Thomsons Online Benefits - Innovation Generation - The Big HR Tech Disconnect 2019 20 - Final - Pages - Ext

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Contents
Introduction 4
The HR strategy shift: Tech in the driving seat 6

Drivers of change: the new world of work
A more holistic approach: top objectives for leading benefits strategies 7
Disruption danger: why employee engagement is even more vital today 9
Freed to deliver: time to focus on business goals 12
Out of the silo: benefits teams’ influence extends beyond HR 13
Consistency with flexibility: a global approach with regional touch 15
No longer conservative: how HR got ahead of the curve
Technology investment: where is the money going? 18
Best-of-breed: which systems are delivering the best results? 20
The more tech, the better: why investment gets results 23
Not there yet: why the tools are not up to the job 24
Where next? More investment needed to get the job done 25
Not yet delivering a better employee experience 26

Expectations are high: but workplaces are lagging behind
Still on the journey: benefits last to benefit from tech 27
So, what’s the next step? 28
The more the better: engagement increases with more applications (to a point) 30
Too much choice: can it be a bad thing? 33
Connectivity: it’s the order of the day—but the tools aren’t there yet 34
Wearables and wellbeing: the hot topics of 2019
Measuring and metrics: it’s all about the ROI 35
Link between benefits investment and employee engagement 37
The data disconnect 40

More to measure: organizations are playing catch up
Data collection: getting the business basics right
The data blindspot: benefits take-up lags behind 44
Misaligned with organizational goals: areas lagging behind 45
The new data landscape: a lot can change in three years
If it works why isn’t every organization doing it?
Hand in hand: the right data leads to better employee engagement 47
People analytics: the next piece of the data puzzle 51
Upskilling existing talent: how tech is transforming HR teams 52
Conclusion 54
Methodology 56
Appendix 56
About Thomsons Online Benefits 56
2019/20 report | 3
Introduction
Not quite delivering: HR tech today is not fit As consumers in the workplace, the personalized consumer-grade
tech experience we are used to in our personal lives is still not
for purpose being delivered.
When HR offer employees access to around 10 different tools

and apps, satisfaction scores rise significantly and employee
HR teams today increasingly see themselves as technological engagement score targets are met or exceeded.
innovators.
However, not every organization has the capability to ‘plug-and-
They recognize that technology has transformed the HR and play’ new apps and tools into a global HR tech ecosystem. Even
employee benefits landscape—enabling and empowering among those that do, many say that the ‘tools are not fit for
professionals working in this sphere to play a strategic, global role purpose’.
within their organizations. But more needs to be done. Delve down
into the findings of this research and an interesting disconnect So, in the coming years we can expect to see greater investment in
between how organizations view their use of technology and the technology to deliver a ‘globally consistent employee experience’, as
reality reveals itself. well as tech innovations to create a truly integrated, connected and
holistic global ecosystem.
Drivers of change: the HR strategy shift

The data disconnect: if you don’t ask, you
don’t get
Instead of reacting to change, HR professionals are increasingly
driving the change organizations need for a competitive advantage
at a time of growing digital disruption—whether that is upskilling
employees to work in a data-driven world or tackling declining While technology has played a pivotal role in enabling the HR
employee engagement through an increased focus on wellbeing. function to achieve more than ever before, without the data to
support their strategy HR professionals are often not being as
As a result achieving, a ‘globally consistent employee experience’ effective as they could be.
has shot up the list of priorities for HR professionals in 2019.
However, there is a mismatch between how organizations view the Our research found a disconnect between how organizations view
way they are delivering on this key objective and what is happening their approach to technology (innovative and ahead of the curve)
in practice. and the reality (they lack the data or expertise needed to measure
whether their benefits spend is helping achieve organizational goals).
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Our research found a However, over the next three years, nearly every organization will
be collecting vast amounts of data on their employees ranging from
disconnect between how engagement to wellbeing. It is this data that will transform the HR
and benefits function and those who work in it.
organizations view their The next step will be to analyze the data effectively to extract
approach to technology maximum value. To meet this need there has already been a massive
increase in the number of organizations that have implemented
(innovative and ahead of the people analytics teams in the last year and a half—with many
of those working in this field being upskilled, seeing their roles
curve) and the reality (they lack enhanced (rather than replaced) by technology.
the data needed to measure

whether their benefits spend is So what’s next?
achieving organizational goals).
It’s a huge step forward for the industry that so many HR
Take retirement as just one example. We all know that pensions are professionals now see themselves as innovators. But in order to be
one of the biggest spends in terms of benefits, with organizations truly transformative, organizations need a fundamental rethink. For
parting with billions of dollars each year to fund the retirement of a start, the employee experience needs to be top of HR’s agenda to
their employees. Yet, surprisingly, more than half of organizations ensure everything they do—including their tech strategy—is driving
are not using employee data to help forecast potential retirement towards improving it. However, only 1 in 3 HR leaders are making
scenarios and liabilities. This, in turn, can have a significant impact ‘redesigning the employee experience through technology’ a priority
on workforce planning (knowing when employees are likely to retire on their worklist for 2019.1
is vital), learning and development (longer working lives mean more
reskilling and upskilling), healthcare costs (older workforces are Organizations are planning significant investment in technology to
more expensive to cover) as well as pension provision. extract better value from their HR and benefits spend, but there
is still a long way to go to make sure they make the most of the
opportunity technology presents. Not only do HR departments
Analytics is the answer: everything will change need to make sure they are prepared by upskilling their teams to
make them more data-literate, but technology providers need to
over the next three years respond quickly in order to meet the demands of the market and
deliver tools that are fit for purpose.
1. Mercer Global Talent Trends 2019, https://www.mercer.com/our-thinking/career/global-talent-hr-trends.html
2019/20 report | 5
Chapter 1
The HR strategy shift:

Tech in the driving seat
When it comes to technology, the HR and benefits function is often driving change in the market, with organizational strategy created and
considered traditional and conservative. defined as a result of technological innovation.
Well, no longer. Our new research revealed that hardly any of those
working in the function today think of themselves in this way. Instead,
they see themselves as innovators, ahead of the curve when it comes
Drivers of change: the new world of work
to adopting new technologies, with rewards and benefits tech high on
the list of priorities.
“Your employees are your greatest asset” might be an overused
Employers have not only recognized the impact technology has
cliché, but like all clichés, it rings true: and it is the employee
on enabling HR and benefits professionals to deliver on their
benefits team that is increasingly responsible for delivering on the
organization’s strategic goals—they have moved swiftly from defining
business imperatives of attracting, retaining and engaging talent.
the systems they need, to investing in their delivery. Propelling this
investment is a shift in organizational priorities, driven by digital
The reason? The world of work is changing dramatically and
transformation, an urgent need to stem the growing skills gap and
nearly every organization is taking action to prepare for the new
increased focus on employee wellbeing.
skills landscape (figure 1). The number of executives predicting
significant industry disruption over the next three years has risen
Technology is now in the driving seat. In previous years, tech was
threefold from just 26% in 2018 to 73% this year. While the skills
more reactive, with solutions often created as a result of market
shortage is not a new issue and neither is digital disruption, what
demands and to meet the needs of organizations. But we have seen
stands out today is the urgency with which organizations are
a marked shift this year. Technology is now the main, proactive force
responding.
Figure 1 | 99% of companies are taking action to prepare for the future of work
Identify gap between current and required skills supply 52%

Develop a future-focused people strategy
51%
Adapt skill requirements to new technologies and business objectives 48%
Revise the workforce plan to close skills gap 45%
Identify how employees may support or disrupt changes 45%
Redesign jobs 43%
None of the above 1%
A more holistic approach: top objectives for
leading benefits strategies
HR and benefits teams now have a broad range of objectives;

reflecting a more holistic approach to delivering organizational
goals, with increasing responsibility and opportunity to add
strategic value.
Whereas attracting and retaining talent was by far the most

important objective in 2018 at 82%, this year enhancing employee
engagement has an equally high priority of 56% (figure 2)—
although it has to be noted that both of these show a sharp drop in
the space of just a year.
This swift shift in priorities reflects the global skills crisis and the
urgency with which organizations are responding to make sure
their employees are happy, productive and committed to the
organization in the long-term.
With the demand for skilled workers forecast to outstrip supply

