Need to know:
- The use of artificial intelligence (AI) and automation in employee benefits is growing.
- This can help employees receive personalised recommendations.
- Employers can also benefit from greater insight around benefit schemes.
Artificial intelligence (AI) and greater automation are infiltrating almost every area of business, and employee benefits is no exception. It is a trend that is expected to increase this year, offering greater personalisation of benefits for employees and providing employers with the information they need to shape strategies.
At its most basic, AI can help put benefits in front of employees, based on their individual circumstances. Thomas Faith, head of product at Zest, says: “Employees want relevant and helpful content, and they want it to be available when they need it. To that end, placing the best content in front of people when they need it is certainly something in which AI can and should have a role.”
This can also mean offering employees the benefits that best suit their needs, says Gethin Nadin, chief innovation officer at Benefex and Zellis. “Too much choice is confusing,” he says. “The more advanced providers will now also allow [employees] to preference themes of topics, like money or wellbeing, and give [them] a more personalised and tailored benefit scheme. This is heading towards automation not only making that choice easier, but also assisting [them] in making choices [they] didn’t know [they] needed.”
Yet there will always be a need for human involvement, particularly around financial benefits, says Alexis Parrish, head of benefits technology at pensions advisory firm Isio. “We know that technology can certainly automate some processes and expect its use to continue to grow, but the issue of engagement and connectivity still remains,” she says. “Big decisions in life, often in relation to personal finances and life circumstances, are unlikely to be made without human reassurance.”
AI and automation can help deliver individuals the kind of experience from employee benefits packages that they receive in their personal lives. Andy Seabrook-Harris, technology product director at Aon, says: “Viewing employees as online consumers brings new and exciting ways of thinking about employee benefits, and automation and AI are the driving force behind meeting those needs. In 2023 and beyond, we’ll see more automated data flows, personalised recommendations, and proactive customer support tools using AI to drive personalisation and automation.”
Developments in 2023 are likely to be modest, as technology teams seek to develop best practices and agree common standards. “What’s really exciting, however, is the potential to bring in content from other technology partners to drive personalised engagement, similar to the service we’ve all come to expect from the likes of Netflix or Spotify,” adds Seabrook-Harris.
Impact on reward teams
Aside from tailoring suggestions around benefits to employees, automation and AI are likely to impact how employee benefits teams operate. This could lead to some tasks and roles such as manual data entry and benefits administration being automated, says Marcelo Lebre, chief operating officer (COO) at Remote. “By providing data-driven insights and automating administrative work, AI and automation tools will help HR teams spend less time on paperwork and more time on the tasks that only humans can perform, resulting in stronger teams and greater employee satisfaction.”
Greater automation could also impact on the traditional benefits enrolment window, with less manual intervention reducing the need for employees to take out benefits at a particular time of year. Sahil Sethi, CEO and co-founder of financial wellbeing platform Maji, says: “Benefit enrolment windows will continue to become more flexible. Employers are increasingly moving to quarterly benefit cycles, with some even allowing monthly changes, for example in changing pension contributions or corporate Isa savings via payroll.”
More automation means more data, and this could impact on benefit strategies and delivery. By understanding what benefits work well for particular types of employee, based on factors such as gender, age, industry and region, employers can come up with benefit design schemes in seconds. “What used to take hours of research is now available at the click of a button,” says Nadin.
Data analysis can also help employers explore the likely impact of any changes ahead of implementation, using automation, machine learning and AI, says Seabrook-Harris. “This can simulate the impact of changing a benefit provision and how that change impacts price and employee perception,” he says. “This concept of using data analytics, combined with machine learning and AI, is a fascinating one that we expect to see more of in the UK.”