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HR is turning to benefits automation for cost control, retention

Organizations are always looking for new and better practices to reduce costs and improve retention. What if there was a way to reduce costs for both the organization and the employee while also improving over-all employee recruitment and retention? Well, there is a way. Organizations nationwide are finding that automating their benefits management strategies is reducing employee healthcare costs as well as the administrative burden on HR staff while improving employee retention and candidate attraction efforts.

Eighty-nine percent of respondents to a survey, entitled "Benefits Management Benchmark: Technology Automation and Employee Self-Service," cited reducing benefits-related costs as a leading 2007 priority followed by lowering the administrative burden on HR. The survey, conducted by Aberdeen Group and NuView Systems, further revealed that 41 percent of respondents report that automating benefits enrollment and life change submissions through employee online self-service is a primary goal for dealing with benefits management.

What can be automated? Employee benefits aren’t the only employment practice that can be automated. "Communication of objectives, job function, knowledge sharing and notification of significant events are of enormous importance," said Shafiq Lokhandwala, CEO of NuView Systems who partnered in conducting the study. "Having a trigger event, notification engine, a wizard builder and an authorization hierarchy allows the automation of this information to occur while streamlining process, driving efficiency, and ensuring that all parts of a particular process are followed."

Consider, for example, just that which needs to be addressed when an employee is terminated:

• Payroll needs to be notified;
• Remaining vacation/PTO needs to be tallied;
• COBRA options need to be explained to the employee;
• Company property/assets need to be collected;
• IT needs to be notified to disable email and system access;
• Security needs to be alerted;
• Employees reporting to the employee need to be reassigned to another supervisor
• Department heads need to be alerted; and
• Corporate recruiters need to know about vacancy.

All of these steps can be automated based on the entry of one data field—a termination date as the trigger event—in the employee record.

Multiple advantages outweigh the risks

The advantages of benefits automation, employee satisfaction and a lesser HR burden, although hugely important, are not the only to be gained from benefits automation. "Each automated benefit transaction for open enrollment saves approximately $115.00 per transaction, eliminating the costs of paper form design, form printing, form distribution, mailing costs, form collection and data entry costs," said Lokhandwala. "Not to mention that on-line collection of benefit selections vastly improves accuracy, keying mistakes, etc. vs. paper based enrollment."

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