Business has entered a new age when it comes to providing and managing employee benefits. Fifty years ago there were few options in health care as well as investment and retirement plans. CEOs, whether they were of mom-and-pop operations or multimillion-dollar conglomerates, essentially made the decisions on what was best for their workers.
The paternalistic era is pretty much gone and today employees want choices to fit their lifestyles. Their decisions are now practically based on their ages, the make up of their families, aspirations, etc. One size does not fit all. For business owners and managers, benefits administration technology allows them to navigate the increasingly complex array and levels of these necessities.
Is Benefits Administration Technology Worth the Cost?
The looming question is whether benefits administration technology is worth the cost and effort to enhance employee satisfaction. Technology may be challenging for you, but it can do the job more efficiently for most businesses, and there are fewer opportunities for miscommunication with your workers.
As for the employee experience, Employee Benefit News published a study which concluded that giving employees control of their health benefits motivated them to participate at greater numbers in wellness programs. That translates into less sick time and greater productivity.
The elephant in the room, for most businesses, especially relating to skilled workers, is retention. A Forbes article in 2014 made a convincing argument for changing jobs after two years. The data suggested that moving to another company yields a higher salary boost than the average 4.5% increase top performers earn. Leaving, the report explained, can mean a 10% to 20% pay increase.
However, several sources suggest retention does not depend solely on wages. According to a study published by Entrepreneur, young people focus more on salary than older workers do. It is no mystery that turnover is lower when businesses concentrate on employee contentment — and benefit packages are often one of the deciding factors in whether to grow within their organization or leave.
Whether benefits administration technology will give your employees a better experience depends largely on how many of the workers will, or can, use the system.
A U.S. Census report showed that those with higher salaries (more than $50,000) and children in the household were more likely to have desktop or laptop computers (more than 92.6%) with high-speed Internet access (more than 83.8%). Those who had household incomes below $25,000 were less likely to have access to a home computer (62.4%) and high-speed Internet (47.2%).
Not everyone will understand “cafeteria” benefits, and someone will likely need help with the abundance of choices. Whether a company is small, medium, or large, your choices will probably come down to two: going it alone or using a third-party benefits administrator. Employees today are savvier and expect to have access to their benefits via their smart phone. Most benefits administration technology providers today have invested in their mobile capabilities to stay current with employee demand.
Some businesses worry about the cost of adding new technology. Benefits administration technology has been shown to contain administrative costs, pay out more rapidly than manual methods and make fewer errors. Aside from the aforementioned, a poorly designed or malfunctioning platform can be a source of liability if a claim is improperly paid, delayed, missed, etc.
Giving employees a system that is too complex will complicate matters, not improve the situation, which brings up another consideration: Educating workers requires more than handing out a leaflet or directing them to a website. Who is going to explain what each choice means? Will it be your human resources department? Do you have an in-house benefits advisor? Does he understand and have expertise in the system? How many additional personnel will you need to accommodate your staff during open enrollment periods or bringing on new hires?
Benefits administration technology is the answer, but you do not have to own it. As mentioned previously, that is the role of a third-party benefits administrator. It can be a reasonable solution to keeping up with the latest technology, as well as letting workers maintain their autonomous benefits selections. There are enough benefits solutions available to you and your employees, working in the cloud. That means you do not have to dedicate space to equipment.
A recent Price Waterhouse white paper on total cost of ownership for HR and benefits administration systems reveals the price tag for keeping it all in-house is rising significantly, with small and mid-sized companies spending close to $2,000 average per worker for maintaining current structures. Considering it costs an average of $10,000 to train a new hire, the choices seem evident.
Getting back to the initial question: Should you consider new benefits administration technology to boost the employee experience? The answer is a resounding yes!
If you would like to discuss your benefits administration technology platform in more detail, please contact an Alltrust Specialist now.