Need to know:
- Artificial intelligence (AI) is already transforming the speed with which financial advice is delivered in the workplace, tailoring messages to employees, as well as helping them to make healthier lifestyle choices.
- In the near future, AI is expected to continue personalising information to increase employee engagement with benefits, leading to more take-up and increased productivity, loyalty and retention.
- AI systems need to be free of bias and covered by strong governance to gain employees' trust.
From virtual assistants to smart hairbrushes, AI is transforming everyday routines. It also has the potential to change how staff interact with their employee benefits, making products and services smarter and more engaging.
Practical application in the workplace is still in its infancy, but may be due for a considerable increase in take-up, says George Zarkadakis, digital lead at Willis Towers Watson. “AI is mainly used at the front end now, making it easier for employees to find what they need,” he explains. “There are obstacles, but this technology is very powerful and I expect we’ll see a huge change in its adoption over the next couple of years.”
Targeting advice
Although AI’s use within employee benefits is still fairly limited, it is already making its mark. As well as being used in benefits chatbots to direct employees to the most relevant content, it is transforming the speed and methods with which advice can be delivered.
This is especially true when it comes to imparting targeted advice, according to Phil Blows, sales director at Wealth Wizards. “[It can make] financial advice affordable and accessible to as many people as possible. It takes around 10 hours to conduct retirement advice but, by using AI, this can be cut down to 60 to 90 minutes.”
To do this, the AI system uses a series of algorithms. These take a range of inputs, such as the employee’s objectives and attitude to risk, and overlays this information with the benefit choices that are available to them to come up with personalised advice.
AI-driven coaching can also help employees make healthy lifestyle choices, and provide personalised health information. Dr Umang Patel, clinical director at Babylon Health, explains: “Our AI is built on machine learning, taking data from a range of sources, including the medical community and our own users. This is then used to triage employees, providing them with medical information and helping them access the most appropriate treatment.”
Personalising experience
Future developments are likely to take AI into even more areas of employee benefits, transforming enrolment and decision tools within flexible benefits, according to Dom Manley, UK technology product manager at Aon. “This will help employees understand the benefits on offer, personalising the selection and helping to present the ‘why’," he says. "AI could even start shifting how the applications engage with employees, giving a totally different experience.”
AI could also become more of a personal assistant for employees, helping them use benefits to support their working day, believes Chris Bailey, partner at Mercer Marsh Benefits. “It could look at areas such as an employee’s diary, travel, workload and health and suggest ways to work more efficiently," he says. “If someone has meetings solid between 10am and 3pm it might recommend making time for breakfast or block out an hour later so they can get to the gym. The workplace is a really powerful environment for AI: in the home you need to have lots of hand-offs between service providers to get full power, but in the workplace they’re all on the same platform.”
While this provides an advantage, external data could further personalise the experience. This could include employees’ personal details such as banking, shopping and data from wearables. Alastair Woods, partner in reward and employment at PricewaterhouseCoopers, explains: “An app could tot up an employee’s spending and translate this into an amount they’d need to save that month to buy the same things in retirement. It could be very powerful.”
Better outcomes for employees and employers
Using AI to deliver relevant content and perks will not only boost employee engagement with the benefits themselves, but also with the organisation as a whole. This can increase benefit take-up and also lead to improvements in areas such as retention and productivity.
It should also lead to better outcomes for employees, according to Lee Coles, head of workplace education at Jelf. “By making information more relevant to an employee, they are much more likely to act on it. This will lead to better habits and decisions.”
As an example, if a financial assistant helps an employee understand how much they need to save for retirement, and where they could make savings on their current expenditure, this insight could help them divert more money into their pension.
Where there are time and cost limitations when it comes to providing advice to all employees on a face-to-face basis, AI can deliver information to aid informed choices, with advisers stepping in to support those with more complex requirements.
Employers also benefit financially, with new approaches resulting in greater efficiencies in the way that benefits are used. This is particularly the case with health products, which often overlap. "AI could determine whether it’s more appropriate for an employee to use the cash plan, medical insurance or income protection to access treatment," Bailey explains. “By creating these pathways, employees receive treatment quickly, removing cost from the process.”
Data and trust challenges
While AI has the potential to create significant advantages for both employers and employees, it still faces a number of challenges. Data is probably the biggest of these. “AI is only as good as the data it uses,” says Zarkadakis. “It needs to be clean and labelled so it’s ready to train the algorithm. This often accounts for around 80% of the time in an AI project, but this will get better.”
In particular, it is important to ensure that data sets are free of any biases. For instance, AI can be trained to assess a CV and determine whether the candidate should be invited for interview; however, as the data is based on human input, discrimination might come through into the decisions. “If the data includes these biases there is a risk that AI could behave like we shouldn't have behaved in the past,” adds Zarkadakis.
Strong governance
Suspicion from employees around how personal data is used could also hinder take-up. To avoid this, there needs to be strong governance around any AI developments. This should oversee the accuracy of the information used to train the AI, but also ensure there are no breaches of data protection regulation.
There is also an element of fear around AI, with predictions that it will render many of today’s jobs redundant. However, while some roles will certainly disappear, there will also be positive developments for employees, notes Nick McClelland, commercial director at JLT Employee Benefits. “AI will help to reduce the amount of administration around employee benefits,” he explains. “This will give staff more time to focus on more interesting, strategic work. It could be very exciting.”
While there may be some substantial challenges to overcome, the advantages AI can bring mean there is no doubt it will be playing a much larger role in the workplace in the future.
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