Cost savings top driver for benefits technology use: report

The top drivers for using benefits technology include reducing costs (36 per cent), better control or management of benefits data (35 per cent), improving benefits communications (29 per cent) and providing a better experience for employees (27 per cent), according to new research by the business research organization LIMRA.

“. . . One of the biggest things is to make their lives easier; it reduces staff time and resources that are necessary to administer benefits from the employer’s perspective,” says Kimberly Landry, assistant research director for workplace benefits and author of the report.

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According to the research, which surveyed more than 1,400 employers in the U.S., the most popular use of technology in human resources functions is payroll administration (70 per cent). However, respondents also use technology for their benefits enrolment (47 per cent), retirement benefits administration (30 per cent) and absence management tracking (21 per cent).

“With this study, we really wanted to get a broad picture of all of the different HR-related functions companies might have technology for and then see how they fit together,” says Landry. “That’s why we included payroll and that was obviously the highest — and also the only kind of technology that was very prevalent even among the small business community.

“An interesting side note on that is, when you ask companies that don’t have technology for their benefits where they want to get it from, payroll providers are a top source that they name.”

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Three-quarters (75 per cent) of respondents that use benefits technology said they’re satisfied. However, employers are more satisfied (81 per cent) with their benefits enrolment or administration technology if it’s able to handle all of their benefits on one platform. Additionally, satisfaction seems to increase as companies add more benefits technology functions, including enrolment, administration and communication.

However, 25 per cent of employers are still interested in switching to a new benefits platform. They would be most likely to switch to obtain a better price (37 per cent) or improved data security (22 per cent) and to have a system that handles all benefits (17 per cent).

Just 22 per cent of respondents take advantage of technology for benefits education and communication. Despite this, respondents believe it’s important the benefits platform includes employee communication or education (65 per cent), that it provides holistic communication of all benefits (59 per cent) and that it be able to customize communications to different employee populations (58 per cent).

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One of the big opportunities for benefits technology, according to Landry, is the ability to integrate more decision-support tools for employees. “We’ve seen from a lot of our research that employees realize they’re kind of confused, they don’t really understand benefits all that well, . . . they really want people to tell them what to do, what they should select,” she says.

“. . .Whether it’s cost comparisons or cost estimators — there are a lot more advanced tools now that companies are developing that ask employees a series of questions about their life situation, financial stability and their level of risk-taking, which helps make recommendations for them, based on that data.”