Special thanks to ADP® partner, Nayya, for this article.
In today’s dynamic and ever-evolving workplace landscape, the role of HR leaders has undergone a profound transformation. No longer limited to traditional administrative functions, HR leaders are now important players in shaping an organization’s success. One of their most critical responsibilities is ensuring that employees are not just the workforce, but a core part of the company’s growth and progress.
As HR leaders, you understand that a key component of achieving this goal lies in maximizing employee benefits. Attracting and retaining top talent, enhancing job satisfaction, and promoting employee well-being are now inseparable from a company’s competitive advantage. To accomplish this, HR leaders must adopt a modern, forward-thinking approach that goes beyond conventional HR practices and adopts innovation and adaptability.
With nearly 65% of employers admitting that their workforce isn’t fully confident with their benefits selection, the likelihood of “status quo” benefits communication and education increasing employee confidence is slim.
This raises an important question: How can HR leaders drive benefit comprehension while maximizing employee benefits efficiency?
In this guide, we will share insights and practical tips, demonstrating how you can use technology to maximize efficiency and to help ensure your workforce is well-informed and engaged.
The challenges of traditional benefit administration
Traditional methods of communicating and educating employees about their benefits are becoming increasingly outdated. These approaches are not only time-consuming but also resource-intensive, making them less effective. According to Nayya’s research and various case studies, these outdated practices often lead to disengagement, leaving employees uncertain about their benefits and HR leaders frustrated with the lack of engagement.
In a recent Voya Financial survey, 35% of respondents said they didn’t fully understand the employee benefits they enrolled in during their recent open enrollment (OE) period. This rises among young employees, with 54% of Gen Y reporting they don’t understand their benefits selections.
Despite a significant investment in benefit programs, many organizations might not be seeing substantial improvement in employee engagement. This largely stems from a lack of employee knowledge and understanding of what benefits are available to them, what they cover or cost, and how to make the best decisions to support their unique needs.
As HR leaders, it’s crucial to recognize that the traditional “informing” approach falls short of meeting the dynamic and two-way communication needs of the modern workforce. In today’s communication age, it’s not enough to simply send out documents and hope they are understood and acted upon. Instead, HR professionals need to think about embracing dynamic, two-way communication to create more informed and engaged employees.
We believe there’s a wide disconnect between employees and employers, touchpoints, and the benefits journey that can create and perpetuate three flaws of traditional approaches to benefits administration.
1. Complexity
In a traditional benefits administration setup, employers often work with multiple benefits providers across multiple platforms, collecting data from multiple sources. The administrative burden can leave little time for HR teams to work on strategic tasks. This approach to employee benefits management is characterized by:
- Waning efficacy – Almost 75% of HR staff say they don’t have the tools and resources to perform their jobs well. Traditional HR departments are lacking automation, meaning more manual work and spreadsheets which come with increased errors, reduced productivity, and efficiency.
- Burnout within HR – Exhaustion and burnout are rampant in HR, with 42% of the teams underperforming due to the weight of too many tasks and responsibilities.
- Lack of strategic focus – Over 70% of HR teams indicate the majority of their time is spent on administrative duties, leaving little to no time to focus on high-value work.
2. Communication
Effective communication plays an essential role in ensuring the success of any benefits program. However, not all industries nor all employees are alike in how they prefer to receive information, and traditional communication strategies don’t allow for personalization.
When it comes to selecting benefits, employees often end up sifting through their employers’ intranet, scouring external resources, or asking coworkers, friends or family members for advice.
Unfortunately, traditional benefits administration is often characterized by:
- Inadequate educational resources – Less than 30% of employees view existing employer resources as helpful in meeting their benefits needs.
- Poor communication – SHRM cites that employers lose an average of $64.2 million a year due to lack of or ineffective communication.
The best approaches to benefits communication and administration use digital platforms, such as ADP benefits administration, analytics, and benefits decision support tools, videos, and digital assets, to communicate benefits effectively. These platforms increase accessibility and employees’ understanding of the benefits available, enabling them to save money and select the best-fit benefits.
3. Complacency
Combined, complexity and poor communication stand in the way of benefit programs meeting their full potential. They prevent employees from understanding the available benefits and choosing the options ideal for their unique situations.
If employees don’t know what benefits are available or how to select the right ones, they can make errors during open enrollment or decide not to participate at all out of frustration. This can result in underused benefits and potentially a lack of coverage in times of need.
Maximizing employee benefits efficiency with a modern approach
To address the challenges of traditional benefits administration, HR leaders should work to adopt an advanced approach that leverages technology and best practices. Here are some practical tips and strategies to enhance benefits communication and administration.
1. Understand how your workforce wants to receive information
HR leaders must understand the channels and types of communication that best fits their workforce. You might think that email, being the standard form of business communication, is the best option and opt for it, only for your emails to go unopened.
With five generations currently in the workforce, for optimal results, it’s important to consider differing preferences. That may mean hosting a mini webinar series, developing short digestible videos, posting signage around the workplace, sending text messages, and/or sending a series of emails in the weeks leading up to OE.
2. Tailor communications at the individual level
It’s important that you take steps to reduce the barriers to employees making informed benefits selections. But offering the same benefits experience to your entire workforce that has varying communication preferences and health needs can further perpetuate the issue.
Some benefits decision-support solutions can empower your employees with features like personalized benefits recommendations based on individual data such as insurance claims, lifestyle preferences, and financial needs.
3. Enable scalable processes
Most traditional benefits administration systems are not capable of handling the complex workflows of multiple benefits programs. An enhanced benefits management platform can help your organization to:
- Increase efficiency and consistency
- Reduce risk and human error
- Increase potential cost savings opportunities
- Increase organizational visibility through data sharing and analytics
- Improve benefits education and communication
To scale benefits administration processes in the organization, review your current systems and consider whether investing in modern benefits administration technology aligns with your organization’s goals and requirements.
Bringing it all together
The challenges of traditional benefits administration are evident, but the path to a more efficient and engaging benefits experience is equally clear. HR leaders can drive this change by embracing modern strategies and technology, such as decision support tools.
Based on the latest data, 70% of ADP Decision Support users felt it helped them save money on their benefits, and 75% felt more confident in selecting their benefits. HR teams can help lead the way in ensuring that employees are recognized as the driving force within the workforce, thereby nurturing a thriving and successful organizational future. By understanding employee preferences, tailoring communications, leveraging technology, setting clear communication timelines, and utilizing employee surveys, HR leaders can chart a course toward a more informed, engaged, and empowered workforce.
Learn more about ADP benefits administration services or get in touch with one of our experts.
This article originally appeared on SPARK powered by ADP.
