HEALTH

Optimizing Digital Disruption: Transforming Benefits Management and Communications to Optimize ROI

16 January, 2018

Josh Fisher
Growth Markets Commercial Director, Thomsons Online Benefits at Mercer

“82% of millennials say workplace technology would influence them when deciding whether to accept a new job."

Change is a constant, but the pace of change is greater than ever, with greater impact on the way organizations run their global benefits programs Many factors involved are outside a company’s direct control, but nonetheless, put increasing pressure on the investment in, design and execution of — and value provided by — benefits within the wider value proposition.

Major trends — occurring at both societal and business levels — influencing how organizations think about their global benefits programs include:


  • HR needs to be agile, respond to change quickly, achieve global consistency to ensure quality and efficiency, have single global suppliers to better control the supply chain and streamline operations to reduce costs and manual processes.

  • Organizations need to address skills shortages while appealing to multiple generations, retaining employees in a mobile world and tackling the challenges of an aging workforce.

  • The focus on cloud-based technology and automation to improve efficiencies and effectiveness while meeting executives’ demand for data-driven HR decisions and employees’ desire for a consumer-grade technology experience is growing.

  • Regulatory reform, worsening health/ wellness profiles, spiraling health costs and demand for greater employee choice all add to the complexity of global benefits programs.

Given these challenges, many organizations find their current benefits approach isn’t delivering desired results. Many have no global strategy in place, and those that do are typically managing benefits manually or are using different local systems, making consistency and governance nearly impossible.

But it doesn’t have to be this way. By harnessing the power of technology and the data within it to inform and optimize each part of the benefits process, employers can address key concerns and derive valuable results for their businesses.

Transforming HR Technology

No one likes to perform low-value administrative tasks or deal with mistakes and errors — people want to make a difference at work. Thankfully, automation algorithms are changing the role of HR, replacing manual administration and allowing teams to focus on value-added work. Research by Gartner shows that by 2020, half of roles will be impacted or even totally disrupted by technology[1]. This is further demonstrated by research from

Sierra-Cedar showing that recruitment for administrative roles is decreasing even as recruitment for HR technology and analytics roles is on the rise[2].

As this shift continues, analytics will become the only way to inform decision-making, and artificial intelligence (AI) will become the new way to support employees and provide service. For the first time, employers will be able to measure every aspect of their benefits strategy and delivery to optimize performance by evaluating success and adapting to challenges as they arise.

Employees Demand Consumer-Grade Experience

In the past few years, employees have started making more decisions about their careers based on experiences with their employers. Some 80% of millennials reach for their smartphones when they wake[3]. People increasingly buy products based on how quickly they can get their delivery. So it’s hardly surprising that 82% of millennials say workplace technology would influence them when deciding whether to accept a new job[4].

Companies that understand and accept this cultural shift are responding by eliminating paper-based processes. But the pace of workplace technology adoption has been slow. To meet employee demands and secure the best talent, employers must reconsider how they serve their employees.

AI is Driving Self-Service on Demand

In the digital world, AI is rapidly becoming the best way to support employees and provide service — a major reason tech giants are investing enormously in this space. In fact, most investment analysts see 2017 as the year AI functioning as a personal assistant really starts to take hold[].

It’s not just about employees. A large ecosystem is now being developed in the corporate world to improve the roles of contact centers and improve customer experiences. Contrary to conventional wisdom, the best customer service isn’t focused on servicing the unhappiest of clients but on ensuring minimal contact. Anyone who has used online chat support has likely had a good portion of the conversation automated and perhaps dealt with an agent who has simply checked prepopulated responses. Every time an agent marks a response as correct, the bot learns, improving the customerexperience.

Data Drives HR Decision Making

In the employee arena, companies are sitting on huge amounts of data, leading to changes in the way they make decisions. In coming years, executive leaders will increasingly expect all recommendations to be based on real-time, accurate and even predictive data.

Ultimately, the role of human capital management vendors will change — as will the way companies think about buying from them. For many employers benefits command the single largest spend outside of pay, yet chief HR officers currently devote a tiny portion of their time to ensuring they’re getting the maximum value. Analytics will provide the ability to unlock the value of the enormous benefits spend — giving benefits increasingly strategic importance to the chief HR officer.

The Role of Benefits is Changing

These changes couldn’t come at a better time. Traditionally, benefits were used to provide a safety net in a working career in case an employee died, developed a long-term illness or needed income in retirement. But workers today no longer stay with their employers for life — 72% of workers expect to change their jobs more than three times in their careers[].As a result, the relationship between employee and company has changed. At the same time, companies have been shifting liabilities to their workforces.