HR professionals by 2030, organizations are increasingly fishing in the same talent
pool—and it is shrinking. As a result, there has been an inevitable
have moved swiftly shift towards focusing more on retaining and engaging existing
from defining the

employees than just attracting new ones.
systems they need, This has led to a sharp rise in ‘supporting global mobility’ and
‘driving individual performance’ as objectives in 2019. In fact,
to investing in their almost three times as many respondents cited these as one of
their top three objectives this year, compared to last.
delivery.
2019/20 report | 7
Figure 2 | Top objectives of benefits strategy 2018 vs. 2019
Enhance employee 56%

engagement
65%
Attract and
56%
retain talent
82%
Promote employee
52%
health and wellbeing
52%
Drive business
40%
performance
40%
Drive individual
29%
performance
13%
Support global
28%
mobility
9%
Reinforce corporate 28%
culture
33%
2%
Other
6%
2018 2019
Disruption danger: why employee As a result, organizations are now focusing on delivering a ‘globally
consistent employee experience’ (figure 3).
engagement is even more vital today
In 2018, organizations focused squarely on the inputs needed,
with ‘defining globally standard benefits design principles’ as their
second highest priority. Yet this year the output of these principles
While having the right people, with the right skills, in the right is their primary objective—with providing a ‘globally consistent
place is obviously essential, organizations increasingly realize employee experience’ jumping up the rankings from fifth to first
that during times of significant disruption there is a danger that priority (figure 3). HR are steadily moving from process (the
employees can become disengaged. This can be due to a number building blocks) to strategic, higher-level deliverables that have an
of factors, including detrimental impacts on company culture, impact on the wider business’s goals.
not being innovative enough to keep employees invested, or a
fractured approach to employee communications. This is driven by technology—which is being introduced quickly,
reflecting the huge importance organizations now place on
According to this year’s Global Talent Trends 2019 report from employee engagement. This is clear in the shift from benefits
Mercer, executives believe that ‘low or declining employee design to delivery in the space of just one year.
engagement’ is one of the top human capital risks their
organization faces.
Top human capital risks:
43% 31%
Low or declining employee Lagging productivity.2
engagement.
2019/20 report | 9
Figure 3 | Top five operational objectives 2018 vs. 2019
2018 2019
63% 1
74%
Tighter control of global costs Globally consistent employee experience
56% 2
66%
Globally standard benefits design principles Tighter control of global costs
54% 3
61%
Consistent global governance Reducing data and operational risk
48% 4
60%
Reducing data and operational risk Global employee wellbeing programs
46% 5
59%
Globally consistent employee experience Automating administration processes
It’s no surprise to see ‘tighter control of global costs’ is still a key
operational objective, up there at number two, followed closely
by ‘reducing data and operational risk’, as these continue to be
pressing issues for many organizations. The rise in importance
of ‘reducing data and operational risk’ could also be attributed
to an increased focus on data security in a post-GDPR world—
especially in global organizations where a lot of work has gone into
ensuring compliance internationally.
HR teams’ increased focus on ‘global wellbeing programs’ mirrors

a rise in our collective cultural consciousness when it comes to
mental, physical and financial wellbeing.
This year more respondents

agree that employee wellbeing
is on senior leaders’ agendas.3
Research linking improved employee wellbeing with improved

productivity has been around for many years. Yet the global
conversation around wellbeing and mental health in particular
has forced organizations to make this a priority. According to
the World Health Organization, depression and anxiety cost the
global economy US$1 trillion per year in lost productivity.4 This
is an issue that extends beyond the need to have an engaged
workforce – there are significant financial implications for the
whole organization.
Secondly, ‘automating administration processes’ is now the

fifth most important priority for six in 10 teams. This is a clear
indication that HR professionals not only want to free up time
previously spent overloaded with admin, but that they also see
investing in technology as essential to their ability to make a
difference to their organizations on a global scale.

4. World Health Organization, https://www.who.int/mental_health/in_the_workplace/en/
2019/20 report | 11
Freed to deliver: time to focus
on business goals
So what is empowering HR professionals

to deliver a globally consistent employee
experience? The answer—significant
investments in technology.
Stephen Migliaccio Although improving the employee

Director, Global Provider Automation experience has been high on the agenda
for a number of years, it is only recently
that companies have equated the pivotal
role that technology plays in delivering
this. This doesn’t stop at an engaging
front-end; arguably, the data and analytics
that underpins it is more valuable.
Simply put, the benefits
supply chain is broken.” As a result, a significant number of HR
teams see themselves as technological
innovators, who are using increasingly
The process of delivering a product from a provider, for example integrated global technology. This tech-
medical insurance from an insurance company, to consumer, in driven people strategy is allowing them
this case the employee, is still incredibly complicated. to switch up a gear (or two) from being
process-driven providers of basic benefits,
While benefits technology and intermediaries have helped to being in the driving seat when it comes
streamline processes, even today, many parts of the delivery cycle to helping deliver on organizational
still require human interaction. This leads to increased scope for strategy. However as we will see later
error, more time spent by teams on administrative tasks, and a in this report, there is still more to be
clunky employee experience. done, particularly as many teams are still
struggling to harness the power of data
One massive contributor to this is the preponderance of flat file analytics.
movement of data. To create an efficient process, we must drive
the industry to adopt real-time automation, where data moves
seamlessly from system to system via APIs—as is the case in
financial services, for example.
Out of the silo: benefits
teams’ influence extends
In a talent
beyond HR economy,
employee pride
This shift in focus is also enabling the
has become an
employee benefits function to have a issue of business
broader impact on the wider business as
a whole. A great example of this is their strategy.6
impact on brand perception. A great
employee experience, and by extension a
strong base of employee advocates, has
as much of an impact on an organizations’ So, in terms of priorities, objectives and
brand as their marketing efforts do. technology investments to deliver on
these, HR teams are in a very different
position to just twelve months ago. This is
HR is as much happening at an incredibly fast pace—it’s a
transformation more than an evolution.
a custodian of
the brand as
the marketing
department.5
Employee benefits teams are also playing a
role in global talent mobility – historically
part of organizational strategy – to
ensure employees feel connected to their
organization at every stage of their move.
5, 6. Mercer Global Talent Trends 2019, https://www.mercer.com/our-thinking/career/global-talent-hr-trends.html
2019/20 report | 13
Figure 4 | Regional objectives and how they vary
80
60
% of organizations
40
20
Globally Reducing Tighter Reducing Automating Tighter Predicting Globally Global Alignment to Consistent
consistent data and management global administration control of future benefits standard employee global shared global
employee operational of vendors insurance risk processes global costs costs benefits design wellbeing service governance
experience risk programs model
Asia Africa Europe Latin America Middle East North America Oceania
Consistency with flexibility: No longer conservative: how
a global approach with HR got ahead of the curve
regional touch
We found that organizations are incredibly

Technology is integral for organizations to
achieve their objectives. It is the driving
1/3
force behind many of the trends examined
focused on global consistency across
earlier in the chapter, and the solution.
all regions—and not just in terms of the
employee experience, but also cost control
As we have already seen, organizations
and even global employee wellbeing
have moved rapidly from design to delivery class themselves as
programs.
while automating administration (which has ‘innovators’.
risen up the list of priorities in 2019).
However, depending on how evolved the
function is, organizations have different
However, what really stands out is how
priorities in different regions (see figure 4).
they view their approach to technology
1/3
investment.
This throws up a few anomalies. Tighter
management of vendors is a low priority
Almost a third of respondents class
in Oceania, for example, where costs are
themselves as ‘innovators’ (figures 5 and
already tightly controlled. Whereas, in
6) while a third term themselves as ‘early
Latin America this is one of the highest
adopters’.
priorities.
At the same time, HR, which has
The alignment to a global shared service
model on the other hand, is a similarly high historically been seen as a conservative class themselves as
priority across all regions, reflecting the function, has moved on—just 7% ‘early adopters’.
of respondents view themselves as
fact that this remains a key focus globally.
conservative tech adopters.
So what is clear is that organizations need
There is very little difference in how
global capabilities from their technology,
respondents treat investment in HR
7%
but with the flexibility to adapt to regional
technology with any other type of
needs.
technological investment—they are just as
willing to take a chance on new technology
in the HR function as in any other area of
the business (with the results in figures 5
and 6 very similar).
view themselves as
conservative tech
adopters.
2019/20 report | 15
In fact, if you add up the innovator/early Figure 5 | When considering adoption of new technology in
adopter/early majority replies HR comes general, your organization is:
slightly ahead (83% compared to 82%
for those adopting new technology ‘in
general’). This proves that when it comes
to HR technology, the vast majority
recognize that this is a key area of 7%
investment they need to make to deliver
on their organization’s goals. 10%
32%
Yet while they may be innovators, many
are still in experimental stages and are
not making the most of this technology,
nor the data they can mine from it –
something we will explore in detail in
Chapter 3. 20%
31%
% of organizations
An innovator (the first An early adopter (willling Part of early majority

to adopt new technology) to take a chance on a new (willing to adopt new
technology for competitive technology once peers
advantage) are adopting it)
Part of late majority Conservative (risk averse,

