Over half (58 per cent) of reward and employee benefit specialists see predictive analytics as a game changer in the industry
The use of advanced predictive analytics is set to grow as employers recognise the value of analysing employee data to predict future trends and needs of their workforce. This is one of the key findings from a poll of 212 reward and employee benefit specialists conducted by the Reward & Employee Benefits Association (“REBA”) in association with JLT Employee Benefits.
Although only a minority of reward and benefits professionals currently use predictive analytics, the majority (58 per cent) believe that the using data mining, statistics, machine learning, and artificial intelligence to make data-based predictions about the future is an industry game changer, drastically increasing engagement with workplace rewards and benefits.
However, despite the desire to exploit the full suite of current technologies, nine in 10 are using generic spreadsheet software such as Microsoft Excel to manipulate their data, limiting organisations to producing fairly basic analyses with little actionable insight on what their employees want from their benefits package. When choosing a supplier to augment or replace their existing network of platforms, unsurprisingly, user experience came out as a top priority with 68 per cent of respondents citing it as being of greater importance than price.
Debi O’Donovan, Director at REBA, said:
“Employers recognise the value inherent in the data they have, particularly if they can use it to predict which benefits will have the greatest positive impact on their workforces, or how reward strategies correlate with indicators such as performance, leadership effectiveness or profitability. If employers are going to embrace this field more fully and achieve their ambitions, they clearly need to upskill themselves, their HR and reward teams, while also taking a longer-term view on the benefits of investing in technology for recruiting and retaining top talent.”
A significant challenge facing the rewards and benefits function is the proliferation of platforms acting in isolation of one another. Three in five respondents (60 per cent) have three or more separate reward and employee benefits technology platforms, with 58 per cent of those with multiple platforms requiring separate log-ins.
Andrew Drake, Consulting and Proposition Director, JLT Employee Benefits, commented:
“The seamless integration of reward and benefits platforms is key to helping organisations move away from a disjointed and cumbersome approach to accessing real time, accurate information across all pay and benefits. Our aim is for both employees and employers to get the same user experience from their reward software as they do using technology in their everyday lives. With the implementation of GDPR coming into force in May 2018, companies will also have to be mindful of consent, ensuring all platforms are offering employees opportunities to opt out of sharing data at each point in the process.”
When asked about top strategic priorities for 2018, personalisation of employee communications came out on top with more than a third (38 per cent) saying this is their focus. Relevance and timeliness of the benefits on offer was also highlighted in the survey as nearly two-thirds (65 per cent) think technology can help increase employee understanding of the value of the reward.
“One-size-fits-all and even segmentation is being replaced as employers try to appeal to, and engage with, increasingly diverse workforces”, said Debi O’Donovan.
“This is exacerbated by very different needs of the student debt-ridden younger workforce trying to get onto the housing ladder, versus the older employees grappling with pension freedoms and retirement.”
As the concept of employee wellbeing has grown in popularity over the past few years – with a growing focus on the impact of workplace stress on mental health – investment into wellbeing and financial wellness platforms is set to increase dramatically. Around half of respondents (48 per cent) are either currently developing their employee wellbeing platform or plan to implement a software solution by 2020. In addition to this, 61 per cent have a financial wellness platform under development or plan to have one in the next three years.
Andrew Drake, added:
“Employers are aware that staff do not look at their personal affairs in silos, so the ability to see, and potentially model, decisions across a broad spectrum of areas covered by their benefits is highly appealing to those wanting to engage staff in their reward. More broadly, the offer of flexible holiday time, working hours and other wellbeing benefits all feed into a competitive environment where employees are now looking for a company that is modern, forward thinking and planning for the future.”
 (i.e. developing models to predict how benefit choices are likely to change over time due to workforce changes or market forces)