As the New Year is in full swing, many human resource professionals across the country are asking themselves, ‘how do I avoid another year like the last?’ Increasingly, the answer to solving many issues has been technology.

In the past five years, the supply of fast moving, all-encompassing HR solutions has expanded dramatically. Employee benefits seem to be the newest arena where tech disruptors want to make their mark. The question is, how does the HR professional, with several other responsibilities on their to-do list, keep track of them all? To avoid the hype of HR nirvana, the following are six key questions to ask to help keep that resolution and make sound business decisions:

1. Have you documented your benefits strategy, both short and long term?

Like any goal or resolution, it is critical to write it down. If not, it is almost certain to fail. Employers should document what they are trying to do with their employee benefits program. Matching the culture of the firm to the benefits strategy and the methods used to execute that strategy is essential to understanding where technology can assist the HR department. Objectives vary widely by employer, and may include:

· Offering a comprehensive benefits package to attract top-level employees

· Providing base benefits at lowest possible net cost to a lower paid group of employees

· Offering significant flexibility to a millennial group

· Providing high-touch employee service for employees not accustomed to making decisions

· Meeting the letter of the law to avoid penalties

These are just some objectives employers may have and they are likely to change over time. No one technology solution is right for every situation. Documenting your needs and goals is the first step in determining the right solution.

2. Have you defined the must-have versus nice-to-have tools of a benefits administration system?

When individuals make any major purchase, they face the same question: do I want to pay more for the extra ‘thing’ that looks so great? The Affordable Care Act changed the landscape for what is important in a benefits administration system. Compliance is now the biggest driver in technology adoption. Technology companies are fantastic at offering slick demos of nice-to-have tools, so you need to know your list of must-haves ahead of time and get them answered before allowing yourself to be wowed by the latest app or avatar.

3. Have you determined whether payroll is part of the discussion?

This may be the most important part of any benefits administration or private exchange discussion. Are you willing to change payroll providers? If not, that’s okay, but you need to determine whether or not the system will integrate with your payroll system. Don’t ask the technology vendors, as their answer is always the same, ‘yes, we can integrate with anyone.’ You must ask your payroll firm if they can fully integrate, as a one-way integration is not a marriage made in heaven.

4. Technology. How much is too much? Have you assessed the amount of which your employees are comfortable?

This answer will not be the same for everyone in your firm, so what do you do with those who can’t adapt? Do you have group meetings, one-on-one enrollments, or call center support? The technology firm can’t always answer this question, so instead ask them how they can support the HR department’s efforts to marry multiple methods of communication. What can your consultant do to help?

5. Do you understand the vendor’s business model?

A new technology firm seems to spring up every week or so. New platforms from existing firms show up monthly. Understanding the business model and developing your own assessment of the viability of that model is critical due diligence for HR decision-makers. Pure technology players may be selling software to brokers or carriers, and earning per member per month fees behind the scenes for billing offsets. Venture capital-backed firms may be running at 0% profit with the hope of a high profile sale or merger based on top line revenue. Brokers may have created proprietary products or reseller agreements that restrict your options. Changing to a new technology can be disruptive, but often in a positive way. Changing multiple times over the course of two to three years is destructive. Knowing your vendor, their model, their path to success and viability is essential to informed decision making.

6. Do you have an independent viewpoint?

In any buying decision, it is important to know the objectives of the people at the table. Consultants and standalone technology vendors generally fall into one of two models: either they have created or repackaged a ‘proprietary’ platform that they know very well and will work to fit to a client’s needs; or they don’t offer a specific solution and work with a client to find a solution that most closely aligns with the needs of the client.

Case in point: A company with 300 employees was debating between hiring another HR benefits specialist or installing a new benefits administration system. The CFO was advocating for a technological solution as the company had experienced increased efficiency in its distribution department after investing in a new system.

Working together, the HR staff and CFO identified their must-have features for a new benefits administration system. They determined 80% of their employees were tech savvy and the remaining 20% were more ‘old school’ but would seek out their HR staff for help. The company did not want to change payroll vendors, so the new system needed to fully integrate with its current payroll vendor. They reviewed a few options that met their requirements, debating the merits of each vendor.

The firm eventually chose a well-known but moderately-priced benefits administration system that had a reputation for innovative technology and smooth implementation. The HR staff reported greater efficiency in their day-to-day tasks and increased employee satisfaction during open enrollment. Despite the additional cost of the benefits administration system, the CFO recognized $40,000 in net savings since an HR benefits specialist was not hired. Bottom line: If the decision makers hadn’t clearly identified their objectives from the beginning, they could have selected the wrong benefits administration system.

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Arthur Hall

Arthur Hall

Arthur Hall is senior vice president and employee benefits leader for USI Insurance Services.