Personalized benefits packages, courtesy of AI?

The days of generic, “off the shelf” experiences are numbered. Today’s consumers are accustomed to premium experiences tuned precisely to their needs and preferences, from streaming services that curate playlists based on their musical tastes, to e-commerce platforms that suggest products tailored to their purchasing history. Why should they expect any less of their benefits packages? 

The answer is: they shouldn’t. Many benefits professionals and HR leaders agree that personalized benefits packages are the future of employee benefits. And thanks to dramatic advances in AI technology, it’s now possible to offer exclusive, custom-fit benefits packages that are as unique as a person’s DNA, without a significant increase in administrative overhead.

Many HR professionals are already using AI to transform processes and boost efficiency, using existing data to influence everything from hiring to staffing decisions. The same can be true for benefits administration: AI can revolutionize how benefits specialists design their programs, benefits coordinators administer packages, and employees make their enrollment selections.

Consider how an employee’s needs and lifestyle evolve over time. An early-career hire may be interested in professional development coaching and assistance setting up their 401(k). In addition to life-event health benefits enrollment changes, a newlywed may appreciate additional vacation days to go on a honeymoon or set up a new home, while a new parent may need flexible working hours and childcare assistance. And a later-career professional might prioritize health benefits, higher 401(k) matching, or financial planning sessions.

By analyzing data points like age, marital status, health care or other benefit utilization, financial status, work performance, productivity relative to their peers, manager reviews, and even hobbies, AI can act as a skilled professional assistant to a benefits staff, thoughtfully curating packages as unique as the individuals who need them, at every stage of their working life. Imagine being able to ask a chatbot to suggest relevant plans, programs, resources, and perquisites for a specific employee, and getting back a fully-developed package in a matter of seconds. Employees would simply need to sign off on the package and deliver it to the employee for enrollment, freeing up countless hours for other high-value work.

But efficiency isn’t the only advantage. AI can dramatically improve the employee experience, too. SHRM has reported that many employees rush through their enrollment and often don’t fully understand the benefits available to them. Personalized, AI-curated packages that take the guesswork out of enrollment are one way to solve that problem. Another potential solution is AI-powered virtual benefits assistants that make recommendations and help employees navigate their enrollment, ensuring that they make informed choices with minimal friction. Together, these solutions communicate to busy employees that employers don’t just value their health and well-being; they also value their time.

All things considered, when the cost dynamics are equal, it’s clear that AI-assisted personalized benefits packages are far superior to “off the shelf” ones – for both an employer’s staff and employees. So how can leaders and advisors make them a reality?

Since generative AI is still in its infancy, most organizations will need to build a custom solution powered by one of the major AI players (Microsoft/OpenAI, Google, or AWS) in order to tap into the power of this technology for personalized benefits. Based on our experience implementing generative AI, such a solution would need to:

1. Incorporate HR policy documentation to ensure that benefits selections align with established policies.
2. Have access to data describing all available benefits, and the circumstances under which each benefit is most applicable.
3. Maintain an inventory of benefits mapped to employees to ensure fairness and avoid bias.
4. Have security guardrails in place to protect sensitive employee data and adhere to HIPAA regulations.

So is this emerging technology worth it, or is it just a fad? The reality is that AI is here to stay, and as it gains traction in all areas of modern life, benefits advisors, HR professionals and employees alike will demand the kind of ultra-personalized experiences the technology delivers. Organizations that embrace personalized benefits create an unmatched advantage in recruitment, retention, and employee satisfaction; AI is the technology that clears the path to deliver those benefits in a scalable way. It pays to get ahead of the curve.

Sinclair Schuller is a co-founder and managing partner at Nuvalence, a next-generation consulting firm specializing in innovative AI platforms and products.