Mercer Marsh Benefits

HR technology spend driven by centralization, AI, analytics

Organizations are continuing to significantly invest in digital solutions for better benefit centralization, administration and analytics, with AI a key focus, our new survey shows.

Organizations are investing in digital solutions for better benefit centralization & administration.

400+ HR professionals – in mostly regional and global roles from across 11 markets – took part in our recent pulse survey to share the most significant trends impacting employee benefits and technology, in a follow-up to the full 2023 employee benefits and technology report.

Just as in 2023, this year we found that almost 50% of total HR budgets are still being allocated for tech investment, with two key drivers behind this:

The need for greater consistency and centralization across regional and global teams
The use of AI for analytics and employee reporting

Consistency and centralization key to employee experience

An overwhelming 84% of organizations felt that delivering a globally consistent employee experience was their highest priority for the next 12 months. As the world becomes more and more connected, and DEI initiatives top the agenda, delivering a globally consistent and equitable employee experience is more important than ever for hiring top talent, improving retention and keeping employees engaged with their benefits.

Consistency brings with it not only economies of scale, but a more efficient approach to data management, administration, communications and technology. 85% of organizations confirmed they had either already centralized their benefits operations, or that they plan to within 1-3 years.

The benefits of this unified approach is not limited to tech and operations, it rings true across the entire benefits ecosystem. That’s why 45% of respondents are looking to consolidate their benefits technology and brokerage/consultancy with a single adviser in the next 12 months, and a following 43% over the next 2-5 years.

AI uptake for HR analytics and reporting

A growing number of organizations globally are looking to capitalize on the potential of AI for more detailed and accurate analytical insights about their employee population.

When asked if they planned to use AI in relation to HR and benefits specifically, 85% of employers said they are either currently using AI or plan to do so within the next 12 months, with 52% saying investment in AI was becoming a higher priority. Advanced and predictive analytics to make more informed decisions about and for employees was seen as the main opportunity.

Employers are looking to use AI to capture, manage and analyze data-driven insights about their employee base. With analytics, HR departments can go far beyond tracking the success of a benefit or the preferences of a region. They can create and track benefit profiles, allowing them to gain a deeper understanding of benefits usage across their organization and target communications, or switch up schemes accordingly.

HR departments equipped with AI analytics capabilities can see in near real-time how changes to the cost of living are impacting the uptake of their benefits offerings and identify gaps and differences by region. With strong analytics, HR managers can assess and report benefits return on investment to internal stakeholders, confirming their impact in a time of rising benefit costs.

Article

HR technology spend driven by centralization, AI, analytics

Organizations are investing in digital solutions for better benefit centralization & administration.

Consistency and centralization key to employee experience

AI uptake for HR analytics and reporting

About the authors

Jamie Fitt

Related insights

Driving efficiency and engagement: The power of consistency and consolidation

AI: A new frontier for benefits management

Tackling the cardiovascular and metabolic health crisis

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HR technology spend driven by centralization, AI, analytics

Organizations are investing in digital solutions for better benefit centralization & administration.

Consistency and centralization key to employee experience

AI uptake for HR analytics and reporting

Speak with a Mercer Marsh Benefits consultant

Employee benefits and technology trends report

About the authors

Jamie Fitt

Related insights

Driving efficiency and engagement: The power of consistency and consolidation

AI: A new frontier for benefits management

Tackling the cardiovascular and metabolic health crisis

Top health trends for 2025