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To address the challenges of rising costs and the demands of a multi-generational workforce, employers and their brokers have been forced to deploy an increasingly diverse and often complex benefit strategy. In a world of “connectedness” and employee self-service, these complex strategies often lead to more employee disengagement, undermining the success of the overall benefit program.
There are three distinct underlying trends that are contributing to employee disengagement. First, unless you are intentionally “getting off the grid,” you know online overload is real. The average American has 130 accounts registered to one email address, according to online password management company Dashlane. Apply this to the world of employee benefits and one realizes every carrier, account administrator and program vendor has their own website or mobile app. And because they deal with sensitive information, each has its own user ID and password. Additionally, many of these websites support transactions that are only needed once a year by the average employee.
Not surprisingly, many of the benefit programs being rolled out by employers are plagued by underuse. Cost saving programs like telemedicine, pharmacy optimization and price transparency have adoption rates in the low single digits. This reduces their cost savings effectiveness and inhibits their integration into the overall benefit strategy. While the target population is often more than 50% of the employee population, most employers report engagement rates below 10%. Employers and brokers have told us they have a hard time keeping these programs “top of mind” and improving their ease of use.
Employee engagement has always been tricky. Even at employers whose HR departments have an aggressive communication campaign, 38% of employees complain that benefit communications are too infrequent. Perhaps it is because employee benefit communications are often associated with open enrollment or with adoption campaigns that don’t meet unique employee needs.
The trends causing disengagement
These factors below contribute to our current state of employee disengagement. While the trends are discouraging, a more detailed study of the wants and needs of employees and employers may lead to insights and potential solutions.
1) Employee wants: convenience, simplicity and cost savings. In all our surveys, employees repeatedly hone in on three areas of concern. First, they crave convenience. One click access, immediate connection with providers, simpler tools and guides. The list goes on and on.
Second, they are acutely aware of the impact of cost and risk shifting and desire more financial confidence. They are frustrated that they don’t know where they stand in terms of account balances, deductibles and out of pocket status. Additionally, while they report being frustrated, they describe the process of staying up to date on these items is so onerous they don’t even try.
Third, employees want to save money on their consumption of healthcare. However, when most have a need for themselves or a family member, they take the path of least resistance. This means often pursuing higher cost healthcare alternatives even when their employers have invested in more cost-effective programs. Common examples of this include going to urgent care instead of using telemedicine or taking their doctor’s recommendation for a branded drug or radiology facility when there are equally effective alternatives that could have saved them money.
2) Employer wants: productivity and benefit utilization. An employer’s desires are often a mirror image of their employees’ wants, but they are articulated somewhat differently. First, all employers want their employees to be more productive. A portion of that improved productivity can be gained by removing time-consuming tasks that tend to sap work hours. Simple inquiries about coverage, PTO balance, and other everyday questions are best answered during working hours. According to write-in comments in our surveys, employees report an hour of time during working hours spent finding answers to basic benefit questions.
Second, employers report they want increased utilization of cost saving programs and benefits designed to improve their employees’ lives and lower their overall benefits budget. The employer’s options can include programs like telemedicine, pharmacy optimization and cost transparency, but also programs like employee assistance and HR hotlines. These programs often report utilization in the low single digits, but through employee surveys and claim analysis, we know the optimum utilization is quite higher.
3) Mobile drives employee engagement. Where can we look to find the architecture for potential solutions? According to recent studies, 83% of Americans now have a smartphone and the average usage per day is measured in hours, not minutes. While smartphone applications vary wildly in their functionality, there are plenty of examples that keep people engaged, and often follow a very similar underlying architecture. By identifying and following this architecture, we can increase the rate of engagement for employee benefits.
A good example of this is Facebook. This app provides information people want to access frequently, specifically updates on friends and families. Facebook then involves the placement of highly relevant ads in your feed, co-locating information they want you to see adjacent to the information you want to have. Facebook also has the ability to integrate customized messaging that can pierce through the clutter of broadcast ads and email overload, keeping you engaged on what you want to see and what they want you to see.
We are seeing an explosion of mobile applications in the world of benefits. In fact, in a recent PricewaterhouseCoopers study, healthcare was at the center of the “Top 3 Mobile Trends for 2016.” However, like many first-generation websites, these initial attempts often merely repurpose low transaction information from benefits administration systems that fail to engage employees. Plus, the mobile functionality tends to not be replicated on the legacy platforms when a new platform is rolled out. This is an amateur mistake. After all, if 83% of Americans have smartphones, 17% don’t. Only providing new functionality on a mobile app immediately translates into lower opportunities for overall engagement. Finally, these mobile apps are typically vendor or program specific, failing to aggregate across benefit programs in a vendor agnostic way.
What is the architecture of this next generation, high transaction benefits application that will overcome the discouraging trends that inhibit employee engagement? These applications must provide highly relevant information employees need throughout the year. Information like their current position against deductibles and out of pocket maximums should be easily accessible. Other potential information includes account balances like 401(k), 403(b), paid time off and most recent paycheck stubs. While this information must be secured, it should not require the employee logging in to multiple websites. Providing this highly relevant information that is both desired and useful throughout the plan year will drive both downloads of the application and increase monthly active users. These two metrics are the ultimate measure of employee engagement in the mobile app world, and will be the greatest indicators of success in the benefits world as well.
Once employees have information they desire at their fingertips, these new applications should co-locate information about programs that employers are trying to promote. Easy access to information about telemedicine, pharmacy optimization, employee assistance programs and wellness programs are good candidates.
Single sign-on encourages benefit utilization
Another area of functionality involves single sign-on integration to the legacy benefits administration platform. Due to the association with the low transaction environment of open enrollment and life events, these systems have very valuable information that is easily underutilized. Information on currently enrolled benefits, plans and policies, and summary plan descriptions are just a few examples of the valuable content available within the benefits administration system. With single sign-on, utilization is encouraged through easier access.
Finally, these new applications should include messaging that can be customized to specific employees or employee groups. Like it or not, email is quickly losing its effectiveness as a reliable communication medium. In contrast, smartphone delivered messaging where we have a psychological incentive to “clear the red bubble” is still highly effective. Coupled with analytics, this capability could be used to securely reach out to specific individuals to increase their engagement with their benefits.
The evidence is clear. Year-round ROI depends on greater employee engagement. Overcoming the multiple obstacles to this engagement is critical for modern benefits professionals. While the next generation of mobile applications holds promise, employers and their brokers/consultants will have to diligently invest in these new technologies to ensure their objectives are realized.
