While analytics have become popular in the world of HR, the ability to analyze and gain actionable insights into global benefits and reward data has remained largely unexplored. Until recently, that is. Organizations are now starting to realize that they need to demonstrate concrete ROI on their benefits spend, especially since benefits make up such a huge percentage of the organization’s budget. By gaining visibility into global benefits spend and uptake, organizations can realize significant results in a variety of areas.
By: Tony Anello, SVP of Americas
- Gain control of global benefits spend
The price of benefits globally averages 31 percent of an employee’s salary, according to the upcoming 2016 Global Employee Benefits Watch report from Thomsons Online Benefits (last year it was 20-22 percent). This means that annual benefit spend reaches hundreds of millions of dollars globally for the majority of multinational organizations. But, with this spend fragmented across markets, countries, providers and products, it’s very difficult for organizations to gain visibility into what they are spending on benefits, understand which benefits employees are actually using, and determine which benefits they want.
By analyzing benefits data, benefits spend can be broken down by country, region and even type of benefit. When companies start implementing analytics to track benefits spend, they are often surprised at all the level of waste in terms of benefits that were underutilized, as well as untracked spending across regions.
One multinational company, for example, was running into tax issues in China and instructed Deloitte to do a global benefit audit. In the process, they discovered that they had been paying for health insurance for 21,000 employees; however, only 16,000 workers were employed at the time. That means they were paying insurance for 5,000 employees that were no longer with the company. By digging into benefits data, the company was able to significantly decrease wasteful spending.
- Understand the benefits employees actually value
By using analytics to gain insight into benefits uptake, employers can better understand which benefits employees want – down to a regional, generational, and even individual employee level. Companies are able to gain visibility into the uptake of benefits across demographics or evaluate the costs of a particular benefits stream, such as well-being.
What’s more, with this insight, employers can strategize their offerings and personalize benefits based on uptake. Armed with understanding of which benefits are popular, companies can shift strategies to focus on the types of benefits employees value most, as well as tailor benefits according to regional preferences. Similarly, employers can identify which benefits are not popular or discontinue those that are not cost effective.
- Effectively communicate with employees
Few employees truly understand the value of their benefits or even what is being offered to them – especially those that only receive communication about their benefits once a year during the enrollment phase (23 percent!). In most cases, when employees are not taking full advantage of potential offers, it is simply because they are unaware they exist. By using analytics, organizations can provide more targeted and effective communications to their employees. For example, perhaps data shows that employees are most likely to access their benefits portal from 8:00 to 9:00am when they’re on the train traveling to work. With that knowledge, HR can use this window of opportunity to communicate new discounts or other benefits. They may also make that data mobile-optimized so employees can access it via their phones. This is particularly important for employees that do not have access to a computer at work, such as those in retail or manufacturing. Making these small changes will ultimately make employees more receptive to their benefits, and happier with their employer.
Furthermore, HR teams can analyze information to assess the effectiveness of a communications strategy. For example, if HR is running a campaign on communicating well being 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.
- Recognize and improve employee engagement
Employee engagement has proven to reduce turnover – 25 percent less turnover in high-turnover organizations, 65 percent less turnover in low-turnover organizations – and being engaged with benefits is a huge piece of that. It is easy to forget that benefits are fundamental to the employee’s reward and their choice of employer. In other words, benefits (along with pay) are the ‘food and shelter’ of the Engagement Hierarchy of Needs, as found in this report. Through analytics, employers are able to understand who is engaged with their benefits and who is not, and build effective employee engagement plans around those insights. This includes international employees, as strategic engagement plans should accommodate for language and cultural differences.
An important step toward increasing engagement is communicating benefits through various forms of interaction and multiple touch points. For example, I know one multinational company that was not very happy with the level of participation in their retirement program, especially with males between the 25- and 30-years-old. In order to increase engagement, they sent targeted communication to employees meeting the demographic that were not taking full advantage of matching benefits. The message was that the person sitting next to them was earning more toward retirement from their employer than they were, creating a water cooler moment among employees. They saw participation in full matching jump from 32 percent to 87 percent!
- Attract and retain top talent
Benefits also contribute to a strong company culture – which is critical to an organization’s employee value proposition and helping it attract the right talent to the business. In effect, if a company has developed a good reputation of culture and great benefits, employees are more willing to refer potential talent.
The HR team can also use benefits as a recruiting tool. Say the company is looking to hire entry-level employees. HR can analyze the benefits uptake of its Millennial employees (which are likely very different than the Baby Boomer population) and promote those benefits when hiring – maybe Millennials appreciate perks like “candy walls” or flexibility. This is important to know.
The more you know
Knowledge is the first step, and making informed, strategic decisions based on that knowledge comes next. Taking that extra step to analyze global benefits data can enable businesses create a tailored benefits experience for a diverse, global workforce, as well as reduce excess spending. Thus, when used correctly, benefits data analysis can lead to significant cost savings for employers, as well as dramatically alter how businesses reward their staff and impact their lives in a positive and profound way.
Tony Anello is Senior Vice President, Americas at Thomsons Online Benefits (www.Thomsons.com), the SaaS provider of global benefits and employee engagement software. Over the past two decades, he has served in a variety of leadership positions with companies focused on best practice in HR Technology. Before joining Thomsons, he most recently served as Executive Vice President of the Americas for Corporate Executive Board (CEB), a best practice insight and technology company.