The 'Southwest Airlines approach' to benefits and enrollment
Recently I flew from Boston to Ft. Lauderdale on a Boeing 737 with engines made by General Electric. I had a window seat, Wi-Fi, and I got a Diet Coke on the plane. I reached my destination comfortably and on-time. A few weeks earlier, I flew on a Boeing 737 with GE Engines from Boston to Chicago. I had a window seat, Wi-Fi and a Diet Coke, but my flight was 45 minutes late and I was much less comfortable.
Same technology—very different experience. Why was that? The flight to Florida was operated by Southwest Airlines, while the flight to Chicago was on some other airline. Southwest relies on the same core technologies as most of the other airlines, but has still managed to shake-up the industry and become one of its most profitable players.
Southwest accomplished this by carefully examining every aspect of the airline business and changing whatever interfered with their passengers’ comfort and their own profitability. This not only lowered the airline’s costs and made flying more affordable, it raised service levels and built customer loyalty.
The same opportunity exists in many industries where technology may appear to be a big differentiator, but is simply a tool. Take the HR and the benefits business, for instance.
It’s the process stupid
Many benefit advisers seem to think that they should offer their employer clients the best possible “aircraft,” when what they should really be doing is refining the client’s service model to provide better outcomes. And with regards to the use of technology, advisers should be more concerned about how it can alter those outcomes—not how much it costs.
For many industries, the cost of technology is small compared to the cost of deploying it effectively. When flying from Boston to Chicago, the bulk of the cost is for things other than the aircraft. That only comes to around $30 per person per flight.
When it comes to HRIS, these same rules apply. The cost of the technology often pales in comparison to the cost of implementing, supporting and operating it. Yet many advisers are focused on the price tag, when they should be worrying about what it can do for the client. When flying from Boston to Chicago, inexpensive single-engine planes are not the optimal aircraft. Likewise, low-cost, but limited-function benefits enrollment systems can actually drive a client’s costs up, because of all the necessary workarounds.
The benefits business could stand to be a little more like Southwest. While their competitors search for a better jet, advisers should recognize that supporting their clients entails a much bigger picture. They can do a better job driving down an employer’s costs by refining its process, rather than beating up on some technology vendor. The former can not only reduce costs, but also bring about better results. What client doesn’t want that?