HR teams are spending around £6,000 per employee on benefits but have no idea if they are being used, according to a new report.
Thomsons Online Benefits says HR departments have increased spending on employee benefits, but a failure to use analytics or fit-for-purpose technology means they are struggling to demonstrate the effectiveness of this investment to company boards.
The report – ‘The age of agility: Flexible, adaptable and resilient benefits’ – says this means HR teams are unable to accurately understand employees’ changing needs, particularly in the wake of the coronavirus pandemic.
Thomsons Online found that 42 per cent of HR leaders are spending 20 per cent of employees’ baseline salaries on benefits – equivalent to an average of over £6,000 per person (based on average UK salary). This is an increase on 2019, when just 26 per cent of organisations were investing this sum.
However despite this increased spend, only half of these HR teams are using analytics to monitor benefit take-up levels and how effectively they are being used.
The report found that 55 per cent respondents spend 11 hours or more every month transferring data to and from providers and HR systems. HR leaders say that “too many data sources” is the biggest blocker to more effective analysis of employee data.
In addition more than one in two HR leaders (53 per cent) believe that their current procedures and processes with HR technology expose them to undue risk, such as errors and security breaches.
Thomsons Online Benefits co-founder and MD Chris Bruce says: “HR teams are having to re-think how they support a workforce that’s no longer based in one location, often whilst balancing wider financial constraints.
“Within this context, it’s incredibly concerning that many don’t have the capability to capture and interrogate their data in a meaningful way, leaving them exposed when it comes to making decisions that could better support people where they need it most.
“If HR teams don’t understand how employees are engaging with their benefits, how are they meant to know what they want from their reward packages – and how these needs change over time?”
The report suggests that whilst investment is on the rise, HR teams are struggling to make the most of increased technology budgets, purchasing disjointed systems that make it difficult to compare data insights or identify a single source of truth. Indeed, those who spend more than 60 per cent of their HR budget on technology spend over 15 hours every month manually transferring data.
Josh Bersin, Global Industry Analyst adds: “The pandemic has brought HRs and the HR tech market together. The next year is an opportunity for HR leaders to accelerate their work to create an integrated, healthy, and productive employee experience.”
Bruce adds: “We’re seeing a serious disconnect between investment and measurable returns, which is undermining HR teams’ authority and providing a blocker to further investment.”
The research surveyed 542 HR leaders who working in companies with between 5,000 to 50,000+ employees globally.