Do you know your SSO from your SSL? Or a licence fee from an implementation charge? If employee benefits technology has you in a spin, our jargon buster will help.
While employee benefits technology can transform your employee experience and save you hours of administration time, you need to know the language. Here’s our round-up of some of the most commonly used employee benefits terms, and what they mean.
Employee benefits scheme
This catch-all phrase generally refers to every aspect of your employee benefits programme – the scheme design, the benefits themselves, the underlying technology, the back-office administration, benefit broking, liaison with providers, management information – the complete package.
Employee benefits platform
The platform is the technology that underpins the employee benefit scheme. This is a portal that allows employees to learn about the available benefits and manage their benefit selections, while giving HR teams to access management information.
At PES, our platform consists of proprietary technology. Our own in-house development team refines and develops the platform to ensure that clients and their employees enjoy a seamless user experience.
This is a term many consider a little out of date now. Its origins 20 years ago suggested complete flexibility, so that employees could change funding levels for various benefits, lowering some to pay for others.
Today it’s much more about choice around a set of benefits which is usually managed via a platform. Benefit selections can be made online while the underlying technology automates all associated administration and keeps employee data secure. The platform can also be used to explain benefits better and increase employee understanding.
Core and voluntary benefits
Core benefits are provided and paid for by the employer. Often these are insured benefits like Private Medical Insurance or Life Assurance – but they can include any benefit, depending on what’s important to the employee demographic.
Voluntary benefits are those which the employer offers, but which are paid for by employees if they select them. Payment is usually from the employee’s salary, or from a benefit fund which the employer may provide – a fixed sum for each employee to spend on whichever voluntary benefits they choose.
When you start exploring the use of an employee benefits platform for the first time, this is something you’ll hear a lot. It’s the fee you pay for the use of the provider’s technology as you are using their product and not building it yourself. There are a couple of common models:
- An all-encompassing fee for the use of a provider’s employee benefits platform regardless of how many employees you have. This will typically be a flat fee which increases each year in line with Average Weekly Earnings or the Consumer Price Index.
- A per head fee which is calculated and billed quarterly or annually. This will fluctuate depending on the number of people you employ at the point the calculation is made. There are usually breakpoints in the calculation too, so that the more people you employ, the lower the per head fee.
Most third-party employee benefits platforms include an implementation fee. This is because the work required to set up and launch your scheme is significantly more than when you enter the ‘business as usual’ phase.
Implementation fees can vary from provider to provider. At PES we account for the implementation fee in our annual fees over a three-year contract so that our clients don’t have to find a large up-front sum in order to reap the rewards of using HR technology to improve business performance.
A very broad term which is perhaps best explained with some examples. It can mean:
- integration of systems through data transfer – your HRIS and benefits platform have a specified file format so that data can flow seamlessly between the two.
- integrated login protocols so that SSO can be adopted (see SSO definition), ensuring your employees have the best possible experience of your various platforms.
- the use of application programming interfaces (APIs) to integrate your benefit providers with your benefits technology.
Total Cost of Ownership
If you were building your own software, you might calculate the cost of the upfront build and then the maintenance costs for the expected shelf-life of the technology – let’s say for three years. This would be your Total Cost of Ownership.
If you’re using third-party software, then this refers to the cost of your implementation fee, ongoing licence fees and any other contractual commitments included in the initial term of the agreement you are entering.
Software as a Service. This is a distribution model by which a company hosts an application and makes it available to customers through the Internet.
For example, PES hosts and maintains happypeople, our employee benefits software platform, and makes it available to our customers for a licence fee.
Single Sign On. This is a form of integration (referred to earlier). It means employees only have to sign on to the system once to be able to access benefits from multiple providers. For example, an employee might login to their self-serve HR portal and then through SSO be able to access their benefits platform without the need to enter further login details.
What is the ‘cloud’?
Cloud-based computing in simplest terms refers to how data and applications are hosted. Instead of using traditional physical servers based on a company’s premises, cloud-based data and software is hosted in a secure datacentre where servers are connected by the internet.
Although not based on-site, PES hosts its own employee benefit platform servers within a UK-based datacentre, so happypeople is not currently cloud-based.
This is period of time in which employees can select or upgrade certain benefits. Many years ago a company adopting an employee benefits platform would have one of these a year.
The world has moved on. To offer a better employee experience, there are now rolling windows throughout the year, meaning that employees can select benefits when they need to, rather than when their employer makes them available.
The annual enrolment window does still exist in some cases, but is likely to apply to insured benefits.
See point above. This removes the need for a fixed annual window and allows employees to access their benefits at the point in time when they are relevant and matter most.
For example, is an employee more likely to select a Cycle to Work voucher in December when it’s wet and cold, or in April when we have a freak heatwave in the UK?
This is the document that you will sign off before any work starts on building your employee benefits platform. It captures all the important details relating to your scheme, including rules for each benefit, eligibility, which providers you’re using and more. It’s essentially the bible from which your platform is built and is critically important to the long-term success of your project.
Cost per capita
Once you know the total cost of having a platform each year, you can divide by your total population to work out the cost per employee – or cost per capita.
Secure Sockets Layer/Transport Layer Security. This is a standard security protocol for ensuring that all employee data is transferred securely.
Secure File Transfer Protocol. This is another protocol used for secure file transfer over a network.
Does this need any introduction? The EU General Data Protection Regulation became enforceable last year. It places the onus on organisations to manage personal data in accordance with EU law.
For companies offering employee benefits, this means that technology can help to ensure that employee data is held and transferred securely (see terminology above). Of course, your employee benefits platform provider needs to be GDPR-compliant too.
IASME Gold Standard
Information Assurance (IA) for Small Medium Enterprises (SME). This independently audited accreditation shows that standard holders are GDPR compliant and demonstrate a host of other privacy and security measures. Gold is the highest standard achievable. The IASME Gold standard is developed alongside Cyber Essentials and incorporates many facets of ISO27001 and Cyber Assessment Framework (CAF), as well as GDPR.
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Delivering a great employee experience is a challenge for growing organisations. At PES, it’s what we do. Our online employee benefits platform, HR support and workplace wellbeing services bring out the best in your employees – enabling your business to thrive.