Why data is the new frontier for employee benefits
The increasing digitisation of society and business in recent years has ushered in a new wave of processes and ways of working.
The wide adoption of smartphones, GPS devices, wearables and social media is capturing more information than ever before, as part of what is now widely referred to as the Internet of Things.
This trend isn’t showing any sign of decline. Rather, it seems poised to accelerate as data-capturing devices become ever more sophisticated.
Employee data is everywhere
Employee data is no exception to the proliferation of recent years. An enormous volume of information is now available to employers hoping to learn more about their employees.
Employee datasets can span everything from personal details to employment status, attendance records, compensation information, recruitment details, training certificates, and performance. Surveys and communications tools can also give employers deeper insight into employee priorities, while benefits platforms can also offer a valuable data source.
For those companies looking to harness this data to help tailor their employee benefits programmes, this presents fresh opportunities.
Using data to shape benefits
When collecting employee data with a view to use it for decisions over the employee benefits offering, there are several factors for employers to consider. Firstly, it’s important that the data being collected can produce valuable, actionable insights.
To achieve this, organisations need to manage their databases effectively. This means collecting basic identifying information, such as name, age, race and/or ethnicity. In the case of employee benefits, it also requires organisations to track which benefits their employees receive.
When collecting information, it’s also vital for organisations to remain mindful of privacy concerns. The tools or software used to collect data should empower employees to determine which information they share through the inclusion of opt-in processes.
Employees should also be properly informed of how their employer intends to use that data, such as to drive productivity or improve work culture.
Companies are already using data
Many companies are already leveraging data to drive decision-making within employee benefits.
Lockton People Solutions recently took part in a project with a large multinational company to explore the potential to expand its company-funded medical insurance to all employees. To do so, the human resources (HR) function needed to understand the potential return on investment.
Using a broad suite of employee data, including overall employee population and absence statistics, the organisation was able to identify a sickness rate for its workforce. By combining this with medical eligibility data, the organisation was able to identify trends across eligible and insured, eligible but uninsured and ineligible employees. This could be cross-referenced across other data, including salary bands and the type of individual absences.
Equipped with the findings, the organisation was able to put forward its business case for expanding private medical insurance to all employees.
The role of data in a changing workforce
Data isn’t the only thing that’s changing, however. Several trends continue to shape the workforce, further emphasising the importance of effective data leveraging.
In particular, the Covid-19 pandemic has triggered shifting priorities among employees, with most now placing a greater emphasis on improved working conditions and a better work-life balance.
Efforts to address a lack of inclusivity in the workplace are also leading to a workforce that is increasingly diverse, with a broader, more specialised set of needs. By developing their use of data, organisations can work to better understand these needs, for instance, to identify gaps in benefit awareness among employees and shape benefit-related education.
In tandem, a shrinking labour base across many sectors is forcing companies to go to greater lengths to attract talent. In this climate, a well-targeted benefits programme can give organisations a much-needed competitive edge.
Benefits themselves are also changing, presenting organisations and employees with an ever-increasing number of options from which to choose and companies are exploring new ways to deliver benefits and minimise their administrative burden. The role of technology in employee benefits is expected to increase yet further.
As organisations look to respond to this shifting landscape, data will provide a vital tool.
In partnership with Lockton People Solutions
Lockton provides creative people solutions that make life better, for your business and your people.