Personalize benefits for greater impact

The benefits focus is shifting to one that suits individual needs and life stages, spanning both design and delivery of benefits programs.

Updated: Oct 9, 2017 09:38:40 AM UTC
shutterstock_sm
How can you make sure personalized programs have the greatest impact (Image: Shutterstock)

As companies face competitive pressure to retain talent, personalization of benefits can act as a key differentiator. Moving away from a one-size-fits-all approach involves tailoring benefits programs to the needs of individual employees. This may involve either providing more flexibility in the types and levels of traditional benefits employees can choose or offering a suite of voluntary benefits programs. When focusing on the latter, how can you make sure personalized programs have the greatest impact?

Companies are facing opposing pressures to drive employee engagement and to manage rising costs.

61% of employers say that benefits are very important and receive full management support as part of total rewards strategy.1

81% of respondents face benefits costs that are greater than 10% of total payroll.2

Companies are expecting an 18% annual benefit cost increase over the next five years.3

Companies have always looked to market benchmarks to design and deliver their benefits programs. Most companies surveyed by Mercer continue to review competitor programs and iterate on their own programs based on those findings. Although this is important for companies struggling to win talent over their competitors, engaging employees goes beyond market benchmarking — it also involves looking within. Innovative companies are adopting a customer-centric approach in designing benefits, with “customer” being replaced by “employee.”

Why New Benefits Programs Fail
One of the biggest challenges companies face when rolling out voluntary benefits programs is getting employees to participate and engage over the long term. In these cases, HR must ask whether employees really want that benefit (customer-centric), or whether the company thinks the benefit will give it a competitive edge in attracting talent (company-centric).

Take the example of wellness programs. Initiatives that directly benefit the employee in terms of reduced benefits costs, such as checkups and biometric screening, see plenty of participation, but the take-up rate for other, activity-based initiatives is often low. The reasons cited vary from “I was busy at the time” to “I didn’t think I needed it” to “It was too difficult to participate.” Yet companies continue to offer programs that are not based on analysis of employee needs. Personalized design implies integrating employee experience and using analytics to create more employee-centric, meaningful programs.

How To Improve Participation Through Personalization

1.    Tailor to Population Health
Develop a tailored program based on a specific, high-risk group and its unique health needs. Organizations can connect onsite facilities like gym membership and medical checkups with data relating to absenteeism (or presenteeism) and incorporate employee feedback to design more meaningful programs. A quick health risk assessment (HRA) that does not use key findings at the aggregate level to design programs focused on effecting behavioral change is of little value — long-ingrained habits like smoking and a sedentary lifestyle are difficult to tackle with a series of questions that return a “wellness score” at the end of the exercise. Furthermore, independent programs like these are often implemented by different vendors, which tend to work in silos. This either leads to overlap or gaps in care. By choosing a specific segment of your population to focus on, you can concentrate resources on programs that create real results for the employees who are most in need.

2.    Use Analytics to Find Out What Employees Want
Although employee surveys are traditional ways of getting employee feedback on various programs, analytics and big data can also be used to understand employee behavior and needs. Retail companies like Walgreens and Kroger and airlines like Delta and Southwest have effectively used big data analytics to predict consumer behavior. The same principles can be extended to understanding employee behavior. Analytics help identify inadequacies in benefit levels, zero in on key benefits based on utilization, monitor and evaluate programs, and forecast the future more accurately.

3.    Communicate the Way Your Employees Do
Equally important for personalization is the “last-mile delivery” of programs, both in terms of communication and employee experience. In an era of looking at “value for money” and return on investment, companies are under constant pressure to deploy scarce resources to effective programs — but these can fall flat if not effectively communicated. Although email continues to be the most popular means of communicating, companies have started looking at other channels, such as webinars, podcasts and mobile apps. After all, mobile devices are the one thing employees have with them all the time.

Note that different generations have different priorities and favored ways of communicating. By personalizing your communication approach, you help create authentic engagement that turns into action.

Personalized benefits are no longer a useful perk for attracting talent — they are increasingly the bread and butter of employee benefits programs. Today’s employees expect innovative offerings that are tailored to their needs beyond a basic nuts-and-bolts medical plan. At the same time, companies are finding that by paying attention to employee experience, they increase the effectiveness of their programs, thereby lowering costs in the long run.

1 Mercer’s 2016 Asia-Pacific Benefits Under the Lens Survey
2 Mercer’s 2014 Asia-Pacific Benefits Snapshot Survey
3 Mercer’s 2016 Asia-Pacific Benefits Under the Lens Survey

-Preeti Chandrashekhar, Retirement & Health Benefits Business Leader, India, Mercer
Preeti has more than 25 years of management consulting experience in insurance, retirement and other employee benefits.

The thoughts and opinions shared here are of the author.

Check out our end of season subscription discounts with a Moneycontrol pro subscription absolutely free. Use code EOSO2021. Click here for details.

Post Your Comment
Required
Required, will not be published
All comments are moderated