Now more than ever, there is a tremendous need for technology that helps organizations respond quickly and effectively to change while delivering a consistent employee benefits experience. This increase has mainly been seen in the areas of cost management, benefit utilization, and overall strategic company goals, says Chris Bruce, managing director and co-founder, Darwin.
Economic challenges have traditionally inspired organizations to reduceOpens a new window their budgets until the market stabilizes, but HR technology might be one area that defies this tradition. According to a reportOpens a new window by KPMG, almost all (99%) of employers are investing in HR tech and other tools to combat the current climate. Organizations are especially interested in HR tech that can assist with benefits utilization, cost management and strategy. And with data and analytics to inform and educate, organizations will be positioned to implement a stronger benefits strategy without letting costs get out of control.
Here is how the right HR technology can help in these three focus areas.
1. Use Technology To Take a Closer Look at Benefits Utilization
Employee needs are as unique and important as their individual attributes. No two are exactly the same, so it is important to consider the relevance of each benefit to each employee. Needs may evolve as employees move, get married, have children or encounter other life-changing events. For some, their needs may have changed as a result of COVID-19. Others simply may not be interested in or aware of all the benefits that are available to them.
Learn More: 3 Technology Lessons Employers Learned During Open Enrollment
Organizations can overcome these challenges with the right benefits tech, which allows them to instantly pinpoint the benefits being utilized and separate them from those with low uptake. They can take this knowledge one step further by relying on analytics to investigate the source and determine if utilization differs across demographics, departments or other areas.
Analytics can also be used to measure the success of new benefits at launch, which is extremely important at a time when benefits account for such a significant part of employee salaries. Our latest shows that 42% of employers spend more than 21% on benefits each year per employee as a percentage of base salary. With so much capital invested in benefits, employers need to ensure that their costs do not get out of control.
2. Identify Potential Costs Before They Become a Problem
Given the expense and the need to provide the benefits that matter most, organizations will need the right technology to ensure they can avoid rising or unnecessary costs and deliver personalized benefits that serve all employees. However, benefits expenses cannot be controlled if organizations are not aware of them, so they may continue to pay until they are informed.
To stay on top of these costs, employers must identify potential expenses as early as possible — not three, six or nine months down the line. At that point, the problem would be much bigger and more difficult (or nearly impossible) to rectify.
It is vital that organizations deploy technology that enables them to pinpoint benefits that are not being utilized, as well as benefits in which usage has declined. Data and analytics are essential in determining utilization and associated expenses, enabling organizations to easily see which benefits should remain and which may need to be promoted or discarded.
3. Set New Strategic Goals Around Benefits to Better Serve Employees
Most married employees have, historically, received a wider range of benefits than their unmarried colleagues. This hidden ‘cost of being single’ comes to light in our researchOpens a new window , revealing that married employees receive an average of 3.6 more days of paid time off (PTO) per year, amounting to an average of $775 more in PTO value.
While this may not have been the news that single employees anticipated, changes are coming. More than 60% of HR decision-makers agree that it is “unfair that colleagues without legal partners don’t receive the same flexible benefits as those that are married or have children.â€
Employers are now setting strategic goals around their benefits, particularly around demographics. For example, they want to achieve benefits parity across genders, and they need the right technology, coupled with the necessary data and analytics, to help them achieve this goal. This is an interesting development as organizations have spent years working on pay parity, but many had not yet considered parity of benefits until now. By offering equal benefits to all staff, employees will feel appreciated and supported regardless of who they are or their marital status.
Learn More: HR Tech in 2021: 3 Employee Benefits Trends to Know About
Reduce Expenses and Provide What Employees Need With the Right HR Technology
As organizations pull back on many of their investments, HR tech is proving to be one thing they cannot live without. By helping to determine which benefits are being utilized, organizations can eliminate those that employees are less interested in using. HR tech also empowers employers to identify and rectify potential cost drains before they become a problem. More than that, they enable organizations to set strategic goals, such as benefits parity, to ensure they offer what employees want most. By using the right technology and implementing a plan for the future, employers can meet these goals and provide exactly what employees need.