(willing to adopt only comfortable adopting
technology once it well-understood or well-
becomes standard) established technology)
Figure 6 | When considering adoption of new HR technology, your organization is:
33%
An innovator (the first to adopt innovative new technology)
27%
An early adopter (willing to take a chance on new technology for competitive advantage)
23%
Part of an early majority (willing to adopt new technology once peers are adopting it)
10%
Part of a late majority (willing to adopt technology once it becomes standard)
7%
Conservative (risk averse, only comfortable adopting well-understood or well-established technology)
2019/20 report | 17
Technology investment: where technology’ actually comes out on top,
seeing a huge surge in importance as
is the money going? organizations begin to realize the impact
well-designed and delivered benefits
programs can have on their top objectives.
Now we have examined the priorities and If you look at the top three priorities for
objectives of employee benefits teams, and technology investment in this financial
discovered how they classify themselves year, what is also significant is that they
in terms of innovators/early adopters of are all broadly similar in terms of rankings.
technology, let’s explore what they are
actually investing in (figure 7). This reflects the more holistic approach
teams are working towards (in terms of
‘Learning and development’ tops the list priorities and objectives. As HR teams
for respondents’ first choice. If we look look for a broad-approach to address
back to the start of this chapter and organizational priorities, they need to
the urgency with which the C-suite is invest in automating HR operations,
preparing for significant disruption, then reward and benefits and learning and
this makes sense: upskilling employees development to achieve these goals.
in this age of digital transformation is a
top priority. So it stands to reason that Interestingly, HR operations is the only
investing in technology to deliver on this one of these that is not employee-focused
objective is now high up the agenda. and is evidence of the increased focus on
centralized teams to deliver on a global
However, if respondents’ first and strategy.
second choices are taken into account,
then investing in ‘reward and benefits’
Figure 7 | What areas are being prioritized for technology investment in this financial year? (1=highest priority, 6=lowest)
Learning and
development
Reward and
benefits
HR operations
Payroll
Talent and acquisition
HR shared services
0 20 40 60 80
% of organizations
Priority number:
1 2 3 4 5 6
2019/20 report | 19
What is equally interesting is what is less of a priority. Well, around half of organizations are now using ‘best-of-breed
integrated ecosystems’; with 48% of respondents (figure 8) saying
HR shared services comes in at number six in the list, that best describes their HR technology landscape. With 32%
representative of the fact the technology to support HRSS has of respondents self-styled innovators and 31% early adopters
been well embedded for some years, so is no longer a top priority of technology, this is obviously the way the market-leaders are
for most organizations. Employee benefits teams cannot achieve moving.
their objectives – particularly a globally consistent employee
experience – without this in place. HR teams need global
consistency, with the ability to tailor locally—platforms must
deliver on this or risk becoming obsolete.
Figure 8 | What best describes your current HR technology

landscape?
Best-of-breed: which systems are delivering
the best results?
13%
So, what technology approach works best for HR teams?
48% of respondents are now

using some form of 48%
best-of-breed integrated
ecosystem.
39%
% of organizations
A best-of-breed A single HCM Decentralized - solutions

integrated ecosystem system at local market level
These best-of-breed ecosystems are also associated with much However, it is worth noting that this could also be a failure of the
better outcomes than decentralized systems. right data management as nearly a third (32%) say they ‘don’t
know’ when it comes to performance against targets. This is a
Respondents who have chosen these systems are much more significant oversight – if they do not know if their benefits spend
likely to be exceeding their employee engagement targets—with a delivers in terms of employee engagement score targets, how can
‘best-of-breed ecosystem’ also associated with very high levels of they know they are spending their budgets effectively?
satisfaction with ROI (figure 9).
When it comes to a ‘good return’ on your benefits investment, a
Decentralized solutions may cater to the needs of the local best-of-breed integrated ecosystem – using the leading software
workforce, but they cannot deliver when it comes to global applications for each specific need – outperforms a single HCM
consistency, nor managing and reporting on benefits globally. system significantly. In fact, 88% of organizations with a best-of-
Given that organizations now have a ‘globally consistent employee breed approach have a very good/good ROI compared to 68% of
experience’ as their top priority, this is a failure on many levels: less those with a single HCM system.
consistency, less global oversight and, in turn, a poorer employee
experience.
Figure 9 | Of organizations using a best-of-breed ecosystem approach:
88% 89%
are above or on track to meet are satisfied with the ROI of
their employee engagement their benefits spend.
score.
2019/20 report | 21
As ‘tighter control of global costs’ remains the second priority for Figure 10 | What best describes your current HR technology
organizations, best-of-breed integrated ecosystems are the clear landscape? And do you think you get a good return on your
winner, delivering on both employee engagement and ROI. benefits investment?
Once again, decentralized solutions perform poorly—partly due

to a lack of data, with half (50%) of organizations left in the dark,
either not measuring the ROI or not knowing what it is.
80
This is shocking given the vast amount most organizations spend
on benefits—more than half (56%) spend upwards of 15% of
employees’ base salary on benefits—not to mention the increasing
reliance on these benefits to boost employee engagement. 60
% of organizations
More than half (56%) of 40
respondents spend upwards

of 15% of employees’ base 20
salary on benefits.
0
A single A best-of-breed Decentralized -

HCM system integrated solutions at
ecosystem local market level
I’m satisfied we I’m satisfied we I’m unsatisfied I’m very unsatisfied

have very good ROI have good ROI with our ROI with our ROI
We don’t measure this Don’t know
The more tech, the better: why investment Figure 11 | Satisfaction with functionality of HR systems
gets results
Integration with
other applications
Purchasing technology on a global, rather than a local level,

also delivers other benefits, with organizations more likely to be Data analytics
satisfied with the functionality as a result. capabilities
Figure 11 analyzes the satisfaction of respondents with their HR

systems by comparing findings between those who bought them Data security
at a global level rather than regional, and at a regional level rather
than national. There is a clear increase in levels of satisfaction
when they are purchased at a global level, compared to regional Front-end
and local. usability
Some of the more noticeable differences in satisfaction levels,

Back-end
aside from automation, are in terms of data analytics (31% usability
satisfaction at national level but 49% for global systems) and
general reporting capabilities (32% satisfaction at national level
% of organizations
but 55% for global systems). With the need to collect and analyze Single sign-on
data being vitally important in driving employee engagement (and
measuring ROI) these are significant discrepancies and are likely
to hamper the ability of HR and benefits teams when it comes to
delivering organizational goals. Open API’s
As we have already seen, global systems can still provide flexibility

to tailor benefits to meet local priorities and deliver when it comes Automation
to global governance, cost control and consistency.
More organizations are also devising and rolling out their benefits Data
strategy at a global level (34%) – this is slightly behind national sharing
level (39%) – showing there is a need for technology that
supports a global approach without local compromise.
General reporting
capabilities
Communication
0 20 40 60
Bought systems at a:
National Regional Global
level level level
2019/20 report | 23
Not there yet: why the tools are not up to Figure 12 | Barriers to HR technology investment
the job
68% Tools not fit

for purpose
The overall findings of our research are incredibly positive—

particularly for organizations using globally-integrated ecosystems
to deliver employee benefits across regions. 60% Lack of C-suite or
board-level buy in
HR teams are also positive about technology adoption, with many
58%
believing they are innovators and early adopters. Other business priorities
(e.g acquisitions,
divestitures etc.)
The research also shows that the HR function is increasingly
automated. With their time free from admin burdens they can play
an important part in delivering organizational goals—extending
their reach into strategy and acting as key drivers of both business 31% Concerns around the storage and
use of employee data
and individual performance.
Yet HR teams still believe they are restricted from really fulfilling
their potential.
26% Lack of time
on the team
As we explore in Chapters 2 and 3, while HR professionals are

experimenting, they are not yet in a position to fully exploit new
technologies such as wearables or integrations with providers.
23% Too many HR systems
already in place
Neither are they fully harnessing the power of data analytics.
A future where benefits can be adapted or introduced in response

to individual needs and where the impact on performance both of
22% Already made a large investment in HR
technology in the last five years
the business and the individual can be easily measurable, even in

real-time, feels out of reach for many.
12% Unsure how it connects to the
organization’s wider goals
So, what is standing in the way?
Well, HR teams are crying out for better tools and this year’s
research reveals they are coming up against some huge barriers This suggests that while many organizations believe
for investment (figure 12). themselves to be innovative when it comes to technology
adoption, the reality is different. Either more needs to
The biggest of these is that tools on the market today are simply be done to help educate these organizations to make the
‘not fit for purpose’, and even if they were, there is a lack of right purchase, or too often they have to make do with
boardroom ‘buy-in’ to fund their purchase. technology that is not up to scratch.
While board members may want to prioritize redesigning
jobs and acknowledge that ‘low or declining employee
engagement’ is a major risk, they are not prepared to fund
further investment (yet).
Where next? More investment needed to

get the job done
Matthew Jackson
Organizations have moved swiftly from design to delivery Vice President - Proposition and Client Solutions
when it comes to technology – with further investment on
the agenda this year to drive the delivery of key areas such
as learning and development and reward and benefits. It’s great to see that multinational companies are now ‘walking
However, organizations are also still reporting that their the walk’ when it comes to leveraging technology to deliver on
HR systems are not really delivering everything they engagement and operational strategies. The success of the early
need - particularly when they have purchased these on a adopters – and also lessons learned – has created a best practice
national rather than global level. guide for companies to follow. That said, there is still plenty of
room for companies to continue to innovate and take advantage
The stark differences in satisfaction levels between of the opportunities that the ever-changing competitive landscape
organizations with global HR systems and national/ presents them.
regional ones, and the higher satisfaction ratings for
best-of-breed ecosystems, points to more significant As companies embed technology to support shared service
innovation (and investment) needed over the next few delivery, ensure a globally consistent yet locally relevant employee
years. experience and also positively impact the wellbeing of employees,
the next challenge will be to make sure multiple best-of-breed
This is not an ‘if’ but more of a ‘when’. These systems are technologies work in harmony—from an operational, employee
the best way to deliver what the C-suite is demanding— and data perspective. If companies get that right, the payoff is
improving employee engagement while at the same time clear as demonstrated by the 88% of companies with a best-of-
preparing for ‘significant’ disruption. The right technology breed ecosystem approach who report over—achievement on
is essential to deliver on these objectives. their engagement targets.
The fact that nearly 7 in 10 also report that the tools

they need are currently ‘not fit for purpose’ also points to
significant product development (particularly in terms of
apps and integrations) over the coming years.
2019/20 report | 25
Chapter 2
Not yet delivering a better

employee experience
A ‘globally consistent employee As a result: Expectations are high: but
experience’ is the number one objective
workplaces are lagging behind
this year—an issue that has seen a
significant increase in importance since
Three-quarters
2018. And a great employee experience
relies on technology.
of organizations
say they are still Our lives are dominated by technology.
We are becoming increasingly digitally
So it is no surprise that organizations
offering around 10 different apps or on the journey to dependent, with a need to be constantly
connected—in the UK the average Brit
tools to their employees are reaping the
benefits, with above-target employee providing a fully checks their smartphone every 12 minutes
of the working day while globally we spend
engagement scores. However, there needs
to be consistency, and all these tools digital experience an average of six and a half hours a day
need to be working together. Without
this, organizations run the risk of creating
for employees.7 online.
disparate technology and data silos that It is not just our smartphones that are
don’t deliver any real value. getting smarter—so are our homes with
the world market for Internet of Things
Organizations also need to be able to (IoT) devices expected to soar to more
‘plug-and-play’ different tools and apps than 64 billion devices by 2025. With
into their technology ecosystem, to give the global population forecast to rise to 8
them the flexibility to respond to the billion at that time, that means an average
ever-changing demands of their global of eight IoT devices for every person on
workforce and deliver an exceptional earth. This includes smart speakers, smart
employee experience. Yet, employers appliances and wearable devices, which
aren’t able to achieve this. Without this are set to grow exponentially to 1.1 billion
connectivity, they are struggling to add worldwide by 2022.
extra functionality on. And of those
organizations who state they can do this So, as consumers, we not only own more
today, many are still struggling with tools technology than ever before but we also
that are ‘not fit for purpose’, hampering expect it to be intelligent and intuitive.
their ability to innovate. Yet, enter the workplace and the tech is
often lagging behind… particularly when it comes to the employee
experience, despite this being is a high priority for organizations.
It’s therefore no surprise that the overwhelming majority of

employees surveyed by the human capital management think
tank, The Workforce Institute, wish their workplace technology
was as powerful as their personal technology and delivered the
same experience.8
So, there is clearly no other option; to meet employees’

expectations, HR and benefits technology needs to get smarter.
Still on the journey: benefits last to benefit

from tech
When HR departments began their digital journey some years

ago, the focus was on redesigning HR processes and improving
service outcomes. HR teams have come a long way on that
journey when it comes to the candidate experience and even
More than half of all learning and development…but the employee experience, when
looking at it in its entirety, is still behind.
employees surveyed
worldwide (55%)
agree it is easier
to search for new
movies on Netflix
than to check the
details of their
employee benefits.9
7. Mercer Global Talent Trends 2019,

https://www.mercer.com/our-thinking/career/global-talent-hr-trends.html
8, 9. The Workforce Institute, https://workforceinstitute.org/workplaces-falling-
behind-todays-on-demand-culture-user-friendly-technology-a-top-priority-for-2019/
2019/20 report | 27
3 in 4 HR functions use Figure 13 | Top five AI investments for HR this year
state-of-the-art digital tools

such as games and mobile 1
41%
apps to support employee Chatbots to improve employee
development… self-service
Yet, only 1 in 3 HR leaders 2

40%
are making ‘redesigning the AI to identify employees at risk
employee experience through of leaving
technology’ a priority on their
worklist for 2019.10
3
39%
AI to recommend job openings
Part of the delay is due to the fact that three-quarters of
and career paths
organizations are ‘still on the journey to providing a fully digital
38%
experience for employees’.
So, what’s the next step? 4

AI as part of the performance
management process
38%
Addressing employees’ increasing expectations of consumer-
grade technology at work, remains one of the C-suite’s top
workforce concerns.
This is mirrored in the research, which shows that HR 5

enhancements are high on the list of proposed technology AI to customize compensation
investments this year (figure 7). or improve pay benchmarking
Source: Mercer Global Talent Trends 2019

Increasingly these tech investments will a vital part of attracting and retaining the
involve intuitive and intelligent systems, best talent.
with AI high up the investment agenda
according to the Mercer’s Global Talent So, while organizations have placed an
46%
Trends 2019 report (figure 13). emphasis on the employee experience
being ‘globally consistent’ what they also
All these enhancements—whether it is need is the ability to manage delivery on
learning and development or customized a regional or local level, ensuring true
compensation—are geared towards the local relevance for employees. They then
individual and it’s this personalization that need to go one stage further, enabling
delivers a more engaging experience for employees to interact with their benefits
employees. through a consumer-grade experience.
How are they working towards this goal?

