How technology is supporting the drive towards benefits personalisation

Employees increasingly want rewards and benefits that are tailored to fit their wants and needs and organisations need to use technology that lets them do that

Engaging directly with employees is a challenge for all HR leaders and teams, and the need for effective engagement has never been more important. The world of work is constantly evolving and with it comes changing expectations employee ambitions.

Publishing total reward data and education via total reward statements is as relevant as ever. The business case for using it as an attraction and retention tool is still solid, especially when using it to educate beyond the numbers within total reward.

Combining the monetary value across the full total reward investment, with educational information promoting all non-cash rewards, all in one elegant platform, ensures employees are fully informed. The old adage of ensuring employees know beyond their base salary and consider all those additional rewards with value and satisfaction is vitally important in a world of the Great Resignation.

Employees feel better able to cope financially

The advantages of educating on non-cash initiatives right next to monetary programmes is well illustrated with CIPD’s 2022 research. It found that where employers have financial wellbeing policies, their employees feel better able to deal with bills (70% v 58%) appreciate their benefits (70% v 28%) and can save towards retirement (61% v 41%). Implementing and promoting these programmes effectively is the key to that success.

The usual channels of technology delivery remain – ie, desktop, mobile, tablet – to cover all office based and remote based colleagues. The platform should, of course, be accessible 24 hours a day, 365 days a year.

Annual enrolment season would mean benefits selections and updates being made by employees (ideally within the same technology as the statement) can include the current position of their total reward and how this is affected by the new selections. This could also be done during or soon after annual pay review and bonus season.

With many rewards linked to salary, a merit increase usually has a significant impact on total reward too, with total reward having the effect of lifting a 3% pay increase to 5%, for example. This is important for the employee to know, as well as for the business to monitor total people costs.

Next evolution in total reward statements

According to research by REBA/Howden, 85% of organisations will be focused on personalisation by 2024. Making sure enterprise technology is ready will be vital.

The key to using technology in improving total reward statements goes beyond the one-way ‘push’ to employees.

By requesting detailed feedback from employees on each reward programme, measurable and actionable insight across sentiment, effectiveness and satisfaction can be obtained. This moves organisations towards the holy grail of understanding return on investment in that reward. If significant numbers of employees are telling you they do not value a particular reward programme, it’s a waste of money.

The next step forward is using the same platform to provide increased choice and personalisation across the reward package. There are myriad reasons why this is trending, not least the rise in diversity, equity and inclusion initiatives and the demand for fairness.

Choice and personalisation can mean anything from traditional flexible benefits or annual enrolment, through to more micro changes (for instance, swapping rewards based on the feedback received), all the way through to increased flexibility within compensation as well as benefits (for example taking less bonus this year and investing it in equity instead).

The insights gathered by this approach can be tracked and analysed for effectiveness and improvement opportunities. The alternative is inconsistent generic employee satisfaction surveys, where reward as a topic can be lost among other HR initiatives. This focused ‘Rate my Reward’ approach also ensures organisations have visibility and control of one of their largest expense categories.

Hyper-personalisation like Google and Amazon

We are increasingly hearing organisations wanting to treat their reward programmes in the same way that large service providers like Amazon or Google would treat their products and services. These providers use AI technology to filter masses of text and scoring to provide sentiment insight into the effectiveness of their products and services, which in turn ensures they continue to what customers want and are ready to respond to changing demands and trends.

In the same way, HR departments are increasingly looking to achieve the same understanding with their reward ‘products and services’ that they provide to their ‘customers’. This is leading edge and starts with that first ‘push' of a total reward statement baselining the current state.

Employees increasingly want personalisation across their rewards, in the same way they do in all other aspects of their lives. Employees compare what they can purchase on the open market using comparison technology we all use every day for items like car insurance.

The trend over the last decade has been for organisations to use technology tied to benefit brokerage. That business model provides employees with a set of pre-brokered benefits to choose from which do not reflect what benefits, nor the level of personalisation, they want. In many cases employees would prefer to take the cash-equivalent instead and purchase the covers and benefits themselves elsewhere.

As employees move roles more frequently than ever, this reduces wastage in the administration by allowing employees to retain personal arrangements throughout their career, instead of leaving one scheme on exit from an organisation, only to join a similar scheme on joining the new one. The administrative costs can be greatly reduced.

How to get started with personalisation

Increased personalisation comes with great responsibility. The safeguards for organisations to ensure financial health and financial wellbeing for their people rightly remain in place.

However, organisations are increasingly taking that first step by gathering reward policies in one digital inventory, obtaining visibility and insight into that spend, communicating and educating through reward statements and building oversight on sentiment and effectiveness. This then uses evidence and data to inform their next generation of reward personalisation strategies.

It is a hugely exciting time for reward technology and strategy.