The ways in which we offer benefits to employees have come a long way since the concept’s inception following the World War II tax exemption. Little did we know at that time, but it would shape the way companies compensate employees forever. Fast forward to the present, where change is happening faster than ever before and millennials have become the largest percentage of the workforce. Today, unlike when our parents dominated the workforce, people demand information and choice at the swipe of a finger. Bearing this in mind, HR teams have been slow to react, particularly as it pertains to employee benefits. In a world of ultimate consumerism, where people require an Amazon-like experience in all major decisions, benefit choices should be no different.
As an HR consultant, I get an interesting perspective on the pulse of our industry. After having conversations with HR executives at every type of organization, there’s a running theme as it pertains to benefits: The desire to digitize. In fact, according to Mercer’s 2019 Global Talent Trends Study, 75% of HR functions provide state-of-the-art digital tools to support employee development and 87% of HR leaders feel prepared to roll out new HR systems. Of course, this includes everything from more reliable HRIS systems to how we gather feedback to the talent acquisition process, and everything in between. However, the need for organizations to innovate the way benefits are offered should be a top priority for two reasons:
- To remain competitive in an extremely tight labor market, and
- To control the ever-increasing cost of insurance.
To not capitalize on innovations that help empower employees to make better insurance choices is to fall behind in both those battles.
The other important component here is the power of data. By shifting to a digital platform, HR teams can be updated with real-time data on all aspects of their population’s enrollment status. This can prompt quick decision-making that, in turn, may have a big impact. A good example might be an organization that implements a new HSA plan. Low enrollment may signal that colleagues don’t truly understand its advantages, and a communication strategy can quickly be created and executed by the team before the end of open enrollment. The power of collecting data is crucial to the success of any firm — another area where HR departments have fallen far behind.
If this sounds like an idea that’s in the clouds for your organization, you’d likely be surprised to know that digitization is a priority for many thriving companies. The same Mercer study also reveals that “three-quarters of organizations say they are still on the journey to providing a fully digital experience for employees.” Forward-thinking organizations realize that this is a crucial piece of the puzzle, even beyond employee benefits, and continue to move in that direction.
As HR teams tie any lose ends on 2020 strategy, this is an idea that needs to be discussed. By creating an Amazon-like digital experience for colleagues to make benefit choices, we collect crucial data and have the ability to educate the consumer. Not only that, but your colleagues will feel more engaged and appreciated by having choice and a platform to interact with — anywhere, anytime. In an age of disruption, organizations need to jump on this disruptive idea quick and lead by innovating. The benefits of such a change will be great.
A version of this article has also appeared on LinkedIn Pulse.
Tags: Talent Management , Benefit Programs , Trends