Additional benefits Well, as we saw in Chapter 1, the most
effective way is through a best-of-breed
for high performers ecosystem. This not only allows for third-
party connectivity to automate processes,
of organizations with best-
of-breed ecosystems are
are one of the but gives organizations the ability to above their annual employee
top three things
quickly trial new technologies to see if they engagement score targets.
are having an impact on their employee
employees say wellbeing and engagement and therefore,

providing a good return on investment.
would improve their Organizations managing their benefit
performance.11 functions in this way see much higher
engagement scores as a result.
However, getting the employee benefits

proposition right is not just a means of
boosting individual performance.
It is widely recognized that there is a

link between the employee experience
and attracting talent. However, this
is about more than great benefits, it’s
about immersing employees in a great
experience, which in turn, improves the
employee proposition—something that is

2019/20 report | 29
The more the better: engagement increases
with more applications (to a point)
Being able to plug-and-play applications has a number of benefits:

reward teams can quickly find out what works (in terms of
increased employee engagement, wellbeing, retention etc.) and
then adapt their benefits offering to ensure a better ROI.
That’s why, generally speaking, the more HR software applications

respondents have, the better they perform against their employee
engagement target and the more satisfied they are likely to be
with their benefit spend ROI (figures 14 and 15). Although there
is a tipping point once the number of applications exceeds 11.
This approach also enables organizations to deliver their number

one objective—a ‘globally consistent’ employee experience. They
are able to manage their benefits technology ecosystem at a
global level, while configuring and tailoring offerings at a local
level.
89%
of organizations would value
easy-to-use ‘plug-and-play’
style applications within their
technology ecosystem.
Figure 14 | How many HR software applications are you using across your organization?
And how are you performing against your annual employee engagement score target?
11+
10
8
No. of HR software applications in organization
0 20 40 60 80
Employee engagement score target:
Above On track Below Don’t know
2019/20 report | 31
Figure 15 | How many HR software applications are you using across your organization?
And do you think you get a good return on your benefits investment?
11+
10
8
No. of HR software applications in organization
0 20 40 60 80
% of organizations
I’m satisfied we have very good ROI I’m satisfied we have good ROI I’m unsatisfied with our ROI
I’m very unsatisfied with our ROI We don’t measure this Don’t know
Too much choice: can it be a bad thing?
Offering more diverse rewards

and compensation is this year’s
number one rewards priority.*
*Mercer’s Global Talent Trends 2019
However, helping people make choices is not just about giving

them more options.
This is especially true for flexible benefits, where too many

irrelevant choices can lead to little return. In fact, as you can see
from figure 14, employee engagement actually slips once the
number of applications exceeds 11.
For benefits teams to help select and signpost the most suitable
apps and tools for different employee groups, they need reliable
data on benefit take-up levels, and employee satisfaction with
each. However, as we will see in the next chapter, many HR teams
still do not have this data.
This approach also needs a more integrated people strategy,

something identified in the Mercer Global Talent Trends 2019
report as being important to strategy effectiveness. The various
apps and tools that are increasingly offered to employees might
span talent acquisition, compensation and benefits, mobility and
learning, but these are often managed by HR silos which ‘can
create a fractured employee experience’. So HR professionals
need to come out of these silos and ‘integrate’ their people
strategy for it to be truly effective.
Once again, this will see HR and benefits teams’ roles evolve more
strategically over the next few years.
2019/20 report | 33
Connectivity: it’s the order of the day—but the Even when they have a system that allows plug-in applications, a
significant number (44%) still say there are issues: topping these
tools aren’t there yet is that ‘tools are not fit for purpose’ which is the number one
barrier to HR technology investment (figure 16).
Respondents are overwhelmingly positive about the value of

having easy-to-use ‘plug-and-play’ applications within their overall Wearables and wellbeing: the hot topics of
HR systems (89%), with figures 14 and 15 showing the optimum 2019
number of applications is around 10. Yet over a quarter of
organizations have software that doesn’t allow for plug-and-play-
style apps in any capacity.
One area that is rising up the agenda is employee wellbeing.
While other HCM systems do allow for this in principle, they are While it’s not a new topic, it is now the fourth highest priority
hampered by the fact that this functionality still does not equate for organizations, with employers increasingly recognizing that
to a truly integrated ecosystem – they are not at the heart of a wellbeing apps and tools can improve the employee experience
truly holistic ecosystem. This, connectivity in turn, makes it more (and the health and happiness) of their employees.
difficult to achieve the global consistency that organizations now
prioritize. Wearables in the workplace driving wellbeing include Fitbits,
heart rate monitors, Apple watches and other wearables, mainly
in relation to fitness tracking. Currently only 33% of global
employers collect data from these, but this will soar to 81% within
the next three years. Interestingly, by 2020 83% of organizations
Figure 16 | Looking only at respondents with
will also be collecting data generated from building sensors, on
HR software that allows plug-in applications:
employees’ footfall or desk time for example, in a bid to create a
more engaging and healthy working environment (figure 23).
These wearables are often adopted as part of a preventative

strategy in an effort to help employees stay well, rather than just
44%
providing them with benefits to help when they become unwell.
And this doesn’t stop at physical wellbeing. More needs to be
done to help with mental and financial wellbeing. This can include
more comprehensive employee assistance programs (EAPs),
or providing access to mental wellness apps such as Calm and
Unmind, and tools to help with budgeting, workplace ISAs or
saving tips. However, once again organizations need an integrated
ecosystem for these to be effective—not only can they introduce
these tools more quickly, but also track their use and impact on
engagement scores as well as employee wellbeing.
cite ‘tools not fit for purpose’

as the top barrier to HR
technology investment.
Measuring and metrics: it’s all about the ROI
So how do these investments fit into the bigger picture?
In many organizations the investment in technology is already

paying off—and should continue to do so. After all, if an
organizations’ leadership is satisfied with the ROI they are
achieving, it makes the business case for further investment in
technology that much easier. Matthew Jackson
The positive news is that, on the whole, respondents are satisfied
Vice President - Proposition and Client Solutions
with the return they get on their benefits investment (and the only
way they can measure this is through technology).
The continued focus on wellbeing and in particular mental health
is truly wonderful to see. Yes we can create technologies that are
More than third say they have nice to use, intuitive, personalized and so on—but it is imperative
a ‘very good’ ROI on their

that we are helping to create real, tangible outputs and positive
impacts on our employees’ lives.
benefits spend Whether that is easy access to online workouts while on the road
…with a further third calling travelling for business or a short audio series helping new parents
adjust to balancing family with work—we have to be thinking about
their ROI ‘good’. the end result of what technology is looking to achieve.
There are some organizations who are still in the dark though.
More than one in 10 respondents admit they don’t measure their
benefits spend ROI (see figure 17).
2019/20 report | 35
Figure 17 | Do you think you get a good return on your Figure 18 | Is your leadership satisfied with the ROI on
benefits investment? your organization’s benefits spend?
39% I’m satisfied - we have very good ROI

37% Very satisfied
35% I’m satisfied - we have good ROI

38% Satisfied
8% I’m unsatisfied with our ROI

6% Unsatisfied
1% I’m very unsatisfied with our ROI

12% We aren’t asked to report
12% We don’t measure this

7% Don’t know
6% Don’t know
ROI is obviously important, but it’s not just about ensuring value
for money. Respondents who are satisfied with their ROI (and
whose leaders are satisfied with their ROI) are much more likely
to be exceeding their employee engagement target scores.
For respondents who are unsatisfied with their benefits ROI

the opposite is true – they are more likely to be missing their
employee engagement targets.
Senior management either need to be looking at this or HR

departments need to be driving the agenda with solid data and
analytics.
Link between benefits investment and Combine this with scores on annual employee engagement, and
correlate them, and you discover a very clear link between the two
employee engagement as we can see from figures 19 and 20.
Organizations were asked:

So we have established in figures 17 and 18 that a large number Do you think you get a good return on your benefits investment?
of organizations are satisfied with the ROI on their benefits And how are you performing against your annual employee
investment. engagement score target?
As you can see, nearly six in 10 organizations who have a very
Figure 19 | How ROI on benefits investment correlates with employee enagement
I’m satisfied - we
have very good ROI
I’m satisfied - we
have good ROI
I’m unsatisfied
with our ROI
I’m very unsatisfied

with our ROI
We don’t
measure this
Don’t know
0 20 40 60 80
% of organizations
Progress on annual employee engagement score target:

2019/20 report | 37
good/good ROI are exceeding their annual employee engagement Perhaps HR teams should challenge themselves to review their
score targets. measures of engagement to ensure they are really rigorous
enough—after all, why are they not happy with the return on their
However, surprisingly all of those (100%) who are very unsatisfied investment? There must be a reason. Surely, if their employee
with their ROI are still at least on track with their employee engagement scores are on track, they should feel the same
engagement scores. way about their ROI. Or is the issue the fact that they are not
measuring employee engagement accurately? This is obviously an
area that needs more focus.
Figure 20 | How leadership satisfication with ROI on benefits investment correlates to employee enagement
Very satisfied
Satisfied
Unsatisfied
Don’t know
We aren’t asked
to report
0 20 40 60 80
% of organizations
Progress on annual employee engagement score target:

