Information technology is becoming ever more important in the provision of benefits and reward. Nick Golding looks at the state of the art and what’s coming next.
When the calculator was invented, hardly anyone considered that one day it could be built into a wrist watch, and when the first mobile phone came onto the market, no-one truly believed that in years to come the small hand-held device would also double up as a camera and television.
But technological advances such as these have been re-shaping the world we live in for many years, and the world of employee reward is not excluded. As more technology is woven into the provision and management of staff perks, the look and feel of those benefits changes.
One of the key influences technology has had is around communication, as employers are no longer forced to print out thousands of total reward statements that are out of date soon after they are printed, says Sean McSweeny, a principal consultant at AWD Chase De Vere.
“The key thing that technology is allowing today is easy delivery of an employee’s total reward package. There is an increasing amount of effort going into getting total reward information online so that staff have easy and regular access,” he says.
Webcasts are also being used in the benefits arena, so companies with a large, widespread workforce are not restricted to communicating new messages on reward to the minority of employees who can make it along to a meeting.
And this information is not only more readily available using new technology, it is far easier to digest as well, because detail on the more complex perks such as pensions and share schemes can be drip-fed to staff, not packed into one daunting, paper-based booklet that is more likely to be binned than read.
James Kirkland, head of group pensions at O2, says: “Flexible benefit and total reward websites offer a new level of depth. If you gave someone the same information in a booklet, you’d just overawe employees – it just becomes too much in a 300-page booklet. But technology, if layered properly, overcomes this.”
Touch-of-a-button access to information on benefits that change constantly, such as share schemes, is another advance. Employees have the power to see exactly what their benefits are worth in ‘real time’, which drives their interest in benefits, but more importantly permits staff to take control through informed decisions.
“There will always be people that are passionate about controlling their own money, and making decisions around where their money is going. This will be a continuing theme: [using technology to] empower employees to make their own decisions,” adds McSweeney.
This control should not be confined to a workstation either, and the emergence of third generation wireless (3G) technology, which allows individuals to connect to their benefits website via a mobile phone, is set to have a huge impact on the way employees access and make changes to their benefits.
Although still in its infancy where benefits are concerned, a 3G system that allows staff to access and change their benefits package via a mobile phone whenever and wherever they want is the shape of things to come.
Marcus Underhill, global reward director at Thomsons Online Benefits, explains: “In a benefits context, 3G was meant to provide mobile users, wherever they may be, with the same high-speed services offered by broadband. With 3G, the mobile user can access high-speed internet, video conferencing, and basic video and TV services.”
Technology is not only passing reward control and power over to staff, IT-savvy employers are also using new systems to collate employee data, and are using this vital information to better determine which benefits are offering a return on investment.
Often referred to as a ‘dashboard’, all benefit information, including take-up and usage, is placed on one site for the employer, enabling them to ensure their benefits plan is as effective as it can be, says Matt Waller, chief executive of provider Benefex.
“We have a reward dashboard, which gives the employers all they need around benefits, so it’s what staff are spending and engagement levels. It’s only when employers start to effectively measure the benefits that they can understand the return,” he says.
Flex has also been weathered by technology. The data and knowledge gained through IT advances have impacted on how and where benefits within flex are marketed. Just as online retailers such as Amazon might e-mail news of a new Bob Dylan album to a customer that has purchased Bob Dylan music in the past, today employers can do the same with perks.
Underhill says: “Employers also have more information today. They know who buys certain perks and when, and so can target one set of benefits to Generation X, and others to Generation Y, for example.”
Sophisticated online retailers also have the capability to personalise websites for customers, and going forward, providers are set to use this concept to update benefits provision and make it more akin to the likes of eBay or Play.com, which most people are familiar with outside of work anyway, adds Underhill.
“Personalised information on a [flexible] benefit website makes them no different to the Amazon site – you log in and get a personal page with different specifications and recommendations for the individual,” he says.
Gone are the days of paper-based schemes, and this has signalled the end of spiralling administration costs that were traditionally linked to slow and weary paper-based programmes.
According to providers, the cost of supplying a flex scheme has dropped by around 50% over the past 10 years, making it not only more widely used among large companies, but also in smaller firms as well.
“A paper-based [flex] scheme 10 years ago was an administration nightmare, though possible in large organisations. The drop in administration today means that small companies can now get access to flex, and benefit packages have 30 or 40 perks, which would never have been possible offline,” explains Waller.
And there is evidence to suggest that cost is not a huge barrier to companies that want to take on new technology to further their benefits provision – just 8% of employers admitted it was their “biggest issue” in the latest Thomsons Online Benefits Employee Rewards Watch Survey.
Though firms are not likely to take decisions lightly, especially considering the current economic climate, careful planning is often needed for the investments that do not offer an immediate return, warns O2’s Kirkland.
“Sometimes you can get an immediate return on your investment, especially when looking at communications – it’s a case of one e-mail or 30,000 printed leaflets. Other times it can be more long-term. Never build a stand-alone piece of kit that you’ll have to abandon when you want to upgrade,” he explains.
Because upgrading is inevitable, technology is a vehicle that will always move forward, with 3G mobile communication and interactive webcasts being the future, and features such as online flex and online total reward statements no longer being revolutionary. A breakthrough today will be outdated tomorrow, and slowly but surely reward packages across the UK are reflecting this movement.
Case study: PricewaterhouseCoopers (PWC)
- PwC uses online interactive webcasts to spread the word about benefits, and can get up to 200 people at a time watching from their desks across different locations, says Carolyn Wilkinson, benefits support leader at PwC. “Our webcasts are interactive, and people can fire questions off to the helpdesk online or by telephone during the presentation.”
- PwC’s flex scheme also operates an online enrolment system, so employees can select their different benefits quickly and efficiently, and total reward statements are no longer paper-based, adds Wilkinson.
- “Staff can access statements at any time, so there’s no need to find a piece of paper with the information on; that way employees can make informed benefits decisions on their own.”
- Going forward, the firm wants to incorporate a data collecting system within its flex plan that will enable it to segment and then target certain areas of the workforce with select perks.
- “We want to be able to have targeted communications. We recruit a number of graduates, for instance, and they may not be interested in reading about childcare vouchers,” adds Wilkinson.
Voluntary benefits and technology
- Arguably, the benefit that has been transformed the most by technological advances is voluntary benefits.
- Once a booklet of outdated retail discounts that could easily be rivalled by a bit of internet shopping, today certain providers are offering employers online schemes with personalised homepages and opportunities to bank varying levels of cash with each purchase via a cash-back system.
- “Now with things like cash-back and other additions, voluntary benefits have been totally transformed; cash-back drives about 70% of employee use, which couldn’t be achieved without technology,” says Benefex’s Waller.
- The very latest technological advances are also being integrated into voluntary benefit schemes – for instance, some programmes incorporate Google Maps into the perk, allowing users to find their nearest retail discount.
- The upsurge of demand for the benefit has led to increased competition within the market, so whereas once providers could offer 100 discounts in a scheme, many now offer thousands of discounts, making the benefit far more worthwhile.