A recent Towers Watson survey indicates that 54 percent of employers focus on employee demographics to evaluate voluntary benefit offerings. But according to an article by Melissa Winn in the November issue of Employee Benefit News, using data analytics and analysis to more specifically target employee groups and individuals could lead to more personalized benefit options, boosted employee engagement and, consequently, better success in creating an appropriate voluntary package.
The article points out that the use of advanced data analytics takes us from a descriptive approach to a prescriptive approach. And, using an advanced analytical approach through employer profile analysis, employee segmentation and predictive modeling can yield higher business value and a better employee experience.
The fault in simply using singular data, such as age group, is that two people the same age may have very different buying preferences. Instead, employers should move to a more individual level, which would include analyzing neighborhood-level data such as zip code and credit behavior and household-level data such as income, net worth, number of children, etc.
On an individual level, employers and advisers can evaluate employees based on all of this information, not just one dimension of data in a vacuum. By combining all the data and variables together, employers and advisers can segment out the employee population and create custom messaging that better engages employees, and also offer products that better fit the needs of the employees. For example, certain segments of an employee population can be identified as taking more risks, while others may be risk-averse. Likewise, some segments of the population may prefer expert advice, while others recoil from it.
Being able to highlight products based on employee need, targeting messages to employees based on what is important to them, and using the right media and enrollment process to engage and enroll each employee, makes the use of data analytics a game changer in voluntary benefit sales.