Data analytics – how can it deliver value for employee benefits?
11 May 2015
Many companies think about the employee benefit market as lots of boxes that when opened up have a benefit inside of each. The lid opens up once a year, the benefit is taken out, dusted down, renewed and put back in the box with a loud thump on the lid.
But could these workplace benefits be working more effectively for employers? Could they, in fact, increase employee engagement? It is important to choose a selection of benefits, that your employees want, those that provide the most value for the company, and all at the appropriate cost.
In a recent PwC survey, respondents were asked to rank their favourite workplace benefits and their answers revealed widespread variations in choices, by sector, age, and gender. Tax efficient benefits that helped with the cost of living or mortgage rates were high in people’s minds when considering new benefits. Women showed a preference for medical insurance and childcare, while men favoured long-term savings plans and company cars.
Maintaining or introducing benefits that are not perceived as valuable by employees will have little, if any, impact on the health and wellbeing of your workforce. Regular reviews of overall employee benefits provision and spend will enable you to optimise a blend of benefits that help to deliver your business, HR, wellness and Occupational Health objectives.
Understanding your employee benefits data is therefore becoming increasingly important in targeting benefit spend and measuring employee engagement on both a UK and global basis.
As we move towards increasing customisation of benefit packages, knowing how your employees are using their benefits and where the cost risks lie could pay dividends. Rigorous data analysis will help you understand employee preferences, enabling you to better target benefits to roles, whilst controlling what is usually a significant budget spend.
If you were thinking that this has always been a critical aspect of the employee benefit market, you’d be right. So what has changed?
The answer is our ability to collect and interrogate data in ways that have historically been the preserve of consumer marketers. We can now apply sophisticated data analysis to more fully understand benefit usage, employee motivation, and employee habits.
A recent example is a company with a benefits budget for musculoskeletal conditions, accounting for 45% of their total spend. A new pathway was implemented enabling members to access services without having a GP referral. Patients are now triaged to a physiotherapist to carry out an initial assessment and determine the most appropriate treatment path from there. The musculoskeletal benefit spend was reduced by 15% over the following 12 months.
Analysing the data on a micro level across your employee benefit schemes enables human resources to comprehensively assess the level of risk to the business and tailor benefits that support both employers and employees’ specific needs, coordinating approaches across multiple providers.
Early analysis of this data is critical to understanding what drives spend, especially within more expensive benefits such as private medical and long-term disability cover. By analysing usage data, businesses can ensure that effective interventions are in place that contribute to employee engagement, provide effective cost management and enable companies to measure the return on their benefit spend.
If you are interested in learning how PwC can help you realise more value from your benefit spend, contact Naomi Saragoussi on 020 8704 4704 or by email: [email protected].