Price is not the primary driver for large employers that are choosing among benefits administration technology platforms. Ease of use for benefits administrators and employees and the ability to integrate benefits technology with HR information systems were higher priorities than cost for HR respondents at large companies, a national survey shows.
The
HR Technology & Benefits Administration Survey was conducted during June and July 2017 by Chicago-based benefits IT advisory firm Pacific Resources, which does not own or have a financial interest in any benefits administration technology platform. Respondents were senior HR or benefits executives with decision-making authority from 91 organizations across a range of industries, with an average size of 20,000 or more employees. The findings were published in December.
"Although employers still struggle to find the right technology partners, they are gaining more clarity on what they want from HR technology administration solutions and the vendors that deliver them," said Paul Rogers, president and chief operating officer of Pacific Resources.
Among the key findings from the survey:
- The most valuable outcomes employers have found in their experience with benefits administration platforms are best-in-class employee user experience (49 percent) and the ability to integrate benefits technology with HR functions (37 percent).
- Cost is no longer the driving factor when selecting a benefits administration platform. Only 23.9 percent of employers cited it as most important in 2017, down from 64.4 percent in 2016.
- Replacing cost as driving factors in benefits administration platform selection are administrative ease at 61.4 percent, up from 38 percent in 2016, and empowering employees to make informed benefits decisions at 51.5 percent, up from 24.4 percent in 2016.
- 83.2 percent of employers indicated that communication, employee education and engagement are integral to their overall health and welfare benefits delivery strategy. In addition, most employers (88.8 percent) felt that cost calculators, plan comparison tools and guided decision-support tools that help employees select benefits that meet their personal and family needs were at least somewhat effective.
- Outsourcing of employee eligibility and enrollment processes grew sharply in 2017, up 22 percentage points from 36 percent to 58 percent.
- Employers are confident in and rely on technology to deliver benefits, but less than half (45.5 percent) say they are likely to remain with their current benefits administration platform vendor, while 29.5 percent are unsure and 25 percent are likely to request bids from other platform vendors. This may indicate a need for better technology and/or execution.
"Employers want a more holistic approach to strategic benefits delivery," said Sean Clem, vice president of technology, marketplace and engagement solutions at Pacific Resources. "They want to integrate the right products, user-friendly technology and clear communications so they can offer the right benefits to employees and their families."
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A User-Friendly Experience
Most employees now have access to a self-service pay and benefits online portal, and more than 12 percent prefer to access it through their smartphones rather than a computer, according to the American Payroll Association's 2017
Getting Paid In America survey.
If an employer is using a benefits administration platform, "it's important to provide guided selection that helps [employees] to make benefit choices" through interactive features that ask questions and, based on the employee's responses, suggest appropriate options, said Meredith Ryan-Reid, senior vice president in insurance provider MetLife's group benefits division in New York City. "We used to hear, 'What am I obligated to do?' That has evolved into, 'How do we make this fun and interesting for people, how do we get their attention?' "
"It's becoming more common for people to use their smartphones to shop for cars, do their taxes and even apply for mortgages," said Logan Butler, a Charleston, S.C.-based benefits content specialist at Benefitfocus, a benefits management IT firm. "If your employees can use their mobile devices for those traditionally complex processes, wouldn't it make sense for them to be able to use them to enroll in their benefits?"
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