More than 55% of HR departments say they spend 11 hours or more every month manually transferring data to and from providers and HR systems. (Photo: Shutterstock)
The COVID-19 pandemic has led employers to deploy more resources than ever to human resources, in an effort to keep employees safe and allow them to continue to work—often from home. But that added investment comes with challenges on how to measure the effectiveness of these new efforts.
A new report from Thomsons Online Benefits outlines the issues around measuring HR data while delivering consumer-friendly benefits. Employers seem willing to invest in this area: in a survey of 542 HR leaders, the study found that 42% are spending 20% of employees' baseline salaries on benefits, which is the equivalent to more than $12,000 per employee (based on US averages for salaries). In comparison, just 26% of companies were spending that much on benefits in 2019.
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But this jump in spending has not been matched with an increased ability to track how the benefits are being utilized. The report said HR departments are hampered by too many data sources and that more than 55% of respondents spend 11 hours or more every month manually transferring data to and from providers and HR systems.
"We're seeing a serious disconnect between investment and measurable returns, which is undermining HR teams' authority and providing a blocker to further investment, said Chris Bruce, Co-founder and MD, Thomsons Online Benefits. "Within this context, it's incredibly concerning that many don't have the capability to capture and interrogate their data in a meaningful way, leaving them exposed when it comes to making decisions that could better support people where they need it most. If HR teams don't understand how employees are engaging with their benefits, how are they meant to know what they want from their reward packages – and how these needs change over time?"
Providing a better, more consistent experience
Survey respondents say providing a consistent consumer experience with benefits is a high priority, but only about half (53%) respondents said their company was able to provide that consistency. Many companies struggle with purchasing benefits at a global scale while still addressing local benefits requirements and preferences. Overall, there has been a 6% increase in employers' purchasing and administering benefits at a global level, the report said.
One finding suggests why companies may prefer a global benefits approach: employee engagement seems to increase when HR operations are fully centralized.
"This may be due to centralization leading to fewer errors—and therefore less frustration among employees," the report said. " And it could also be linked to the more consistent employee experience that employers can provide by centralizing their HR operations."
Improving the employee experience is an area that is ripe for growth, the study said. Just one-third (30%) of employees surveyed said their experience with employer-provided software was "great." Only about 40% said they were receiving a "consumer-grade" experience from their company's HR software, comparable to other consumer apps. Easy access, usually through one portal, is a key feature to providing a consumer-friendly experience.
"Providing a 'consumer-grade' user experience is associated with better outcomes and greater engagement with benefits," the study said. "Employees who are faced with several different pieces of tech, or worse, a mixture of paper and online processes, may never fully realize—or appreciate—the breadth and value of benefits on offer to them, even if the package is highly desirable."
Improve data management; improve HR delivery
The area of data management covers a lot of ground and presents many challenges. The report outlines concerns about data security, problems with manual data handling, overly-generalized data platforms, and a general lack of meaningful measurement in HR. These barriers prevent companies from gaining insights on how to best provide benefits to employees.
The report notes that collecting and analyzing benefits data is associated with higher levels of employee engagement but notes that many employers do not have effective data analytics. "The biggest problem is actually having too much data—or at least, data spread out across too many systems," the report said. "Almost two-fifths (40%) of employers say they have too many data sources and this makes analysis difficult. Almost a third (30%) also have concerns around the storage and use of employee data that prevents them from carrying analysis, while a similar percentage (29%) simply do not have enough time on their reward or HR teams to dedicate to data analysis work."
In addition to underlining the importance of more investment in technology and centralization of benefits management, the report notes that with the COVID-19 pandemic, businesses are realizing that they will simply not be able to return to business as usual.
"Employers should take this opportunity to re-evaluate their entire employee value proposition and how they position reward within their organizations—both to retain the loyalty of existing staff and to help re-hire talent lost due to the crisis," the report concludes. "Technology won't provide all the answers. But by implementing the right infrastructure—centralizing HR operations, for example, and providing mobile access to reward and benefits—employers can take a huge step towards creating an environment where benefits work for everyone."
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