Data is an integral part of business strategy – and HR is no exception. Business leaders expect their HR teams to be able to understand and report on all aspects of employee satisfaction and retention. According to PwC’s 15th Annual Global CEO Survey, more than 80 percent of US CEOs reported they needed critical talent-related insights to make key business decisions in 2012. Yet, when these CEOs were surveyed again in 2016, only 46 percent said their companies used data analytics to gather these all-important insights.
So what can HR teams do to satisfy the C-suite’s need for data? While some advancements have been made in generic HR analytics, benefits and reward have remained largely unexplored. This is a huge miss. The potential for using data to determine the effectiveness of benefits and reward programs is huge, as when employees feel appropriately rewarded and that their benefits meet their needs, engagement and productivity dramatically improves.
The problem doesn’t lie in a lack of data. In fact, many companies have a wealth of benefits data available to them; companies just aren’t analyzing what they’ve got effectively enough to inform their strategies.
Ask the right questions
Start by knowing what questions to ask – do people know what they need to find out from their benefits programs, and are they being ambitious enough in the insight they seek? To get value out of benefits analytics, companies must start by defining the problems they are hoping to solve with data analytics.
It has to start at the CEO or COO level defining the strategic benefits related questions that are important for the business to be able to answer. That then gives the HR and benefits team a hypothesis to test. Questions could include: Can employees be guided to make better decisions that impact their lives in the long term? What will our spend on benefits be in 5 years and why? These questions then provide the foundation and guidance for all the analyzing to come.
Get ahead with tech
The issue is also rooted in multiple streams of data and outdated systems that organizations are using to manage and report on their benefit plans. This makes it incredibly difficult to compile and analyze the data, making valuable insights pretty much impossible. In fact, according to our research, 48 percent of businesses worldwide are struggling to report globally on their workforces. This isn’t surprising. Global benefits management is inherently complex, often involving manual administration, multiple systems and many different benefits varying from country to country.
However, if HR teams have the right technology in place, they can gather and analyze worldwide benefits data in one place. This information can then be used to better manage benefit budgets and establish effective employee engagement initiatives across countries. This data also allows HR teams to identify uptake patterns within different demographics or validate the spend on a particular area, such as well-being.
Improve employee engagement
Unsurprisingly, providing benefits that employees actually want positively impacts employee engagement. Given that only 32 percent of US workers are engaged, the ability to tailor benefits offerings to employees’ needs has a real impact on levels of employee engagement.
Our recent research found that employees who feel their individual needs are supported by their employers are twice as likely to recommend their employer to a friend, say they have a positive experience at work, and be proud to work for their company. Developing a benefits plan that people really value is essential to creating a fulfilled, productive and successful workforce.
In addition to helping organizations build better benefits plans, data analytics can also help them communicate their offering to employees more strategically. Analytics allows employers to identify which communication methods are most popular with their people. For example, if a certain group of employees access their benefits most on a Sunday night, it makes sense that they receive relevant benefits information on the same day. This is particularly important for employees that don’t have access to a work computer, such as those working in retail or manufacturing.
HR teams can also use data to assess the effectiveness of their initiatives and communications strategies. If an HR team is running a wellbeing campaign, for example, increased uptake of both preventative and protective healthcare benefits is expected. However, a successful campaign should result in both more people enrolling in a health insurance plan and an increased uptake of other wellbeing benefits, such as health checks or cycle to work offerings. If the data shows that this is not the case, teams can take immediate action to adjust their approach.
On the face of it, data analytics may not immediately appear to be the key to humanizing benefits. But it presents a unique opportunity for companies to make the most of benefits technology and use the rich set of data they have access to, to tailor their benefits offerings to the individual needs of their people. Adopting a data-driven approach to benefits enables businesses to cut cost, while building a customized benefits program for a diverse, global workforce. In doing so, employers build and maintain a market-leading employee experience, creating a more personal and impactful approach to benefits.
Chris Bruce is co-founder and managing director of Thomsons Online Benefits.