An effective employee benefit proposition needs smart technology at its core today, if it is to deliver value for employers and their workforce.
Platforms, portals and employee apps have increasingly become a key part of employee benefits offering in recent years, with consultants working with third party providers or devising their own in-house solutions to meet clients’ needs.
Employee Benefits Collective (EBC) partner James Hall says that when the consultancy launched back in 2016 benefits platforms were typically only available to larger corporates — an issue the firm hoped to address.
“The costs meant that there was little appetite at that point to offer these to mid-sized or smaller employers,” he says.
But this has changed. EBC is one of a number of advisory firms that has developed its own benefits platform, at a price point designed to appeal to mid-sized and smaller businesses. EBC partnered with My Benefits World to develop the platform — which has been used by firms with as few as 13 employees but is also utilised by those employing up to 4,500 people.
EBC aren’t the only firm innovating in this area. Some consultants have been working with technology companies to deliver white-labelled solutions —while others are working with a range of third party providers to offer a number of platform options tailored to different clients’ needs.
Whatever the approach, consultants and advisers are clear there is significant demand for these benefits platforms — particularly from the SMEs market.
This has been driven by changes to working practices post Covid, which has seen more remote working, requiring smarter tech solutions, and a greater emphasis on the health and wellbeing of staff. At the same time companies large and small face staffing issues across many sectors.
“An employee benefits platform, offering access to a range of benefits can help with recruitment and retention,” says Hall. “Those working for smaller companies want access to, and deserve, the same range of benefits as those working for the UK’s largest employers.” And in a cost-of-living crisis these platforms can help companies demonstrate the investment they are making in staff — be it via pensions, healthcare or other benefits.
So what functionality are consultants looking for when it comes to EB platforms?
“The key thing is the ability to manage employee benefits in one place and produce Total Reward Statements,” says Benefiz founder and director Tim Gillingham.
He points out that firms spend a lot of money on benefits like pensions. These statements can help employees understand the value of these benefits.
“It is also important the technology is able to manage benefit eligibility and deal with a variety of enrolments. Single sign on access for employees and links to providers are useful, as well as the ability to automate and schedule regular reports from third parties to reduce the manual processing
of data.”
Ed Smithson, head of client technology at Buck, a Gallagher company, agrees these are key features. “First and foremost platforms should enable an online retail experience with essentially a shopping cart enabling employees to select their chosen benefits, and personalise where relevant.”
He points out that benefits can be a complex area, particularly around eligibility criteria. The technology needs to be able to cope with this he says.
Buck previously worked with third-party providers but has now developed its own in-house system. Smithson — who was with the company before and after this change says it made sense to develop its own in-house capability.
“Buck has always been a technology-driven company and this employee benefits in one place. This may be via a portal — accessed through a workplace log-in, or it could be via mobile-based app. But not all platforms offer app-based access to date.
While some consultants think an app can really help with engagement, given the frequency with which people look at and use their phones, not all agree it is necessary.
Smithson points out that web-based access may be sufficient to give people access 24-7 to this information, via home or work laptops. Apps are great for simplifying information he says but not necessarily great when dealing with the complexity of a full benefits portal. Offering this additional functionality will also increase potential development and support costs he adds.
From an employer’s point of view an effective benefits platform should reduce HR administration, drive engagement with benefits and deliver better quality data, helping firms refine and improve their benefits proposition.
Cavendish Ware director Roy McLoughlin says: “HR people love these gives us more control and the flexibility to tailor the system to suit client needs.”
Single sign on is seen as important, making it easier for employees to access all platforms. It stops endless queries from staff about what benefits they have, how they change their pension contributions or what telephone number they need to make a claim on their cash plan.”
Partners& sales director Dan Cockram agrees. “All too often employees simply don’t know what they have, or how to access it.”
Consultants agree platform result in more people being aware of these benefits and utilising these products, delivering health and wellbeing benefits and a return on investment for the employer.
Gillingham says platforms should also allow employers to create and send bespoke communications, which can support key messaging or campaigns, boosting engagement further.
Cockram adds: “The platform also generate a lot of feedback for employers, and consultants when it comes to benefit design. We can see what benefits are being used and by whom, and what is not being used. Without this feedback it is essentially guesswork.”
Smithson adds: “This technology can give high quality granular data, that can
help businesses understand which employees are using, or not using certain benefits. By looking at usage among different cohorts business can understand whether this is to do with the benefit design — is a policy too expensive for example —
or perhaps an issue with communication?”
The platforms aren’t just focused on specific products line but are increasingly seen as part of an employers’ wellbeing proposition.
Gillingham says: “We are seeing growing demand from clients to manage a wellness budget via an expenses module or ‘flex’ pot — and the ability to manage employee recognition and achievement via the platform.”
Consultants say these platforms can be a useful hub for a range of information, from mental health and nutrition advice to help with the cost of living.
McLoughlin says that is these ‘flufflier’ benefits — be it discounted gym memberships, shopping vouchers or loyalty schemes — that often prove popular with employees and can really drive engagement with the benefit platform. “These are particularly popular with younger employees who may see less benefit in group life, critical illness or pension plans.”
Smithson adds that platforms are increasingly dovetailing with other HR functions, be it training and developing or time-recording systems. “Ideally employees should just have one log-on and a single place to go to.”
Of course the more functionality a platform has the greater the potential cost. Historically, cost has been the main barrier to rolling out benefits platforms
to smaller business.
“Over the last few years these costs have reduced due to new technology being introduced which requires less programming and resources to set up and run,” says Gillingham.
This has made EB platforms a more viable option for some SMEs, but cost remains a challenge says Gillingham — and one of the key considerations for both client and consultant when selecting a EB platform.
“There remains a limited number of platform providers in the market and we would like to see more solutions available for the smaller employer to access cost- effectively,” he adds.
Cockram says that it is often the upfront costs that can be prohibitive for smaller clients, along with the time it can take to get systems up and running. “The ongoing annual costs are less of a barrier,” he adds.
Partners& itself works with two benefits platforms providers and Cockram says they firm would not rule out partnering with more, if the solution was right.
These platform providers have very different propositions he says. “SMEs tend to opt for a plug in and play approach which doesn’t require the same training or integration. It is a simple, easy to use solution. But we can also offer a platform that has more functionality and depth to it, which will appeal to other clients.”
The off the shelf options typically offer a lower cost option he adds.
McLoughlin says cost remains a challenge with most third-party providers not offering solutions that are cost effective for the smaller SME market.
This is an issue that was highlighted by the withdrawal of Work Life from the market. Its platform enabled SMEs to manage AE pensions, while also offering a range of additional flexible benefits including group risk products, discount schemes and financial guidance. Consultants said the service proved popular with clients, particularly given the cost was around £5 a month per each employee. But it appeared the Work Life was not able to achieve the scalability needed at this price to break even.
McLoughlin says advancement in AI and smarter technology may drive down costs in future, to the benefit of employers of all sizes. As Hall points out innovation in this area in recent years has benefited many mid-sized and larger corporate clients.
But while much of the focus is on tech innovation, Smithson points out that service standards remain a challenge across the industry. “Benefits platforms are built on smart tech but they also rely on people to service and supporting this technology. When looking at platforms it’s important to ensure there is adequate support when it comes to updating systems, providing training for clients to ensure employers and the employees get the most out of these platforms.”