Benefits professionals are currently feeling pressure from all angles, required to keep a tight rein on costs, achieve consistent global governance and faultless administration, while demonstrating strategic value. Even though an organization’s investment in benefits is often substantial, usually second only to pay, the benefits function is often seen as secondary to the overall HR organization. Few employers make the investment needed to really maximize benefits spend and differentiate their offering, and yet the financial and reputational cost of getting benefits wrong is astronomical.
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Thomsons Online Benefits’ recent Global Employee Benefits Watch report found that common objectives of benefits programs include attracting and retaining talent (82%) and enhancing employee engagement (65%). However, the reality is that the top benefits initiatives currently being implemented are focused on gaining a tighter control of costs, consistent global governance, and automating administration processes. These results suggest that there are still manual processes that are bogging teams down and preventing them from being truly strategic.
Benefits professionals must step up to the mark and get much-needed clarity on spend while providing certainty that every area, like employee coverage and compliance with local legislation, is covered. This will then open up space to focus on high-value strategic work for the HR function. In order to do that, there are key areas to focus on, including embracing technology, developing a strategic vision, and building organizational influence.
Embracing Technology
Benefits teams need to embrace technology as a means of tackling the multiple demands on their time (administration, reporting, dealing with local legislative requirements)—but over a third do not use technology, which has the potential to significantly reduce the benefits administration burden and likelihood of error. The importance of this cannot be underestimated. An admin error may seem inconsequential, but imagine if someone falls seriously ill, only to find that an admin error means they’re not covered by their medical insurance. This is a costly and irresponsible mistake.
Benefits software also keeps employers on top of regulatory shifts, ensuring organizations do not risk a hefty government fine. Benefits laws are often unique, complex, and sometimes contradictory across countries and even within different states in the United States. However, compliance is made significantly easier through the use of technology. Whatever way we look at it, benefits professionals are reaching a tipping point where the risk of not using technology is simply too great to delay its implementation any longer.
Developing a Strategic Vision
Relinquishing this administrative burden will provide benefits teams with more time to focus on developing their strategic vision. This is important because having a global strategy in place is associated with more efficient delivery of global benefits objectives. Sixty-six percent of organizations reporting high levels of alignment believe their benefits program is effective or very effective. This compares to just 14% of organizations reporting no alignment.
Everything should be aligned with an employer’s purpose and value proposition through a global strategy. Yet shockingly, almost half (48%) of employers do not have a global benefits strategy in place and only 31% have had this in place for more than 3 years. Developing a strategic vision can start with undertaking a comprehensive benefits audit with focus groups and surveys to determine how benefits are currently being viewed within the company by employees and then using those insights to develop your company-specific vision. That’s what global technology company Sage did, and their new vision resulted in staggering levels of engagement with their benefits—logins to their benefits platform, powered by Darwin, increased by 56% and benefit selections increased by 62%—which culminated in their winning the ”Most engaging benefits proposition” at the Employee Benefits Awards 2017.
Building Organizational Influence
Benefits professionals also need to start unlocking their potential for organizational influence. Enabled by analytics, benefits pros can support HR to drive the benefits conversation from an engagement perspective. But reaching this potential depends on empowering and building teams with the right skill sets. Benefits teams need to have analytics capabilities to generate real strategic insight from the reams of data that they now have at their fingertips. They also need marketing skills to interpret data (click through rates, etc.) and use this to hone their benefit communication campaigns.
It’s interesting to note that respondents with a centralized global benefits strategy are much more likely to be increasing the size of their benefits administration teams (27%), as are those with centralized benefits administration (30%) and those planning to move their benefits administration to a central team (31%). This suggests that teams are expanding in preparation for playing a larger, more strategic and multifaceted role in their organizations.
Ultimately, benefits professionals are now reaching a tipping point; there are so many demands on the function that inaction is no longer an option. Technology, data analytics, and setting and sticking to a strategic vision will be critical tools for meeting the C-suite appetite for strategic spend and assurance that all legislative and administrative requirements are being met, all while keeping employee engagement with their benefits and their organization at an all-time high.
Chris Bruce is the Cofounder and Managing Director of Thomsons Online Benefits.