As employers recognize that a healthier, happier and more engaged workforce creates a more productive organization, benefits trends are undergoing major change. Companies want to focus more on health and wellness so employees won’t get sick — and will get back to work quickly if they do get sick. Employers also want to help alleviate employees’ everyday worries. In short, they want their benefits programs to show their workers that they care and are doing the most they can to help.

Technology has aided this transition as companies move more benefits into reimbursement-style accounts that empower employees in managing their health and finances. Employers can also take advantage of platforms that allow users to access information on the move in a format that’s relevant to them. Furthermore, the proliferation of wearable trackers and gamification helps promote employee dedication to health and wellness.

Mercer Marsh Benefits Powered By Darwin: A New Solution

Having a vision for a better approach to global benefits is one thing; delivering it in the right way is another. Given the transforming HR arena and the growing focus on digital technology, Mercer Marsh Benefits has developed and tailored an approach to addressing organizations’ needs as they go down this path of disruption.

Too often, global benefits management is focused on fixing immediate problems or using tactical responses rather than setting strategies and plans in motion to drive the right outcomes — whether for engagement, productivity, sustainability or effectiveness — in a demonstrable way. Proactive organizations seek a partner that is flexible enough to address unique needs and stay adaptable over time rather than simply dictating a course of action. Global consistency is also essential, as is expertise with regulatory compliance.

Ultimately, multinationals need a partner with an eye on the future to see coming trends and develop responses before others do. Darwin™, acquired by Mercer in December 2016, is a cloud-based, technology-driven solution that meets these needs for all aspects of benefits communication and

administration. It communicates and manages global benefits day to day, in multiple currencies and languages, helping improve user experiences, efficiency of processes and informed decision making. It also helps transform the broking process, with globally consistent data that accelerates the adoption of international pooling and captives, providing better long-term financing and risk management solutions for global benefits.

The technology also improves consultancy, harnessing data and engagement with employees to drive deeper insights and identify trends and patterns. The uniqueness of the solution is in how it transforms the role of anyone who works with benefits. Non-value added activities become automated, eliminating waste and elevating individuals’ roles, driving outcomes for the company and employee alike.

Conclusion

As HR contends with a host of mounting challenges — globalization, workforce pressures, digitization, regulatory reform, healthcare costs — it’s also being asked to step up and find new ways of working, spending less time performing wasteful administrative tasks and focusing more on becoming strategic advisors who drive business outcomes. Many organizations still struggle with strategic benefits management and are ill-equipped to address these trends.

The rise of powerful technology platforms, such as Darwin, along with providing consulting expertise will help HR harness the power of its data to gain maximum insights and optimize the benefits management process. This, in turn, will transform decision-making to drive desired outcomes and, ultimately, create business value for the organization as a whole.

1 Gartner. “Gartner Reveals Top Predictions for IT Organizations and Users for 2016 and Beyond” [press release] (October 6, 2015).

2 Sierra-Cedar. 2015–2016 HR Systems Survey White Paper. 18th Annual Edition (2015).

3 Zogby Analytics. Millennial Study (2014).

4 Dell. “Dell and Intel Future Workforce Study Provides Key Insights Into Technology Trends Shaping the Modern Global Workplace” [press release] (April 2, 2013).

5 Brackenridge G. “Machine Learning Is Transforming Investment Strategies for Asset Managers” [commentary] CNBC (June 6, 2017)

6 Hays. Gen Y and the World of Work (2013)

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Establish new rituals.   Take time to address the emotional, not just the practical. Take a few minutes at the start and end of a call to find out how everyone is feeling. Pulse-checking questions people can type responses to in a chat function (e.g. “Use one word on how you feel about what we’ve just shared”) can be a great way to take a temperature check. Communicate that managers are still accessible by phone, even if not in person. Use old and new technology (phones as well as video conferencing services) to stay personal, especially with workers not used to working remotely. Don’t let email (and even chat) be the only way you communicate. The volume can become deafening if not managed. Leverage community sites and project boards to train people in how best to stay connected. In our study, 22% of employees believe that some necessary human interactions have been lost, so finding ways to inject warmth and a bit fun into exchanges is a good idea.   The social distancing required in response to COVID-19 has, rightly, got many companies reexamining their digital work experience. Forty-seven percent of executives are concerned about employees’ digital experience — or the energy-sapping nature of not having it. Nearly half of employees believe there is room to improve on digital transformation: 20% of employees today say HR processes are complex, and a further 29% say they have been simplified but still have a long way to go. In the longer term, it will be valuable to revisit the company’s EVP and interrogate how technology-enabled HR processes are today and how capable working tools are with coping with mass remote services. Intermediaries such as ServiceNow, Mercer’s Mobility Management Platform and digital outplacement solutions can help. How we care is how we win   Employees are understandably concerned about the health of their families and communities and organizations are quite rightly putting the health of their people first (their #1 workforce concern this year). But financial market volatility, and the impact on individuals’ jobs is a mounting concern that is weighing on people’s minds. Meanwhile, businesses are examining whether their practices are agile enough to withstand unpredictable events such as COVID-19, if they are resilient enough to sustain themselves through this period of hardship, and innovative enough to stimulate demand afterwards. We’re being challenged to do things differently — in companies big and small, on new platforms and with new technology, and we see emerging new ways of caring for one another. And in their wake we will not go back to how we operated before. Necessity breeds innovation. We are on the cusp of new ways of working and living that, if executed well, will build a bright future.

