Employees love the idea of receiving benefits tailored just for them.
Of course they do. Who wouldn’t want a plan that fits their family’s needs and health background, offering the perfect mix of cost management and risk mitigation?
Whether it’s Netflix or Paramount suggesting someone’s next favorite show to tailored shopping on Amazon, most employees not only want personalisation, but they’ve come to expect that businesses will cater to our individual needs, no matter how big or impossible that task may seem.
And yet there’s one big problem with this that continues to be awkward for CHROs.
This is the fact that while most employees will typically say they want a personalized benefit approach, they then baulk at what’s needed to actually deliver it – sharing personal data with their employers.
Nowhere can this be more ably demonstrated then by research research from LIMRA.
Its findings highlight these conflicting wants very clearly. It shows that nearly 90% of workers want benefits that feel personalized to their specific needs (like a healthcare plan that actually fits their lifestyle), but less than a third say they are comfortable with employers using their personal data to make those recommendations.
Go figure!
This contradiction between wants, and willingness to share data presents a real challenge for HR and benefits leaders.
How can they give personalized recommendations when employees are hesitant to give up the information that makes that personalization possible?
How can employers thread the needle between creating a better experience, while respecting those sensible boundaries?
It should be the case that a young professional just entering the workforce should be able to get proactive advice about how to start saving for retirement.
It should also be the case that an employee with a growing family should be able to a better understanding of healthcare options and parental leave.
Tailoring benefits to meet these diverse needs makes navigating benefit choices easier, faster, and less overwhelming. It also makes benefits easier to understand.
But it seems employees’ hesitancy to share personal data, despite wanting the convenience of a tailored benefits experience, stems largely from concerns about privacy and the fear of how their data might be handled.
With a constant flow of high-profile data breaches and privacy scandals, employees are understandably cautious.
According to research from the Pew Research Center, 77% of Americans have little to no trust that companies will take responsibility if they misuse or compromise data.
Unsurprisingly, perhaps, employees rightfully wonder who has access to their information, and whether it can be misused?
There are also fears that health data collected to improve someone’s benefits could someday be used to deny them coverage or raise premiums?
So, how can HR and benefits departments bridge this gap?
One critical element is transparency.
Employees need to know exactly what data is being collected, why it’s being used, and how it will be protected.
That same Pew study mentioned earlier shows 70% of consumers believe companies should take clear responsibility for how personal data is handled.
But it’s not enough to simply offer reassurances.
Employees want to see real, tangible measures in place that show their privacy is being prioritized.
They want to see that their employer is doing regular updates around security or privacy practices; or that they are conducting data audits, or that employees are involved in decisions about how their data.
If they actually saw all this, it can go a long way toward building trust.
Leaders also need to realize that once trust is lost, it can be hard to win back.
Any data breach or misuse — even if it seems minor — can lead to long-term damage to employee confidence.
Finding the right balance between customization and privacy protection is key to delivering personalized benefits without compromising on either.
Fortunately, new technologies can help employers walk this tightrope.
AI allows companies to offer tailored benefits by analyzing trends and needs through generalized data, sidestepping overly personal details.
Using anonymized or aggregated data, AI can predict what benefits are relevant at different life stages.
In addition to using AI responsibly, companies can employ data minimization strategies, collecting only the data necessary to offer meaningful suggestions.
This limits potential exposure while still giving employees the customized benefits options they seek.
Furthermore, by offering employees more control over their data, such as allowing them to opt into higher levels of personalization, HR departments can ensure they’re respecting individual privacy preferences.
Employees’ desire for benefits personalization is real, and so are their concerns about privacy.
The challenge lies in delivering the personalized experience that employees want while addressing and mitigating the privacy concerns associated with that personalization.
By being transparent, prioritizing data protection, and leveraging AI to offer privacy-conscious personalization, employers can meet both needs.
In the end, it’s all about balance — earning employees’ trust while delivering the tailored benefits experience they’ve come to expect.
But get that right and you’ll not only create a better benefits package — you’ll earn your employees’ confidence.
