The cost of all-in-one HR platforms is hindering employers from engaging with technology that helps with vital HR functions, including benefits education and communication, according to a new study from LIMRA.
The report, which surveyed 1,403 private employers who have been in business for at least three years, found that the size and location of the company, the type of industry, the age of the workforce and how long the company has been in business has influenced the use of technology by HR professionals.
HR professionals overwhelmingly use technology to manage payroll (70%), yet utilization rates drop to an average of 24.5% for other key functions, such as employee performance management and retirement benefit enrollment, according to LIMRA’s “Convenient and Connected: How are Employers Using Technology Today?” report.
Though nearly half of employers use technology for benefits enrollment, just 22% use technology for benefits education and communication. More than one in 10 (36%) use technology for employee benefit administration.
Although companies with more than 1,000 employees fared better with technology use than small (less than 100 employees) and medium (less than 1,000 employees) sized employers, cost was a major hindrance for 34% of large employers, according to the report.
Similarly, 24% of small employers and 22% of mid-sized employers reported cost as a reason for not using technology.
“Those systems that wrap everything up in one are expensive,” says Kimberly Landry, assistant research director of workplace benefits research at LIMRA. “The main thing holding people back is the price tag associated with that.”
LIMRA found that satisfaction was high — scoring higher than 75% — for almost every type of HR technology LIMRA listed. Still, only 64% of employers use benefits technology that handles all functions on one platform, according to the report. Another 27% of employers split enrollment between multiple technology platforms.
The report indicated there may be increased use of benefits technology in the near future.
Nearly one in 10 employers are actively looking to add enrollment technology while nearly a quarter of employers are interested in switching to a new benefits platform, according to LIMRA.
Employers said they are most likely to switch to obtain a better price or improved data security, according to the report. Only 17% of employers would switch to a platform that handles all benefits on one system solely for that reason.
The report found that employers are willing to spend up to $2.30 per employee per month for a fully immersive system, versus $1.80 for enrollment technology and $1.89 for enrollment and administrative technology.
While those price ranges are lower than the cost of such technologies, Landry says companies that want an upgrade to their current system or are actively looking for benefits technology will pay a bit more.