A Way Forward Towards Purposeful Job Titling
Dr._Sebastian Dr. Sebastian Fuchs |26 Mar 2020

Everyone’s job has, in some form or another, a job title. Be it a Brick-layer, Accountant or CEO. The common understanding is that the job title depicts the respective job and its roles and responsibilities. Our work with different clients of different sizes, with different structures, maturity levels, and in different economic and cultural environments, however, suggests that there is much more heterogeneity in job titles than one would suspect. In one organization, for example, an Accountant is called ‘Financial Advisor’ whereas in another organization, s/he is called ‘Finance Officer’. In Mercer’s 2019 Global Total Remuneration Survey, on a sample of 182 organizations based in the United Arab Emirates, as an example, the Mercer Job Library position ‘Accountant–Experienced Professional’ is tagged against more than 180 different job titles. This suggest that more than 99% of organizations included in the data set label this type of job in a unique, idiosyncratic manner. In a similar vein, Mercer’s 2019 data from Australia shows more than 360 different job titles across 313 organizations. A similar report for India from 2019 shows over 520 different job titles across 360 organizations for this type of job. In Brazil, Russia and the UK, the same analyses produced very similar results. This means, to be specific, that similar jobs even in the same organization are often labeled in a heterogeneous, unconcerted way. Problems associated with purposeless job titling   While the Accountant example provides some insight into the actual responsibilities of the role, we often see organizations labelling jobs in less meaningful, purposeless ways. For instance, we find job titles such as ‘Senior Supervisor Financial Accountant’, ‘Business Analyst’, ‘Finance Executive’ or, more recently, creative titles such as ‘Accounting Guru’, ‘Accounting Ninja’ or ‘Accounting Rockstar’ in this area of organizational life. In our view, this creates five key issues: 1.   In markets that are suffering from employee disengagement, the rise of passive job seekers and a growing appeal of self-employment and entrepreneurship[1], a job opening with an inaccurate job title faces two key problems. Firstly, the job applicants may be over or under qualified for the position at hand and, secondly, potentially suitable applicants may not apply as they believe the job is not a good match. 2.   Breaches of the psychological contract between employees and their employer may occur. To be precise, “the psychological contract encompasses the actions employees believe are 1.      expected of them and what response they expect in return from the employer”[1]. To this end, a purposeless job title may provide an inaccurate view on the actual roles and responsibilities to be performed by the new joiner. For instance, a ‘Financial Advisor’ may execute on the classical accounting tasks, such as processing accounts receivable and payable, but the job title, however, indicates that the job holder would spend some time interacting with stakeholders and provide advice on financial matters. The lack of defined possibilities to engage in such activities may constitute a psychological contract breach, leading to cynicism towards the organization, turnover, job dissatisfaction, reduced commitment and an overall decrease in performance. 3.   Another important issue to consider is an employees’ propensity to boost their current job title. This is linked to two mechanisms. Firstly, boosting one’s job title ultimately serves to enhance one’s status and self-identity[1]. Secondly, an enhanced job title is likely to attract attention on the external job market. 4.   Perceptions of fairness may decrease due to inconsistently labelled jobs. For instance, a job may be called ‘Finance Lead’ that is, in terms of roles and responsibilities as well as qualifications required, very similar to a ‘Head of Finance’. For most people, a ‘Head of Finance’ is classified as a higher ranked job despite both jobs being very similar in nature and potentially having the same job grade. This can create perceptions of injustice leading to employee turnover, lower levels of extra-role behavior and greater levels of withdrawal, deviant and retaliatory behaviors[2]. 5.   Purposeless job titles may also be detrimental for internal and external communications. Internally, there might be a certain degree of ambiguity to what the hierarchy level of a an incumbent is and consequently how messages should be phrased. Externally, purposeless job titles may further lead to misunderstandings in terms of authority levels and responsibilities an employee holds. Reasons for purposeless job titling   The reasons for these five issues are manifold. First and foremost, only few organizations seem to have adhered to a coherent, up-to-date and intuitive job titling framework. In fact, in many organizations job titling is either left to the line manager or, in some cases, left to the job incumbent. This, by definition, is likely to create a certain