty.