Although HR professionals across growth markets now have access to an unprecedented amount of organizational data, many still find themselves struggling to present data-driven business cases to management. You may not have the right data for your needs, or you may lack the expertise to make sense of the data available. But this is a growing problem in an ear when management expects all business proposals and budget requests to be backed by hard data.
A fundamental shift is required: HR must move away from relying on “gut instinct” and anecdotal evidence to turn toward strategies supported by robust data. Used correctly, there is a range of data-driven practices that can drive sustainability, innovation and credibility in your benefits management—especially at a time of rising medical costs.
HEALTHCARE COSTS ARE RISING ACROSS GROWTH MARKETS
Medical treatment costs are increasing across Asia-Pacific by an average of 10%–15% year-on-year, putting more pressure on HR to innovate. Yet many HR professionals are stuck in traditional methods of cost management. When an insurer imposes an increase in premiums for an employee benefits scheme, HR’s first step is usually to shop around at renewal. However, this strategy has only a limited impact, typically achieving a premium reduction of roughly 6%–8%. These savings are not sustainable after the first year, especially when we predict that premium increases will almost double in just five years’ time.
HR can begin by integrating hard data into negotiations with management about budget increases. This information, when used correctly, can help change opinions about benefits and their effectiveness. Start by looking at your current benefits expenditure and drill down to see exactly what is driving up costs. You can also help predict future increases in benefits spending by looking at the changing demographics of your workforce. Can you afford these increases? These data will ultimately help you identify the most cost-effective solutions to put in place now.