Data and insight will transform employee benefits to become a strategic lever, to attract, engage and retain high quality skills in the war for talent
Data and insight will transform employee benefits to become a strategic lever, to attract, engage and retain high quality skills in the war for talent. However, only 11% of HR and benefits leaders within UK organisations are fully satisfied with their current use of data and insight in supporting benefits provision and only 30% of businesses use data to measure return on investment in their benefits provision.
New research published today by Capita Employee Solutions – based on interviews with 200 benefits and HR professionals, 500 business leaders and more than 2,000 employees – highlights the heightened importance of data and insight as organisations focus on benefits and rewards to attract and retain high quality skills. 91% of benefits professionals believe that data is important in improving benefits provision within their organisations, and 84% believe that greater insight will give their organisation a competitive edge in benefits and rewards.
The role and scale of data and insight in benefits provision is set to accelerate rapidly over the next five years as wide-scale implementation of new technologies such as Artificial Intelligence and the Internet of Things will improve the quality and quantity of employee data that organisations can access. 95% of benefits professionals believe that having insight into employee motivations and aspirations would be useful in improving benefits provision, and 87% feel that having insight into external data such as banking and shopping behaviours, and data from wearable technology, would improve benefits provision.
95% of benefits leaders report that having insight into employee absence data and health insurance claims would help employers to offer more targeted and tailored wellness initiatives, as would having data and insight on employee working patterns and behaviours.
However, whilst benefits and HR leaders are optimistic about the potential impact of data and insight in the future, most are currently struggling to make the progress they would like. Two thirds now worry that their organisation is lagging behind its competitors in how it uses data in benefits provision. And alarmingly, business leaders cite benefits and rewards provision as the single area where their organisation is least effective in using data and insight to drive business outcomes.
Almost all of benefits leaders believe that enhanced use of data and insight can deliver better outcomes for organisations. The research found that a data-driven approach to benefits provision can improve workforce engagement and retention (48%); enhance employer brand (42%); increase the ability to attract high quality talent into the business (41%); and reduce administrative burden (35%).
Whilst nearly all UK organisations are already using data in some capacity to inform and optimise their benefits strategy, most are encountering significant barriers in optimising their use of data and insight. Three quarters of benefits and HR leaders report that they face challenges in turning data into actionable insight, and almost half (47%) point to budgetary constraints which limit their effective use of data and ability to derive real insights into employee patterns and behaviours around benefits. A third (31%) of benefits leaders say that they struggle to prove the ROI on benefits provision.
Beyond this, a third of businesses suffer from having fragmented and disparate data; and 31% are deploying outdated analytics technology. Other challenges include a lack of analytical skills within benefits teams (27%), difficulties in finding appropriate partners and technology vendors (31%), and ongoing concerns around data protection and security (30%).
Indeed, the research highlights a high level of awareness of the importance of effective data protection amongst benefits leaders – 88% report that they need to carefully consider the legal and ethical restrictions around greater use of data in rewards and benefits. This is particularly relevant to the use of new forms of data, such as GPS data, biometrics and social media profiles.
However, workers are overwhelmingly enthusiastic about employers using their personal data providing that it means they receive a more personalised employee experience. This includes everything from demographic data and Learning and Development information, through to performance appraisal information and details on aspirations and ambitions. Overall, almost two thirds of employees say that they recognise the value of their personal data as currency in exchange for a more personalised employee experience.
Gareth Pickles, Managing Director, Capita Pensions and Benefits, said:
“Benefits remain a largely untapped opportunity for employers to differentiate and drive competitive advantage in a fiercely contested employment market. New technologies such as AI and IoT are enabling employers to collect, monitor and, most importantly, analyse huge amounts of data about their workforce in a secure and ethical way, and provide the insight required to create compelling and personalised benefits packages for each employee. This will not only engage current workers but also attract the very best talent into the business.
Pickles concludes: “Benefits should be delivering more, not only to employees, but also to employers, deployed in a strategic way to drive better business outcomes, whether that is increased engagement, retention or talent acquisition. Employers already have most of the data sets that they need to engage with employees, based around their individual preferences, performance and personal aspirations, whilst employees are crying out for a more personalised experience at work. The use of data and insight is therefore set to become critical in determining and differentiating the future employers of choice and employers need to act quickly to ensure they have the tools, processes and skills in place to drive competitive advantage in this area.”
The full research findings can be found in the white paper, ‘The Insight Edge in Employee Benefits’, which is available for download here.