HR and benefits technologies are taking center stage in 2020, but what differentiates those that will be successful from those that will fail? How can businesses tell which to invest in versus those that are, at best, pie-in-the-sky concepts that aren’t ready for mass adoption?
The trial-and-error approach is no longer enough. If enterprises want to succeed, they’ll need technologies that not only propel organizations forward but can evolve with their growth and ever-changing needs. There will be many to evaluate in the years to come, but there are three that will prove to be especially important in 2020.
- Control expenses with benefits software
Employee benefits account for an enormous part of company expenditures. According to the Bureau of Labor Statistics, total compensation reached an hourly average of $34.77 for private industry workers. As expected, wages and salaries accounted for the majority of that spend (70.1%), amounting to $24.38 per hour. Benefits were also a significant cost, however, averaging $10.38 per hour (29.9%).
With so much money allocated toward benefits, employers can’t simply rely on disparate data streams and legacy systems. In doing so, enterprises will struggle to analyze the data that’s needed to unearth valuable, actionable insights. This is not an isolated problem – our own research shows that 48% of businesses find it difficult to report globally on their workforces. With nearly half of the companies struggling, it’s time to invest in benefits software that offers powerful data analytics capabilities. Only then will they be able to get a closer look at benefits expenditures and rein in these expenses.
This is more than a simple cost-cutting measure, however. Enterprises should not be looking to reduce their benefits, which are extremely important in fostering and maintaining employee loyalty. Rather, they should be focused on making smarter decisions, such as reducing waste. One company found that it was paying for 7,000 more health insurance policies than it actually needed. By discovering other unnecessary expenses, employers can save a tremendous amount of money without changing the benefits they offer.
- Reduce the administrative burden
Rewards programs are a great way for any business to show employees that they are valued and appreciated members of the team. But when multiple providers are involved, the administrative burden can multiply. Businesses might find themselves paying for more solutions than are actually necessary.
Enterprises should instead rely on one benefits management offering that can deliver an integrated solution. By providing everything that’s needed (corporate broking, benefits advising, employee helpdesk and technology) in a single place, businesses can offer outstanding rewards at a lower cost. This also makes it easier for employees to directly engage with their benefits, creating a more immersive experience between companies and their teams. In a world where engagement is having an increasingly strong impact on employee productivity and retention, this is absolutely essential. And by enlisting in a single solution that serves as the benefits broker, businesses can also negotiate the very best rates from benefits providers.
Enterprises can take this one step further by automating the employee benefits administration process. As a result, employees will be able to easily enroll for benefits online, eliminating waste (such as unnecessary paper forms) for the company. It also makes it easier for staff to quickly determine which benefits are available, allowing them to better select those that meet their coverage needs.
- Make the switch to predictive analytics
Prescriptive analytics have been the norm for several years, allowing employers to make smarter and more efficient decisions. Predictive analytics is the next frontier, giving firms the power to model and forecast future macro trends. As workforces age, for example, organizations will see an impact on both benefits expenses and requirements. An influx of newer, younger employees would also require some changes. The same is true as workforces become more global and diverse. In order to remain competitive, employers will need to adjust accordingly with every evolution.
These evolutions are not limited to a change in workforce alone, however. Preventative health screenings can also play a role, as well as a change in working practices. A company that implements new safety protocols, for example, could lower the number of accidents and thus reduce absenteeism. Predictive analytics can then be used to better match benefits to all of these changes.
Employers must also recognize that while data is invaluable, it should only be obtained after receiving employee consent. The California Consumer Privacy Act is one of the first legislative reminders that employee data is not only useful but very sensitive information. Organizations that wish to use it must earn and maintain the trust of its employees, both in how the data is utilized and how it is stored.
The time is now
The new year represents an opportunity for enterprises to take charge of their benefits offerings by investing in the right technologies. Whether looking to reduce costs or striving to lower the administrative burden, now is the time to take action. A single benefits management solution can prove to be invaluable in overcoming these and other issues. At the same time, predictive analytics can provide an unprecedented ability to model and forecast future macro trends.