Organizations are replete with rewards data. They know how much their health insurance program costs, how much employees get in bonuses, and to what extent employees take advantage of non-monetary rewards like upskilling and development opportunities.
The problem is that most of this information is siloed in separate spreadsheets or in each rewards provider’s private dashboard. That makes it hard to generate the kind of insights HR teams need to tailor rewards to a changing workforce, boost employee engagement, and optimize for ROI.
HR teams recognize the importance of using data and insights. Research published in 2019 by Capita Employee Solutions found that 91 percent of benefits professionals think data is important to improving benefits and 84 percent say better insights will give their company a competitive edge in terms of benefits and rewards.
So, how can HR teams and reward leaders bridge the gap and turn rewards data into insights? By getting granular, using real-time dashboards, and personalizing rewards.
Lots of Data and No Insights: The Problem of Data Silos
HR teams don’t have great visibility into their rewards data and data silos are the main culprit.
A data silo is any isolated information source, explains Garrett Sussman, demand generation manager at marketing agency iPullRank. It lacks context, exists separately, and is hard to interpret. That means you never get the whole picture. Instead, “you end up seeing only the analytics produced by each individual application.”
Silos significantly devalue data, says Swetha Amaresan, senior marketing coordinator at Nickelodeon International. “Data is one of the most valuable assets of your business. Having several tools collecting information about your prospects, customers and partners increases your company’s value,” she writes. “But when that data is outdated, incomplete or missing, the value that you could get from it goes down significantly.”
Poor data quality is a big problem when it comes to rewards. That’s because total rewards impact several other HR initiatives like recruitment, retention programs and DEI, says Jill Krumholz, co-owner and managing partner at RealHR Solutions.
“While wages are always the starting point for compensation discussions, today, applicants and employees require broad rewards packages that recognize their financial needs, personal interests, and address important societal issues,” she explains.
“This expectation places a value on indirect compensation as never before seen, and it is through an inventive application of indirect compensation that a company’s culture and values can shine through – not only to employees but the greater marketplace.”
Without insights, HR teams can’t optimize rewards strategies in a way that also improves all of these other initiatives. Nor can they optimize rewards programs themselves to make them more cost-effective or effective with respect to attracting and retaining talent.
Understand What You Can Do With the Data You Have
Before HR teams tackle the problem of data silos, they should first make sure they are clear on the data they do have at their disposal and what can be done with it. Being clear on your rewards data makes it easier to optimize total reward programs going forward, and ensure they continue to meet business goals.
“Organizations are most successful when they review the total rewards philosophy whenever there is a significant shift in enterprise strategy to ensure that rewards enable the strategy,” McKinsey’s Sabrin Chowdhury, Neel Gandhi and Alex Katen-Narvell write. “In the absence of strategic changes, review on a regular cadence to ensure the ability to attract, motivate, and retain top talent.”
Being clear on the data you have can help you understand how your rewards data impacts other HR initiatives, says EY’s Juliette Meunier. “Analyzing data that most organizations already possess can reveal how rewards programs affect job-offer acceptances, turnover, engagement levels and productivity. You can test assumptions and identify areas for targeted changes, and then track how these changes affect outcomes.”
When you’re analyzing the rewards data you have, you can also gather more information. “To help determine an optimal solution, leaders should stop guessing what their employees value and make fact-based decisions by surveying their workforce,” write Aon’s Vamsi Srinivas, Jane Kwon, Arun Taneja, and Martin McGuigan.
You may have a hard time convincing executives that now is the right time to evaluate your rewards program, but it will be well worth your time to do so now. “A well-structured rewards optimization review will demonstrate how to save the most money without negatively impacting a large portion of the workforce and can ultimately result in meaningful cost savings,” Srinivas, et al. write.
Bring Data Silos Together With Real-Time Dashboards
A real-time dashboard removes silos and gives teams a single source of truth. And that leads to much better insights, says Walter Scott, board member at software development company Ambassador Labs.
“A CEO can tell if a customer is thinking about canceling by looking at data as wide-ranging as how many support tickets are filed at once, how many doc pages are viewed and if they unsubscribed from the company’s email,” he explains. “While these are separate data sources, when viewed together, they point to one likely outcome. Until data is collected and analyzed across the enterprise, it’s not useful.”
The same principle is true for HR teams. You might not be able to tell to what extent a particular employee is engaging with your company when data sources are separate, but you can when you bring them all together.
Dashboards also help companies organize employee data in meaningful ways that allow HR teams to make data-backed decisions, says writer Madeline Clarke at TechnologyAdvice.
“To help spot…trends, an HR dashboard solution collects the most relevant information — the reports and KPIs (key performance indicators) you actually care about — and organizes it on one screen. Charts, graphs, and meters visualize this information.” Being able to see things visually, rather than, in say, spreadsheets, allows HR teams to see things at a glance while also being able to drill down into the data if they wish.
Finally, using dashboards with real-time data feeds will help your team understand how the cost and impact of rewards changes over time, as well as the immediate impact of any changes you make to rewards schemes. Your team doesn’t have to waste time collecting survey results or comparing different data sources: The insights are spelled out for them in the dashboard.
Personalize Rewards to Obtain Employee Preference Insights
One of the biggest problems with rewards programs is a lack of understanding and personalization, Dimple Agarwal, Josh Bersin, Gaurav Lahiri, Jeffrey Schwartz and Erica Volini at Deloitte say.
“Rewards programs remain primarily focused on traditional (on-campus, on-balance-sheet) workers and traditional types of benefits, such as health insurance, sick leave, and overtime pay,” they write. “Many exclude elements, such as flexibility, development, recognition, and other incentives, particularly for contract or other off-balance-sheet workers.”
And while some companies are moving towards truly personalized rewards, most struggle to do so. This needs to change — not just because personalized rewards can increase employee engagement, but because it also allows HR teams to generate better insights.
By interacting with benefits and choosing one reward over another, employees generate behavioral data and insights that HR teams can leverage, says Jeff Fox, principal at Aon. “This can range from simplistic take-up data to richer engagement insights, such as repeat selections or even advocacy. The holy grail is to capture employees saying great things about benefits, telling others about it and striving harder in their roles as a result of the benefits [their employer] offers.”
A lack of data shouldn’t be the reason that holds your team back from optimizing your total reward program. Every HR team has reams of benefits data. But neither should a lack of insight.
Start by getting clear on the data your team has, then use dashboards to eliminate data silos and generate insights on demand. Finally, turn to personalization to generate the kind of behavioral insights you can use to reduce cost, improve impact, and make your rewards program a key driver to achieving business goals.