The results of this question are broadly similar and
once again show that being very satisfied with benefits
ROI is strongly linked to having an above-target
employee engagement score.
However, there is an anomaly—three in four

leadership teams are unsatisfied with their benefits
ROI and yet still believe their employee engagement
score is on target.
Perhaps, the issue here is that their employee

engagement scores are not accurate enough or they
Jonathan Day-Miller
do not have enough data (or the right data) to make Director - Enterprise Consulting
the correlation between spend and engagement—
something we explore in the next chapter.
Technology is so pervasive. That can be a good thing, or a bad
thing. One thing that is certain is that it presents an opportunity
to create seamless transitions across an individual’s work and
personal life, supporting a better work/life blend that has been
talked balance. This means that any aspect of an employee’s
day that doesn’t deliver on this seamless experience, stands out
and has a potentially inflated negative impact on an employee’s
perception of their reward, job, or company. The research shows
that organizations have laid the large foundational blocks needed
to digitize the employee experience and are now focusing on
the other key areas that have a tangible impact on employee
engagement—like L&D and reward and benefits.
In all this, connectivity is key. We are awash with innovative

technologies that each offer something valuable to employees—
but if we operate in an infrastructure that doesn’t encourage
open and simple connectivity, we are missing out on so many
opportunities to engage our employees and create advocates for
our companies. We must be smart with what we choose, but we
must also break down barriers preventing us from being agile and
fast to change.
2019/20 report | 39
Chapter 3
The data disconnect

Without big data, you are blind More to measure: organizations are playing
catch up
and deaf and in the middle of a
freeway.
Organizations reveal that they are playing serious catch-up. The
Geoffrey Moore, next three years are going to be transformative as the analzying
Organizational theorist, management consultant and author. and harnessing of employee data becomes an organizational
priority. In the three fastest growing areas of data collection, the
use of data to measure key areas of employee benefits will more
This report clearly shows a discrepancy between what than double in a relatively short space of time (figure 23).
organizations think they are achieving and the reality. Only these
organizations don’t always realize this discrepancy, because they’re This rapid transformation, powered by technology, will in turn
operating in the dark without the data and data analytics they extend to the role of the HR and benefits professional too.
need to inform decision-making.
As we have already seen, investment in automation to free up
Pensions are a great example, partly because they are universal teams for more strategic-level work is one of the top five priorities
but also because of the billions of dollars invested in employee when it comes to tech investment. So, HR’s role will evolve into
pensions every year. one that is more strategic—something that will be facilitated by an
increased emphasis on data analytics.
Longer working lives are having a huge impact on pension
provision, healthcare costs, workforce and succession planning
as well as learning and development as employees need to be
reskilled and upskilled throughout their careers.
Data collection: getting the business
basics right
Yet, only four in 10 organizations are currently using employee
data to forecast retirement. This highlights a huge issue with data
collection, analytics and action.
To really understand this data journey, we need to look at what
organizations are doing well today and where they are still lagging
behind, when it comes to using employee data to deliver on
organizational goals.
Our research shows that respondents are quite clued up when it Figure 21 | Are you currently using or do
comes to using employee data to help report on issues within the you plan to use employee data to report
business. on anything within the business?
The top three issues where employee data is used to report in the
business are:
• Departmental cost control (73%)
• Employee performance (65%)
• Employee engagement (61%)
85%
This makes sense. After all, these are all very quantifiable areas—
and they are relatively easy to collect data on.
However, there is a significant number (15%) who are missing

the point, as they are still not reporting on ‘anything’ (see figure
21). This is a glaring oversight considering how much is spent
on employee benefits and how important employee data is in
measuring ROI and engagement.
When you drill down into the figures and look at what
organizations are using data to report on then the percentage of
Yes
organizations not collecting data on key metrics rises significantly.
For example, forecasting retirement (which as we have already

discussed has a huge impact on pension costs, succession planning
and healthcare costs from an aging workforce) is something that VS.
organizations are still largely failing to do well given only 43% of
organizations currently use employee data for this purpose.
When looking at the employee data organizations are currently

collecting (figure 23), there is still a heavy reliance on survey
results and demographic data. While these are useful insights
to collect, it is areas such as benefits take-up, program data and
building-generated data that will see a huge uplift in the next year.
Organizations are set to increase the amount and variety of people
15%
data that they gather in order to build a more holistic view of their
employees and create offerings that really meet their needs.
No
2019/20 report | 41
Figure 22 | Which of the following are you currently using employee data to report on? And which do you intend to use employee data
to report on in future?
Departmental cost control
Employee performance
Employee engagement
Talent attrition rates
Benchmarking against
peer organizations
Productivity
Levels of risk
Succession planning
Benefit take-up levels
Employee wellbeing
Employee sentiment
Forecasting retirement
Employee adoption (of platforms,

productivity tools etc.)
0 20 40 60 80
% of organizations
Currently using Intend to use by 2020 Intend to use within the next Don’t intend to use
three years
Figure 23 | Are you currently collecting employee data points in any of the following?
And which points do you intend to collect?
Currently Intend to collect Intend to collect within the Don’t intend to

collecting by 2020 next 3 years collect
Employee engagement
survey results 65% 24% 9% 2%
Demographic data
(age, marital status,
ethnicity etc.)
62% 20% 12% 6%
Employee benefits data

(benefits take-up and
scheme engagement)
56% 28% 13% 3%
Program data (participation

in training, outcomes of key
projects and assignments)
52% 23% 15% 10%
Performance data (data

captured through
assessments)
52% 29% 12% 7%
Building-generated data
(football, temperature,
brightness)
39% 25% 18% 18%
Data from wearables 33% 28% 20% 19%
2019/20 report | 43
Figure 24 | How much do you spend a year on benefits per The data blindspot: benefits take-up lags
employee? (as a percentage of salary)
behind
9% Organizations spend huge sums on benefits with more than half

(56%) spending upwards of 15% of employees’ base salary on
13% benefits.
8%
However, almost one in 10 (9%) are making decisions without
any data, admitting they do not know how much they spend per
employee (see figure 24).
17% Given the vast spend on benefits, there are glaring oversights
when it comes to collecting and analyzing benefits data to see if
that spend is actually effective.
23%
The percentage of organizations using data to report on benefit
take-up levels for example is surprisingly low.
Just under half of

30%
organizations make an effort
to report on benefit take-up
Benefits spend per year as % of salary
levels… so they do not have
0-10% 11-15% 16-20% 21-25% >25% Don’t know
the data to support decisions
or inform spending.
So even though employee engagement is a top priority for
organizations, it’s clear they are missing a trick in not linking
benefits take-up-among other factors such as employee
sentiment and wellbeing-to engagement.
Misaligned with organizational goals: areas next three years – and the picture becomes clearer. In a few years’
time, a vast amount of employee data will be at organization’s
lagging behind fingertips.
The emphasis will then switch to analyzing this data to harness

its full potential and utilizing it to predict future trends, such as
What really stands out in these figures is the mismatch between workforce planning. For this, organizations will need to use data
what is currently high on HR’s agenda (as shown in Chapter 1) and analytics and AI. Although many organizations are also lagging
the data being used to support these initiatives. behind when it comes to predictive analytics tools with only
around one in 10 using these.
For example, employee wellbeing is a hot topic—rising to number
four in the top five priorities for employee benefits teams in
2019-yet just 46% of organizations are collecting data from
employees about wellbeing and then using this data to inform
Only 12% of organizations are
decisions about benefits. using predictive analytics12
It is a similar story for employee engagement – 43% of executives
believe that low or declining employee engagement is the top
human capital risk their organization faces. Yet nearly four in 10 So, one obstacle may be the technology itself as organizations
organizations still do not have the employee data they need to continue to struggle with disparate systems that aren’t talking
deliver on this business objective. to each other, many of which have no analytics capabilities, or
capabilities that aren’t centralized to provide a single source of
Employee sentiment is only measured by 44% of organizations, truth.
and while 42% plan to collect data on this over the next three
years, it is an area lagging behind employee wellbeing and
employee engagement. Yet employee sentiment is another good
indicator of the success of engagement and wellbeing strategies. If it works why isn’t every organization
doing it?
The new data landscape: a lot can change in
three years However, the overall picture is still very encouraging – in the next
three years HR and employee benefits will be data-driven. In turn,
this should lead to better employee engagement and increased
ROI on benefits spend.
There is inevitably a lag between setting an agenda and delivering
it, which probably explains why cost control (a top priority during Yet, not every organization will benefit because there are still
years of austerity) has the highest percentage of employee data those that are not using their employee data effectively.
currently being used to report on it as shown in figure 22.
So, what is the problem?
However, take into account future-plans – those intending to use
employee data for different goals either by 2020 or within the

