Ways technology is supporting a more personalised approach to reward and employee benefits

The rise of flexible benefits has only been possible with technology based solutions

When it comes to benefit provision, most of us accept that a one-size-fits-all approach is not the best way to get employees engaged, hence the rise in popularity of flexible benefits. It makes sense given that employees’ individual needs are diverse.

But the rise of flexible benefits could only have been possible with technology-based solutions that allow individual choice without sinking the HR and payroll departments. And as technology has improved, so has the breadth of choice increased: technology is the enabler of choice and personalisation.

But this level of technology hasn’t yet fully landed in all areas of employee benefits, especially in pensions. Despite the advancement of technology in most other sectors, the pensions industry in general continues to lag behind and this is stopping much needed personalisation and choice.

Choices about pensions need to be relevant

When it comes to pensions, an employee can only really make an informed decision if their choices are presented in the context of their own situation, and in a relevant way, and it’s easy for them to execute their decision. Inertia prevails in pensions and so any difficulty in taking action is likely to stop someone. People don’t tend to engage with complex and difficult things unless they have to.

A perfect example of this might be the issue of deferred small pension pots of which, according to Pensions Policy Institute estimates, there will be 27 million by 2035. Is this a result of inertia or a too complex a transfer process? According to Cushion’s own research, 37% of employees agreed that they had not consolidated all their pensions because it was too difficult.

Digital technology makes it easier

But with new digital technology, it’s possible to offer a smooth, paperless transfer process that feels easy. You can nudge someone when they join a new company to think about what they are going to do with their pension pot from their previous employer. Personalisation is also about timing - giving someone the right nudge at the right time.

Another great example of personalisation supported by technology is the growing concept of pension redirect which enables employees to choose to have some of their pension contributions over and above auto enrolment minima paid into a workplace ISA.

It’s a great concept as it allows employees to balance their short to medium-term needs with their longer-term needs such as retirement. They’re empowered to set their own saving priorities, but always with the safety net of saving for retirement at the minimum level.

But for it to work effectively, it must be enabled through technology. In summary, the employee needs to see relevant options and what these mean to them and an easy way to select the option that best meets their needs. Digital technology and, more specifically, a mobile-first experience like a mobile app makes this process seamless, in fact without it, I’m not sure it can work.

There’s no doubt that the more personalised we can make employee benefits, the more they’ll hit the mark and the more impact they can have on recruitment and retention. After all, what’s more valuable and engaging – a long list of benefits (some of which may not be appropriate) or the ability for an individual to see and create their ideal package? Personalisation is essential in today’s world and it can only be delivered with technology.