The HR industry is in the midst of a digital revolution. HR professionals are now flooded with options for technologies -- as evidenced by the more than $2 billion in investment capital raised for HR technology in 2015 -- for everything from recruitment and performance management to learning, wellness and employee engagement.
This should be a welcome development to help resolve a disconnect in HR technology adoption: According to a survey of human resources and business leaders (Deloitte’s Global Human Capital Trends 2016), 75 percent of respondents believe digital HR tools are an important priority, yet only 38 percent of companies are even thinking about digitalizing their HR tools, and only 9 percent are fully onboard with digital HR systems.
In order to stay relevant and recruit top talent, especially among millennials who are projected to make up 50 percent of the U.S. workforce by 2020, HR teams will need to partner closely with IT to keep pace with advancements in HR technologies.
This will not only transform the impact HR has on all employees, but also benefit the company’s bottom line. According to a McKinsey Global Institute study, businesses deploying digital HR tools could increase output by up to 9 percent and reduce employee-related costs by up to 7 percent.
Why you should digitalize your health benefits
The digitalization of health benefits is one of the most complex technology integrations there is because of the amount of sensitive data that must be distributed to many different stakeholders.
However according to the Aflac WorkForces Report Open Enrollment Survey, employees are increasingly going online to enroll in their benefits, as opposed to selecting their benefits using paper forms or going through call centers. The survey also found that because employees are responsible for an increasingly greater share of their health care costs, they expect more support and more decision-making tools during open enrollment than in years past.
New digital technologies that allow HR managers and/or employees to do multiple tasks on one platform offer countless advantages, particularly when it comes to helping employees make health-benefits decisions.
According toDeloitte’s Global Human Capital Trends 2016 survey, HR can receive 10 times as many responses from employees with a mobile application compared to traditional systems. Additionally, employee productivity can improve and the data quality can rise with the use of technology.
Configuration is king
When researching and selecting digital solutions for HR, the most important consideration is configuration versus customization, and in my view, configuration is king.
A common misstep in selecting new benefits solutions is the propensity to build custom solutions from the ground up. Vendors often market customization as a client acquisition strategy, telling their prospects they can “build whatever they need.”
This idea sounds great in theory, but there are quite a few problems that can result from building and maintaining a one-off, customized solution. Customization often prevents employers from being able to apply future upgrades without having the vendor modify the requested customizations, typically at significant expense. What’s more, customizations are difficult to maintain and can create more defects and errors than they are worth.
Fortunately, vendors in today’s market are providing more and more options for configured solutions, while also complementing an individual company’s benefits strategy. The configuration approach takes the backbone of a software solution and allows vendors to build features into it in a way that is cost-efficient, scalable and flexible.
The vendor can make certain customizations within the configured software so that a product feels as though it was built just for a client’s specific needs. Examples are: a financial services company can turn off the social sharing feature in its benefits solutions if this feature conflicts with the company’s regulatory compliance positions, and a consumer products company that can turn on the configured incentives feature, enabling it to offer incentives to encourage employees to take certain actions.
Both companies are using the same product, which they can configure to fit their specific needs. There is no need to call in the IT department or the vendor, the company’s in-house administrator can easily make the changes using flexible dials.
Configuration allows for easy upgrades because it doesn’t require new coding for the latest version of the tool to work. It also offers the benefit of learning and being able to adopt best practices from all of the vendor’s other customers who are using the same software.
Vendors can benchmark against other populations to demonstrate what elements within the solution elicit the most engagement from employees, and can easily make changes to optimize the solution for all the companies using it. Vendors can also look at what is working and what is not, in order to simplify and streamline the process with programs that have proven effective.
Make it easy for the employee, too
While configuration makes it easy for the employer, you also want to make the use of technology easy for the employee. Look for vendors whose solutions offer single sign-on capability where an employee clicks one button and their identity follows them across multiple programs.
For example, a large employer may have multiple digital solutions that their employees might interact with, and in the past, this would have required multiple user-names and passwords. When employees face barriers or friction in enrolling or signing into a program, the odds of them coming back are exponentially lower.
According to a study from Econsultancy and Adobe, about 37 percent of companies’ respondents said the number of different touch points and the complexity of the user experience are two of the greatest barriers to an improved employee experience, especially when strict password policies often require complex passwords for multiple systems.
Ideally, your health benefits tech will offer employees one unified identification to navigate their benefits, making it easy to engage with your company’s multiple offerings.
How to win the HR digital revolution
It’s not enough for HR and company leaders to recognize the potential advantages that technology can bring to their businesses. Given the increasing demands from employees for more HR support, companies need to install configurable technologies that will best address their unique HR needs.
Potential benefits technology additions should be well researched by the decision makers to ensure that they are compatible with other systems and technologies already in place, ideally offering single sign-on capability.
The good news is, these new solutions can help companies better engage their employees in addition to reducing costs and increasing output, making it a win for everyone.