2019/20 report | 45
Well, if you analyze the data from respondents that don’t use Figure 25 | Among organizations that don’t use employee data to
employee data, this reveals that the biggest blockers are ‘poor report on anything, what are the biggest blockers?
quality data’ and a ‘lack of data literacy in the HR function’ (see
figure 25). A further quarter lack the technology to use employee
data effectively. All of this suggests that intuitive technology to
deliver quality data and make it easier to analyze, could provide a
valuable service for these respondents.
31% Poor quality data
31%
Interestingly, a lack of C-level buy-in is not a big issue and neither Lack of data literacy
is lack of budget, indicating that the biggest barriers to using in HR function
employee data are coming from within the HR and benefits
function – with these teams hampered by poor data, lack of
technology and disparate systems.
26% Lack of technology
21% Don’t see the benefit
15% Lack of time

on the team
15% Disparate systems
15% Concerns around the storage

and use of employee data
13% Unsure how it connects to

the organization’s wider goals
8% Lack of C-level buy-in
5% Don’t have the budget
Hand in hand: the right data leads to better employee
engagement
The incentive for organizations to invest in better systems to facilitate data

analytics, including predictive analytics, is that it gets results.
Organizations collecting and using employee data are likely to see a huge
impact on employee engagement as they start to make better, smarter
decisions—creating a benefits strategy that will make a difference to their
people.
We know this because respondents that currently use data to report on

business issues are getting better results across a range of metrics. As figure
26 shows, they are far more likely to be exceeding or meeting their employee
engagement score targets.
Those below target or who don’t know how well they are performing against
annual employee engagement scores are firmly in the minority. Collecting
and using employee data clearly works. But where are they performing best?
Employee sentiment (which only 42% of organizations currently collect and

use data on—lagging behind all other areas listed in figure 23) actually tops
the list. When organizations measure employee sentiment they outperform
or meet their annual employee engagement scores in 92% of cases. This is a
huge win and one that far too many HR teams are missing out on.
The same applies to the adoption of employee platforms, productivity tools

etc. which as we saw in figure 23, far too many organizations are not collecting
employee data on. However, when they do, the investment really pays off.
In fact, as we can see from figure 27, those who are measuring employee
adoption of technology are more likely to be satisfied with their ROI.
2019/20 report | 47
Figure 26 | Organizations that use employee data and how they perform against their annual employee engagement score targets
Employee sentiment
Employee adoption (of

platforms, productivity
tools etc.)
Succession planning
Levels of risk
Employee wellbeing
Departmental cost
control
Productivity
peer organizations
Employee engagement
0 20 40 60 80
% of organizations
Figure 27 | Organizations that use employee data and how satisfied they are with their benefits ROI
Employee adoption (of

platforms, productivity
tools etc.)
Employee sentiment
Succession planning
peer organizations
Employee wellbeing
Productivity
Levels of risk
Departmental cost control
Employee engagement
0 20 40 60 80
% of organizations
I’m satisfied we have very good ROI I’m satisfied we have good ROI I’m unsatisfied with our ROI
I’m very unsatisfied with our ROI We don’t measure this Don’t know
2019/20 report | 49
There is also a clear association between respondents that use
employee data to report on issues within the business and their Organizations that use employee
leaders’ satisfaction with benefits’ ROI.
data to report on business issues
However, it is important to note that an association such as
this does not indicate cause—so it is not possible to conclude
are more than twice as likely to be
that using data leads to better ROI, or that improved ROI
leads to better use of employee data. However, there is a
‘very satisfied’ with their ROI
strong correlation as you can see in figure 28 which looks at the on benefits spend than those
satisfaction of leadership with their benefits ROI.
that don’t.
Figure 28 | Are you currently using or do you plan to use employee data to report on anything in the business? And how satisfied are
your leadership with your benefits ROI?
6% 8%
19%
12% 8%
5% 42%
11%
35%
54%
Yes, we use No, we do not use

employee data employee data
% of organizations
Very satisfied Satisfied Unsatisfied We aren’t asked to report Don’t know
People analytics: the next piece of the data Figure 29 | Do you have people analytics capabilities within your
HR organization?
puzzle
We have already identified that investment in tools to effectively 15% Yes, a dedicated team has been
in place for more than three years
collect and report on data is a priority. Among organizations

that are not yet collecting employee data on key areas such as
employee wellbeing, nearly half will start doing so in the next few
years.
12% Yes, a dedicated team has been in
place for more than two years
However, what happens to the data when they collect it?

Organizations need the capability to analyze the data to report on
business issues.
19% Yes, a dedicated team has been in
place for more than a year
Tech problems may be a barrier to better data collection, but

there are people problems too. That said, there are some very 22% Yes, a dedicated team has been
in place for less than a year
encouraging signs for the future.
More and more organizations are investing in people analytics

teams—although this is relatively recent as most have only been 14% Yes, these capabilities exist within the HR team, but
individuals are not dedicated to people analytics
doing so in the last year. As you can see in figure 29, there has
been a massive increase in the number of organizations that have
implemented people analytics teams in the last year and a half.
4% No, we outsource this
Despite many respondents citing a lack of in-house expertise as a

barrier to using employee data to report on business issues, more
than two-thirds have a dedicated people analytics team in place—
while a further one in nine have people analytics capabilities within
3% No, but we plan to build one
within the next 12 months
the general HR function.
So why are fewer than half currently using this employee data to
measure a range of organizationally-critical issues from employee
2% No, but we plan to build one in
a year’s time or more
sentiment to benefits take-up?
This suggests that these teams are either: 3% No, another team in our
organization does analysis for HR
• Not being put to best use, or
• They do not have the training (or scope)
to get involved in data analytics.
4% No, and we have no evident
plans to build one
3% Don’t know
2019/20 report | 51
Upskilling existing talent: how tech is Figure 30 shows that HR professionals don’t need to worry
about tech taking their jobs – a common misconception about
transforming HR teams digitalization and increasing automation – as the majority of
organizations plan to upskill their people team or bring new talent
in.
Ensuring that teams, either within the organization or externally, The function has seen significant digitalization but there’s little
can really harness the power of employee data is inevitably indication that this will diminish headcount in the mid-term. In
the next step. And it’s positive to see that many organizations fact, it’s an exciting time to work in this function.
are preparing to do this, whether that be to outsource these
capabilities to third parties or upskilling existing teams. We will see an evolution of skills, as professionals working in this
sphere upskill their roles and become far more strategic. As
businesses increasingly look to HR teams to supply data-based
insights that play a real role in measuring and informing people and
business strategy, their value to the organization will also increase.
Figure 30 | Will you upskill your existing team members or hire-in
This mirrors HR’s transformation from process to strategy – and
external talent in the next 12 months?
reflects the findings in Chapter 1.
17% Yes, we will do both
32% Yes, we will upskill our existing

HR team members
17% Yes, we will hire in external talent
7% We plan to outsource
people analytics
20% No, we don’t plan

to hire or upskill
7% Don’t know
Lawrence Sutton
Director - Enterprise Consulting
Nobody has cracked it so far, but the future of

data analytics is bright.”
There is so much data out there. The untapped value in that data is
astounding, and up until now nobody in our industry has found the
key to unlock it. That’s because it’s really hard! There are so many
different types of data, in different places with different levels of
integrity and many just don’t know where to start.
But things are changing. Now that companies are embedding

technology into their operations to engage and automate, data
is rising to the surface. There is a still a level of standardization
required to truly realize the value in the data, but imagine being
able to understand the predicted cost of employment for an R&D
team in India versus Vietnam at the click of a button. I’m not
talking about looking at average salaries and benefit premiums –
I’m talking about looking at salaries, benefit premiums, historical
benefit utilization, cost of living, typical career progression for
specific job types and the financial impact, mobility costs – all
analyzed holistically to give you a data-based assessment to inform
your strategic decision. The future of data and what we do with it
in this space is really exciting!
53 | www.thomsons.com 2019/20 report | 53

