Why you should ditch your HCM vendor for a best-of-breed HR benefits tech provider

Why you should ditch your HCM vendor for a best-of-breed HR benefits tech provider

You may have heard the pros and cons of automating all HR processes through a single end-to-end platform, versus using individual vendors to deliver one functionality, like HR benefits management or payroll. This long-running debate between single-vendor enterprise systems (HCM or ERP systems) and best-of-breed providers continues – but in terms of global employee benefits there shouldn’t be a debate.

Here’s why. When reviewed function-by-function, global benefits management and delivery is the most obvious process in the HR services mix that improves most when supported by a dedicated, agile organization.

Here are the top 3 reasons why upgrading your global benefits technology to a best-of-breed solution is a must.

1. Give your organization real ‘differentiation power’ when sourcing talent globally

A measure of organisational maturity is the point when a business globalises its talent pools. When this happens, we have observed a downward pressure on total compensation as the internal labour market reacts to a new supply of talent. When this happens, reward professionals are required to find reward differentiators in order to attract and retain employees locally.

Flexible benefit options provide a compelling answer but administration of these is cost-prohibitive without enabling technology. We see countless examples of ‘scheme stagnation’ caused by a lack of HRIS flexibility. Local teams want to be nimble, and keep plans relevant, but they struggle because cost of change is too high.

2. Solve the highly complex and local challenges of global benefits eligibility, rules and administration

Benefits eligibility is complex for any enterprise, even in a single country. When eligibility rules are extended globally, the result can be tens of thousands of rules with any number of variables including: age, gender, pay-grade, type of work, hours worked, number of dependents, hire date, distance of commute, and more. You get the picture. It’s a lot to track!

Irish medical coverage provides a useful illustration: Different rates apply to different dependents, with a discount for each additional child dependent added to the plan at the discretion of the insurer. Your medical benefit depends on how many children you have.

We often see that local HR teams are trying to pass the discount to employees but can’t get the HRIS system to help them do this, relying instead on spreadsheets or other manual workarounds. These workarounds become the ‘tribal knowledge’ of the benefits team, but create a constant risk of errors and omissions, which can be costly and hard to detect - until it is too late.

3. Don’t let global benefits technology become an afterthought or last minute add-on to an HCM integrated solution

Typical HRIS systems implementation and administration focuses on everyday processes, like payroll. Efficiency through automation grabs the most attention, because the ROI is more frequently calculated. But peer-reviewed research has argued that as much as 90% of all ERP projects are ‘severely delayed’.[1] That means your IT department may take months or years to work out all the kinks before they get around to global benefits. And that can have huge ramifications, because getting benefits right can make an enormous difference to engagement and productivity. Not to mention saving real money on top line administration expenses.

While benefits may not always be as ‘top of mind’ as compensation, benefits are the most personal aspect of the relationship that most employees have with their employer.  

[1] Risk assessment in ERP Projects Davide Aloini et al, Information Systems, May 2011

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