Companies are being held back from taking employee benefits digital, despite increasing demand from employees for EAP, mental health support and physical health services, according to new research.
According to the UK survey of HR professionals in SMEs by Cloud8, cost is the main barrier preventing businesses from digitising their benefits. Other reasons included the need for additional time and funding to set up and manage a digital system, the perceived difficulty of going online, and the desire to keep the flexibility and control over the employee benefits package.
Around 94 per cent of the organisations in the survey provide benefits to their employees. This statistic, which is just higher than 2021’s (91 per cent), highlights the sustained importance that smaller businesses attach to employee perks.
Nearly 39 per cent of employers exclusively provided core benefits, while about 61 per cent supplied a combination of mandatory and optional (employee-funded) benefits.
The majority of businesses—60 per cent—manage their benefits entirely in-house and interact directly with service providers and insurers. Around 34 per cent of businesses utilise a combination of interacting with suppliers directly and hiring an advisor.
Additionally, the survey revealed that 50 per cent of participants were aware of systems in the market that provide digital employee benefits solutions.
Dipa Mistry Kandola, CEO at Cloud8, said: “Hearing that so many companies are being held back from taking their benefits digital because of cost isn’t a surprise to us. But it is a false barrier and one that we’re working hard to overcome in partnership with advisors and HR and payroll tech providers across the country.
“Over the years we’ve seen the cost of HR systems come down in every area of HR – except for benefits. In 2022 HR teams are using good tech at a low cost – it’s an absolute no brainer for them. We created Beam at Work to give the same affordability and simplicity to HR teams, and for many it’s the missing piece of the HR tech puzzle which can bring so much added value.
“Along with all the advantages our survey responses highlighted – such as flexibility, transparency and employee retention – a digital platform such as Beam at Work also gives HR professionals access to essential management info. This is absolutely vital when assessing the performance and ROI of employee benefit and pension spend. And the best bit is that all of this can be introduced in just half a day and for around a couple of thousands of pounds – gone are the days of long set up projects and fees in the thousands of pounds.”
Kandola adds: “The changes HR professionals reported seeing in the way their people are using employee benefits now – compared to 12 months ago – are striking. The use of EAP, mental health support, physical health services and dental services have risen significantly as people struggle with financial health and worries about the future.
“Companies have noticed more people signing up for PMI, simply to access online GP services. This is really concerning as so many SME employees are still underserved when it comes to their employee benefits, largely due to the perceived costs and complexity in implementing and running a benefits system.”