Conclusion
HR driving a smarter As a result, within the next three years
there will be exponential growth in the
people strategy amount of data being collected and
analyzed by virtually every organization.
From benefit take-up levels to employee

As this research reveals, HR professionals wellbeing, HR and benefits professionals
now see themselves as innovators, using will (often for the first time) have the
technology to drive their people strategy insights and analytics they need to truly
and improve employee engagement—a transform their benefits proposition,
marked shift from how HR has historically tailoring it to the individual as a means of
been perceived. driving and rewarding performance.
But despite this new generation of With so many organizations having to
innovators, there is a big disconnect transform their ability to collect employee
between how HR think they are data, this will require a significant amount
approaching technology and how it’s of investment in technology—as well as in
being used in practice. Not only that, but expertize, with many choosing to upskill
in many cases HR tech isn’t meeting the existing staff in data analytics so that they
needs of the market and is a barrier to can fully harness the power of data.
further technology investment.
This shift in the skill set of HR and benefits
The biggest disconnect is found in how professionals will see them operating at a
data is being used today. However it’s clear more strategic level, becoming real game
from the research that this is set to change changers within organizations.
significantly over the next few years.
In turn, we will see:
Employers recognize that they need more • More innovation: Organizations
accurate data and effective analytics to want to ‘plug-and-play’ apps and
really add value to their employee benefits tools into a connected ecosystem to
proposition—and also to deliver the adapt to the changing demands and
seamless consumer-level technological needs of their employees. However,
experience that employees now expect for many say that these tools ‘are not
an exceptional experience. fit for purpose’ today. As ‘more
diverse rewards’ are a top priority for tailored to performance. However,
organizations, expect to see greater organizations need the data and
innovation in this area as HR tech analytics to deliver on this promise.
providers step up.
• More proactivity: Instead of reacting
• More investment: The stark to problems, HR and benefits teams
difference in satisfaction levels will start to predict issues before
between organizations with global HR they impact on talent strategies
systems and national/regional ones, and organizational goals. However,
and the higher satisfaction ratings for professionals in this sphere will only
best-of-breed ecosystems, indicates be able to do this once they start to
there will be significant investment in analyze and action the vast amount of
best-of-breed solutions over the next data they will have access to. This is an
few years. Organizations need to have area that needs the most work
the capability to offer the tools and —particularly as only 12% are using
apps needed to attract, retain, and predictive analytics currently. This is
engage talent, while also focusing on the next step.
employee wellbeing. So, investment
in a fully-integrated HR and benefits
ecosystem that enables connectivity Without a redesign of the technology that
with providers will be a priority for underpins the entire benefits function, the
those organizations that do not yet risk is that while new tools and apps and
have this ability. data analytics will deliver better benefits,
better employee engagement scores and a
• More individualization: Employees better return on investment, organizations
expect tech to be intuitive and will still fail to unlock the true potential
intelligent—not just consumer-grade of technology to transform the employee
and user-friendly, but also tailored experience.
to their requirements. So, expect
smarter tools that signpost employees
to the benefits that are most relevant
for them. Also, this year’s research
shows that there is a real demand for
compensation and rewards to be more
2019/20 report | 55
Methodology About Thomsons
Online Benefits
A total of 380 HR and reward professionals working in Thomsons Online Benefits is a SaaS provider of global employee
multinational organizations with global responsibilities in the UK, benefits and employee engagement software. It is a wholly owned
Europe, Middle East, Africa, North America, Latin America and subsidiary of Mercer, a global consulting leader in advancing health,
Asia Pacific, the Caribbean and Oceania took part in the online wealth and career. Mercer is a wholly owned subsidiary of Marsh &
survey for this research in 2019. McLennan Companies (NYSE: MMC). Thomsons’ award-winning
platform, Darwin™, is the global market leader for automated
Respondents completed a questionnaire on their HR and benefits employee benefits administration.
software landscape, whether the the technology on offer is meeting
their needs and what they are doing to prepare for the workforce of With over 2.8 million lives on Darwin™, it connects employees with
tomorrow. their benefits in over 100 countries and 36 languages. By using the
right combination of editions, Darwin™ provides a tailored solution
to meet a variety of employee benefit and reward needs, including
employee engagement, managing risk, controlling costs and
streamlining benefits administration. Its ability to constantly evolve
and cater for shifting workforce needs has made it the provider of
choice for eight of the world’s top ten technology companies.
Appendix
Thomsons has received 109 industry awards, including the
prestigious Brandon Hall Group gold award for Best Advance
in Rewards and Recognition Technology in 2015, and the latest
win, Most Effective Use of Benefits Technology at the Employee
Benefits Awards 2017 for our work with Bristol-Myers Squibb.
Mercer and Thomsons combine world-class consulting and broking
with innovative technology, driving transformation in the way that
1. Mercer Global Talent Trends 2019, https://www.mercer.com/our- benefits are designed, communicated and administered.
thinking/career/global-talent-hr-trends.html
2. World Health Organization, https://www.who.int/mental_health/
in_the_workplace/en/
3. The Workforce Institute, https://workforceinstitute.org/
workplaces-falling-behind-todays-on-
2019/20 report | 57
Innovation generation:
the big HR tech disconnect
2019/20 report
United Kingdom
T: +44 (0) 203 435 7800
E: [email protected]
Singapore
T: +65 6383 1700
United States
T: +1 844 567 9253
W: thomsons.com
@ThomsonsOnline
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2 | www.thomsons.

The HR strategy shift: Tech in the driving seat 6

Not yet delivering a better employee experience 26

The data disconnect 40

About Thomsons Online Benefits 56

When HR offer employees access to around 10 different tools

Drivers of change: the HR strategy shift

the data needed to measure

1. Mercer Global Talent Trends 2019, https://www.mercer.com/our-thinking/career/global-talent-hr-trends.html

The HR strategy shift:

Identify gap between current and required skills supply 52%

HR and benefits teams now have a broad range of objectives;

Whereas attracting and retaining talent was by far the most

With the demand for skilled workers forecast to outstrip supply

from defining the

Enhance employee 56%

Top human capital risks:

2. Mercer Global Talent Trends 2019, https://www.mercer.com/our-thinking/career/global-talent-hr-trends.html

HR teams’ increased focus on ‘global wellbeing programs’ mirrors

This year more respondents

Research linking improved employee wellbeing with improved

Secondly, ‘automating administration processes’ is now the

3. Mercer Global Talent Trends 2019, https://www.mercer.com/our-thinking/career/global-talent-hr-trends.html

So what is empowering HR professionals

Stephen Migliaccio Although improving the employee

5, 6. Mercer Global Talent Trends 2019, https://www.mercer.com/our-thinking/career/global-talent-hr-trends.html

We found that organizations are incredibly

An innovator (the first An early adopter (willling Part of early majority

Part of late majority Conservative (risk averse,

Talent and acquisition

Figure 8 | What best describes your current HR technology

48% of respondents are now

A best-of-breed A single HCM Decentralized - solutions

Figure 9 | Of organizations using a best-of-breed ecosystem approach:

Once again, decentralized solutions perform poorly—partly due

More than half (56%) of 40

respondents spend upwards

A single A best-of-breed Decentralized -

I’m satisfied we I’m satisfied we I’m unsatisfied I’m very unsatisfied

Purchasing technology on a global, rather than a local level,

Figure 11 analyzes the satisfaction of respondents with their HR

Some of the more noticeable differences in satisfaction levels,

As we have already seen, global systems can still provide flexibility

68% Tools not fit

The overall findings of our research are incredibly positive—

HR teams are also positive about technology adoption, with many

As we explore in Chapters 2 and 3, while HR professionals are

Neither are they fully harnessing the power of data analytics.

A future where benefits can be adapted or introduced in response

the business and the individual can be easily measurable, even in

Where next? More investment needed to

The fact that nearly 7 in 10 also report that the tools

Not yet delivering a better

It’s therefore no surprise that the overwhelming majority of

So, there is clearly no other option; to meet employees’

Still on the journey: benefits last to benefit

When HR departments began their digital journey some years

7. Mercer Global Talent Trends 2019,

state-of-the-art digital tools

Yet, only 1 in 3 HR leaders 2

So, what’s the next step? 4

This is mirrored in the research, which shows that HR 5

Source: Mercer Global Talent Trends 2019