Keep your benefits fit for the future
With employers facing global skills shortages, it has never been more important to think about optimising your employee benefits. Properly optimised 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, analysing 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 optimisation
When HR teams have to manually gather, standardise and analyse 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 centralise HR. Many hope to utilise technology to drive efficiencies and create a more unifying and equitable global employee benefits experience.
Technology is also driving total rewards optimisation by allowing employees to use their benefits from any location at any time. The value of this flexibility was realised during the pandemic, with employers quickly pivoting their benefits offerings. It has now become a must for any highly distributed workforce.
In addition to harmonising employee benefits, centralised benefits technology provides data insights to create a consistent employee experience. Analysing 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 optimisation 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 learnt 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 optimise total rewards offerings.
By analysing 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 optimisation, potentially making the difference between retaining or losing benefits budget.
Principles of employee benefits optimisation
Use data-driven insightsEmployee benefits optimisation requires quickly generating analytics on how benefits are being utilised 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 organisations and determine competitiveness. Also measure the ROI on existing and new benefits to justify your budget to the board.
Use technology to personalise the employee experienceCentralise benefits and use technology to generate data insights. These insights can also be used to personalise the employee experience, tailoring communications to optimise engagement and loyalty.