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The use of software as a service (SaaS) technology and the need to drive employee engagement made significant inroads toward becoming a key component of HR programs in 2014.
As we look to 2015, the HR technology landscape will undoubtedly continue to evolve and multinationals will increasingly look for new ways to engage a global workforce, including streamlining the delivery of benefits and rewards programs.
When looking at HR trends region by region, however, predictions for the new year become more complex.
The United States
The U.S. is continuing to see strong growth, bringing it out of the recession. From 2009 to 2013, approximately 4.5 million jobs were added, according to the Bureau of Labor Statistics. Survey results from The Hay Group indicate that base salary for U.S. employees will increase by 3 percent in 2015, and that employers will increasingly look to incorporate total reward programs that can incentivize and motivate employees. HR in the U.S. in 2015, especially in the tech sector, will revolve around engaging and retaining employees.
In October 2014, Facebook made headlines for its decision to offer a new, out-of-the-box benefit that provided female employees the option to freeze their eggs. While some saw this new benefit as controversial, it was just the beginning of benefits that will toe the line between getting too personal and finding new ways to meet important needs of the employee base. The reality is that creative benefits are one way large tech companies headquartered in the U.S. are attracting and retaining talent. From offering dry cleaning services to nap pods, in 2015 we can expect to see employers go the extra mile to keep employees satisfied not just with competitive salaries, but with competitive benefits as well.
Next year, we will also see the increasing use of wearables in the U.S. workplace. Wearables have hit the scene with promises of improving employee engagement and productivity. The incorporation of this technology into the workplace has the potential to revamp existing benefits and rewards schemes from new health initiatives that reward employees who participate in healthy practices such as employee exercise groups or using the stairs rather than taking the elevator. While companies will be faced with security and privacy issues surrounding this technology, the benefits will prove to be irresistible to both employers and employees.
European employees are continuing to push for more openness and transparency when it comes to HR administration. They are demanding increased access to benefits and rewards information, which will place benefits management software at the forefront of HR discussions in the new year. Engaging employees in all parts of the world can be an overwhelming task for HR teams, especially when faced with varying laws and regulations, not to mention cultural differences. While there have been global trends of integrating HR SaaS products to engage worldwide employees, European countries have been slow to adopt, until recently. These European trends will spur demand in 2015 for SaaS-based solutions that can consolidate HR processes and provide employees with access to their benefits information anytime, anywhere, on many devices.
Organizations headquartered in the region are beginning to meet employee demand for a modern and intuitive benefits enrollment and management experience. Benefits software has been implemented mostly in the Nordic region, the Netherlands and Spain, but even the majority of these implementations are at a local level. Other European countries, especially those that will continue to see slow economic growth in 2015 such as Belgium, will lean heavily on total rewards to offset their low or nonexistent pay raises this year. Employers are also looking to SaaS-based solutions to provide employees with a user-friendly HR portal where they can easily manage their benefits packages online. In response to the demand for mobility, organizations will also look to implement solutions that are optimized for tablet and/or smartphone use.
Europe will also continue to see a shift in companies running decentralized HR processes and moving to centralized HR processes with automated benefits administration. Global HR teams for European organizations will gain access and insight on benefits information on global, regional and local levels and will reduce the number of inefficiencies that occur with outdated systems. The incorporation of HR software will also allow European employers to provide more clarity on the value of benefits from the value of their total rewards down to the contribution summary on employer funded benefits.
When it comes to HR in Asia, there are so many various trends throughout the region that it’s difficult to generalize. The country-by-country diversity within Asia is significant, which explains why fragmented processes, multiple vendors and local systems are common when it comes to benefits administration. As a consequence, Asian organizations have had to place more attention on how they recruit, engage and retain employees.
Looking into 2015, we will continue to see companies within the region implement new retention measures. Contributing to this focus is that Asian employers are now competing with multinational corporations for local talent, which makes strong benefits and total reward communication imperative as the smaller Asian employers cannot always compete on salary alone. In fact, many employers may actually be looking to contain salary increases due to wage inflation issues affecting countries such as Indonesia. Incorporating a total reward approach with employee allowances will prevent companies and their employees from facing the full brunt of inflation. Multinationals will also move to a regional HR shared service center that includes the implementation of regional or global payroll, human resources information systems and benefits software to engage employees.
There is also a resounding theme in Asia in which companies have recognized the risk of third parties owning their data. Outside of the fact that third parties make it difficult to audit information, organizations are now facing privacy and compliance concerns. Third parties still traditionally rely on disjointed, paper-based procedures, and as Asian-based companies look to compete in the global marketplace, the need for SaaS-centric processes will become increasingly important.
The implementation of flexible spending accounts (FSA) is also a trend that we expect to continue into 2015. FSAs offer an efficient way to stretch benefits spending. Hong Kong, Singapore and Korea have successfully adopted this model and we can expect continued uptake in surrounding areas. There will be differences in how regions adapt to the model. India, for example, is potentially a huge growth market, but since providers are not adequately prepared for flex, salary packaging will remain prevalent.
A Global View
The year 2015 brings promise of companies continuing to tackle the increasing costs of medical provisions, the consumerization of health care and the introduction of wearables to the workplace. Mobile capabilities will be essential for HR processes and organizations will continue to tackle the challenge of engaging an increasingly global workforce. From where we are sitting, 2015 is sure to be filled with innovative technologies and creative benefits that all aim to put the employee first.
Chris Bruce is the co-founder and managing director of Thomsons Online Benefits, a provider of cloud-based global benefits management software.
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