As businesses adopt a more data-led operating model, the C-suite is placing increasing pressure on HR professionals to understand and report on all kinds of talent questions. According to PwC’s 15th Annual Global CEO Survey, in 2012, over 80% of US CEOs said they needed critical talent-related insights to make business decisions. When surveyed this year, still only 46% said their companies always used data analytics to indicate how effectively skills are being deployed.
The board’s thirst for talent data is unlikely to abate any time soon and HR will need to evolve its analytics competencies to address this challenge. While strides are being made in HR analytics, until now, the realm of benefits and reward data has remained largely unexplored. Employers are missing a trick here by not taking the opportunity to demonstrate their knowledge of, and care for, employees. When employees feel understood and appropriately rewarded, they will be more engaged in their work, and more likely to put in the discretionary effort that drives up business productivity and client satisfaction.
The problem is that, despite having a wealth of benefits data available to them, many decision makers in global enterprises have not had visibility of this or the capability to analyse it effectively to inform their reward packages. This is surprising when you consider that benefits make up a significant percentage of total reward. In the UK, benefits spend is on average 11% of employee salary, and in many cases exceeds this.
Part of the problem is that many organisations are using disparate data streams and legacy systems when it comes to their reward schemes. It’s incredibly difficult to combine data from these, or analyse it to deduce any valuable insights. In fact, according to our research, 48% of businesses worldwide are struggling to report globally on their workforces. However, with the right technology in place, HR teams can gather a single source of truth for global reporting. The information can then be used to better control benefit spend budgets and build effective employee engagement plans across countries. It also gives HR staff the ability to see the uptake of benefits across demographics or evaluate the costs of a particular benefits stream, such as wellbeing.
Dialling-up the detail on costs
Benefits data analysis can lead to significant cost savings for employers. By taking data from the different countries and regions they operate in, employers can analyse this to find out their liabilities in different areas. Retirement plans and medical expenses in specific geographies can be costly, so being able to identify where employees are less interested in these benefits presents a significant financial saving opportunity. In the UK for example, healthcare protection benefits such as life insurance and medical cover are continuing to escalate above inflation, making it imperative that organisations continually evaluate the effectiveness of these schemes for differing demographics.
Driving employee engagement
Looking at data trends in benefits take-up also enables employers to identify the types of benefits that appeal most to their workforces. If they’re seeing high levels of interest in discount schemes for example, the likelihood is that providing more of these will be well received by employees. This in turn has a positive knock-on effect on employee engagement – something that our research indicates is a problem for 30% of global companies. Employees will appreciate their scheme more and the effort their employers have demonstrated in considering their specific needs, which in turn can provoke greater discretionary effort. Designing a scheme that people really value is therefore critical to maintaining a fulfilled, productive and successful workforce.
Tailoring communication strategies
Beyond this, data analytics is helping businesses to develop targeted strategies for communicating their benefits offerings. As employers are able to interrogate data to work out when staff are most engaged with their benefits packages, they’re able to target communications to certain times of day. For instance, if a certain demographic accesses their benefits regularly on a Sunday night, this could present a good opportunity to tell them about new discounts. This is of particular importance for employees that do not have access to a computer at work, such as those in the retail or manufacturing sectors.
In addition, HR teams can analyse this information to assess the effectiveness of communications strategies. If an HR team is running a wellbeing campaign for example, they should expect to see a positive data correlation in relation to both preventative and protective healthcare benefits uptake. This means that a successful campaign should result not only in more people enrolling in a health insurance scheme, but also increased uptake of other benefits, such as health checks or cycle to work schemes. If this is not evident, a problem may well lie in their communications strategy.
While data analysis may seem impersonal, in reality it presents organisations with endless opportunities to individualise their benefits offering. Taking a data-driven approach will enable businesses to reduce costs, while creating a tailored benefits experience for a diverse, global workforce. It has the potential to alter dramatically how businesses reward their staff and impact their lives in a positive and profound way.