degree of heterogeneity among job titles. In addition to that, even in leading organization, there is often no clear, well-defined organizational process in place to govern this element of organizational life. We advocate, and outline in greater detail below, that there should be a process in place including clear roles and responsibilities in terms of who sets and ultimately approves the titles of jobs. We also see that organizations often seek to develop job titles that adhere to the specific cultural contexts in which they operate. This, as a consequence, also adds to a certain degree of incoherence in job titling. Lastly, the high degree of change to which many organizations across the globe are exposed to, also contributes to incoherent job titles. To be specific, when organizations adopt new structures and amend roles and responsibilities of their jobs, job titling should also be considered. However, for many organizations this is an issue of limited importance of the time of restructuring so this tends to get neglected. As a consequence, especially with numerous rounds of re-structuring, a heterogeneous, incoherent landscape of job titles is likely to emerge. Conducting purposeful job titling   The above-mentioned observations raise the question of how organizations can move forward to actually create purposeful job titles. Meaningful or purposeful job titles usually consists of two key elements. Firstly, purposeful job titling should indicate the actual function and with this associated roles and responsibilities the job incumbent is tasked with. If an employee in Finance is responsible for maintaining the Finance IT systems, then the job title should indicate that this employee looks after IT for Finance, as opposed to more generic IT activities. Secondly, a purposeful job title also indicates the hierarchical level, or, to be more specific, should hold reference to the actual job grade the job has been mapped onto. In our work across the globe, we see a certain degree of inconsistency and incoherence in this respect. Frequently, strict hierarchical levels are used to create job titles, even though the job evaluation may not indicate such job titling. For instance, the responsible job incumbent for managing financials in a country managing set-up of a small to medium sized enterprise owned by a multinational corporation may be called ‘Chief Finance Officer’. This job title indicates a fairly senior position. In reality, however, such a job more closely resembles the activities of a ‘Financial Accountant’ or a ‘Finance Manager’. Such discrepancies between the actual roles and responsibilities of a job and its titling typically become clear when job evaluations are performed. As such, we advocate a certain adherence to job grades when it comes to job titling in order to derive purposeful job titles. In Figure 1, we outline how an approach to purposeful job titling could look like. It indicates the main components of a job title, i.e. (a) what the job’s hierarchical level in the organization is, (b) its function or area of expertise, (c) to what organizational unit the job belongs, and (d) what the actual scope of responsibility of the job is. For instance, a ‘Senior Vice President Finance EMEIA’ uses the elements A, B and D of the framework. Element C, the organizational unit, in this case is not required. For professional jobs, as another example, an ‘Advisor Finance Downstream Abu Dhabi’ would have all elements in her or his job title. This way, the same protocol and nomenclature for different job titles is applied universally across the organization, and thereby meets the requirements of purposeful job titling set out above.                           Figure 1: Mercer’s Purposeful Job Titling Framework In addition to adopting such a framework, organizations should consider who owns and governs job titling. The governing department should make sure that there are employees who have ownership of this process, and that no job requisition and its related activities as well as any internal re-structuring fails to comply with the framework. This way, purposeful job titling gets embedded and institutionalized in the organization. Sources: 1. 2017, ‘The talent delusion: why data, not intuition, is the key to unlocking human potential’, Tomas Chamorro-Premuzic, Piatkus. <a href="#"> 2. 1994, ‘Human resource practices: administrative contract makers’, Denise M. Rousseau and Martin M. Greller, Human Resource Management, 33-3, page 386. <a href="#"> 3. 2005, ‘Understanding psychological contracts at work: a critical evaluation of theory and research, Neil Conway and Rob B. Briner, Oxford University Press.<a href="#"> 4. Ibid. <a href="#"> 5. For an interesting review see: 2019, ‘The five pillars of self-enhancement and self-protection’, in the Oxford handbook of human motivation, Constantine Sedikides and Mark D. Alicke. <a href="#"> 6. For a good overview please refer to: 2001, ‘The role of justice in organizations: a meta-analysis’, Yochi Cohen-Charash and Paul E. Spector, Organizational Behavior and Human Decision Processes, 86-2.