Open Enrollment Software: Building a Benefits Business Case
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By Dave Foxall
The Business Case for Open Enrollment Software
The world of benefits administration software is transforming. Fueled by the influx of social media, self-service applications, and a changing workforce demographic, an increasing number of organizations are looking to morph outmoded administrative processes such as benefits into strategic gains for both efficiency and engagement. In fact, in recent years, as open enrollment has become “e-enrollment” (and an increasing amount of benefits software functionality becomes not only available but also mainstream), a corresponding evolution has also been happening in terms of organizational expectations for the entire benefits enrollment process. Of these expectations, three key trends are apparent:
The manual administrative burden on HR has been (and continues to be) reduced.
Decision-making is shifting to the employee.
The workforce is demanding easier and more rapid access to information and choices.
In fact, as Guardian Life Insurance's Elena Wu notes, “We [are moving] away from the idea that enrollment is just an administrative process to sign people up for their benefits plans”. Indeed, rather than simply being a once-a-year event, open enrollment (oftentimes driven by the software itself) has become a strand of the corporate employee engagement strategy. Employee self-service (ESS) portals, decision support tools, carrier data feeds, and more are just some of the key features of the current brand of open enrollment; and they all encourage employee involvement, responsibility, and empowerment.
Open Enrollment Software Issue #1: Majority Adoption and Deployment
For many organizations, adoption of an open enrollment software solution is largely driven out of the necessity to either replace or improve an existing system. In fact, as a 2011 Towers Watson flash survey showed, 81+% of employers have already made the shift away from paper-based open enrollment (an increase of five points on the previous year). Interestingly enough though, while adoption rates of this benefits technology is soaring, the same cannot be said about each deployment model for open enrollment software. According to Towers Watson's Rich Nicholas, "these employers [who] do not outsource but do use technology…no longer buy and install it on their premises". Indeed, increasingly, organizations are turning to the cloud and the software-as-a-service (SaaS) model to give employees the benefits of automation without the expense and slower times to value of on-premises installations.
Open Enrollment Software Issue #2: Cost & Efficiency Savings
As with other business applications, economies of scale would indicate that the largest savings to be gained from open enrollment software will inevitably go to those organizations with sizeable employee populations and the capacity to leverage large-scale enterprise-level investments. However, as HR Magazine reports, “On top of eliminating paper, online [open] enrollment systems can improve communication, eliminate errors and save money. Even small companies can realize efficiencies from online open enrollment, and newer delivery models make it affordable and accessible to just about every organization.” Although exact savings naturally depend on industry, company size, and specific situations, it has been estimated that companies can cut dedicated HR staff time in half and drop error rates from over 5% to less than 1%. Further, some figures quote savings close to $500K versus similar paper-based processes; in large part due to increased accuracy, improved tactical efficiency, and capability for real-time reporting and auditing.
Open Enrollment Software Issue #3: Multi-Channel Interaction
First generation platforms for open enrollment software only took care of the most basic transactions and workflows. Initially, these open enrollment systems sought to answer a rather simple problem: How do you get a large number of employees efficiently and accurately enrolled each year in "core" employer-sponsored benefit plans? However, current offerings allow for a more sophisticated and varied approach; with an emphasis on clearly communicating with employees to allow better-informed election decisions. For example, interactive features such as blogs, videos, and podcasts are all now part of a multi-channel approach designed to take into account individual preferences. Further, these newer systems aim to provide a degree of personal flexibility—allowing employees at their leisure to engage in their enrollment session 24/7. While certainly novel, what’s interesting is that this open enrollment software functionality appears to be finding an incredibly broad audience. In fact, a 2010 Towers Watson study found that 84% of respondents were using email as the main communication venues for benefits news compared with 60% face-to-face. As well, web-based "chatting", podcasts, and videos were also on the rise; making up a combined 33% usage according to survey participants.
Open Enrollment Software Issue #4: Social Media & Mobile
Building on the enrollment communications options in line with current business software trends, the adoption and usage of social media tools and access via mobile devices for open enrollment is also on the rise. Using forums, flash surveys, micro-blogging, and leveraging external channels such as Facebook and Twitter, innovative companies are utilizing the power of social and mobile to increase employee involvement in the open enrollment benefits process. Some companies have even expanded into applying ranking features which allow employees to effectively “grade” their benefit providers. These forward-looking changes reflect how companies are responding to the results from the 2011 Annual Benefits Enrollment Survey in which fully 69% of employers were dissatisfied with their current enrollment technology. Although still only at 4% adoption according to the above Towers Watson survey, analysts are predicting up to 107% increase in social media adoption during 2012.
Final Thoughts on Open Enrollment Technology
Looking ahead to the challenges predicted for the forthcoming open enrollment cycle (e.g. increased communication, more self-service options, better quality decision support tools, integration of wellness information, etc.); it would seem that open enrollment software is finally positioned to no longer be lagging behind other HR technology offerings. Rather, now benefits technology is coming into its own right—effectively responding to the ongoing employee demands for easy access, information clarity, a variety of communication channels, and social media integration.
First generation platforms for open enrollment software only took care of the most basic transactions and workflows. Initially, these open enrollment systems sought to answer a rather simple problem: How do you get a large number of employees efficiently and accurately enrolled each year in "core" employer-sponsored benefit plans?”