How are employers currently using employee data?

Reward and benefits has the potential to be one of the most data-driven areas of HR practice. However, the Evolution report, published by Benefex in October 2023, has found that 89% of reward and benefits professionals admit they could do better at using data. That is despite 99% of benefits professionals believing data-driven reward and benefits deliver better results, boosting engagement, retention and employer brand, and aiding talent attraction. 

Benefex also found 76% of HR and reward leaders face challenges turning data into actionable insight, says Danny Snow, VP of customer success. “This is why it’s so important for organisations to implement a benefits platform with analytics that provides access to real-time benefit costs, take-up and engagement,” he adds.

Utilising benefits data

That there is room for improvement in how employers leverage benefits data is something Cheryl Clements, head of business development at Tusker, also recognises. “People talk about data and there’s so much to look at, but many people don’t know what to do with it,” she says.

Employers should use data in a meaningful way to remove any guesswork, seeking to understand trends and behaviours, she adds.

For example, data showed Tusker that lower-paid employees could be helped by having access to 60-month terms and pre-loved cars. “These new options open up the car scheme, because the monthly costs for each vehicle is lower,” explains Clements.

Employers should also build a fuller picture by drilling down into different demographics to understand benefits take-up and perception, using the insight to deliver a more personalised experience; something employees increasingly expect, says Snow. Employers must track the impact of programmes, such as correlating benefit engagement metrics with measures such as employer net promoter scores (ENPS).

Charles Cotton, senior reward adviser at the Chartered Institute of Personnel and Development (CIPD), adds: “Data can help make a benefits package more effective. The data might show a lack of awareness of a certain benefit, which could be dealt with by a communications campaign. It may show a benefit is not valued, enabling employers to withdraw that perk and spend the money on benefits that are valued.”

This was the case for one of Tusker’s clients, which used data to inform a switch from offering electric cars only, to introducing ultra-low emissions cars. Take-up rates then shot up from 5.1% to 11.7%.

Technological advances

Advances in AI mean the possibilities for employers to inform and enhance their strategies have opened up even more. Lucie McGrath, European health, equity and wellbeing leader at Willis Towers Watson (WTW), says: “AI can help organisations interpret large volumes of data and provide them with meaningful and actionable insights about their employees. This data can inform and improve the design of strategies.”

However, it is not a given that employers are leveraging these advances strategically. According to WTW’s Wellbeing diagnostic survey data, published in September 2024, fewer than two in 10 organisations globally comprehensively use their data insights to inform decision-making and understand the impact of health and wellbeing programmes. “Very few employers leverage employee insights or health risk data to create a complete profile of their organisational needs,” McGrath says.

Data challenges

So, what are the barriers stopping employers making the most of the rich data associated with reward and benefits? McGrath cites “lack of consistency, quality and complexity” as common challenges. Snow adds “outdated systems, issues with integration, lack of resources and the sheer scale of the task” into the mix. Employers often struggle to connect various data sources from multiple providers and systems. Data management must be GDPR compliant and privacy requirements may differ depending on jurisdiction. Employees may be anxious or reticent about disclosing personal information, making communications and building trust vital.

To build a more data-driven strategy, employers should conduct staff listening exercises, learning what matters to people, says McGrath. She also advocates bringing in external industry data to build a fuller picture and benchmark more effectively, measuring impact to create compelling future business cases.

It is also essential to engage with providers, says Clements. They should help an employer understand what the data is saying and how to use it. “If using outsourced services, it’s important to work with providers that have specific experience in interpreting data correctly so that they’re not reading anything into it that isn’t there,” she adds.

For employers in the market for a new platform, Snow advises drilling down into five key areas: real-time information provision, visibility of global benefits spend, segmentation categories such as key demographics, spend forecasting, and external benchmarking. “Technology has a major role to play in providing employers with the data and insights they need to make more strategic decisions and deliver better outcomes,” he concludes.