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The Southwest Approach to HR and Benefits Technology

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The Southwest Approach to HR and Benefits Technology

Recently I flew from Boston to Ft. Lauderdale on a Boeing 737 with engines made by General Electric. I had a window seat, Wi-Fi, and I got a Diet Coke on the plane. I reached my destination comfortably and on-time. A few weeks prior to that I flew on a Boeing 737 with GE Engines from Boston to Chicago. I had a window seat, Wi-Fi, and a Diet Coke. I was much less comfortable and my flight was 45 minutes late. Boeing was terrible on my Chicago trip.

What is wrong with my last statement? The experience I had on my first flight was from Southwest Airlines and the second was Delta. The technology these airlines used was, for the most part, exactly the same. The experience however, was much different. Boeing was not responsible for my expected outcome. Southwest and Delta were.

Southwest entered a business with non-proprietary technology and managed to shake-up the industry and become one of the most profitable airlines year-in and year out. They looked at every part of the airline business process and changed things that got in the way of achieving their main objective. This lowered costs, made flying more affordable, and improved outcomes while enabling them to be profitable. They didn’t really invent anything. They simply applied new processes to a business that was ripe for a change.

The same opportunities exist in many industries where the technology is simply the tool. Company A creates a product and other companies either use it for their business as Southwest does or they resell, implement, and service some technology. The differentiator in the end isn’t the technology, but the services around the technology.

In the HR and Benefits business many service providers including benefits brokers seem to be missing this concept. They think they have to bring employers the best “aircraft” versus understanding the service model needed to provide better outcomes. The result of focusing on the technology is a lack of understanding of the services.

Another misperception when it comes to technology is the cost. In many industries, the cost of the technology is small compared to the cost of making it run the right way and supporting it. When I fly from Boston to Chicago the majority of the costs are for things other than the aircraft. I saw a statistic that said the cost of the aircraft itself on a per person basis was around $30 per flight.

When it comes to HR and Benefits technology these same rules apply. The cost of the technology often pales in comparison to the cost of implementing, supporting, and operating the system. Yet many are still focused on the cost of the technology. I regularly replace low-cost benefits enrollment systems that actually drive costs up because of all the necessary workarounds because the technology lacked functionality. If I need to fly from Boston to Chicago a single engine plane would not be the optimum technology.

So, when it comes to Benefits technology you must ask yourself, are you Boeing or are you Southwest? Or are you neither? Are companies like ADP, Paychex, bswift, or Namely, more like Southwest or are they Boeing? Or are they both? Maybe trying to be both is the problem.

The HR and Benefits technology business, and maybe the benefits business as a whole could use a little Southwest. While your competitors are looking for that better jet the opportunity to help the employer in their journey is much greater. You can even drive down costs more by understanding the process than beating up some technology vendor. The result can be lower costs and better outcomes. Who doesn’t want that?

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