How Digital Nudges Transform Workforce Management

by Michelle V. Rafter


igital nudges are everywhere.

The email from the benefits team reminding employees to update their health care preferences — that’s a nudge. So are the notifications managers send workers on their smartphones telling them when their next shift starts. As are group texts from people in a leadership training class reporting their progress.

Mobile devices, enterprise social network tools and other workplace apps have made it easy to deploy such digital nudges to encourage behaviors that benefit both employees and the organization. Companies are using digital nudges to reduce absenteeism, increase productivity, improve communications, meet individual and team objectives, and boost performance in other ways.

Danny Garcia, chief executive of JDS Security Services in Chula Vista, California, has used nudges for a few years to remind security guards of upcoming shifts. The business wouldn’t be the same without them. “They make it easier,” Garcia said.

Not everything works as a nudge. To be effective, nudges must be well conceived and executed as part of a larger change-management plan with leadership support. “Keep it simple, make it authentic and connect [them] to purpose,” said Laura Plato, president and chief operating officer at Causecast, an online system for organizing employee volunteer work that incorporates digital nudges in its platform. “If it doesn’t feel natural and fun, your employees won’t want to join in.”

Nudges got a bum rap when an April 2017 New York Times investigation revealed that Uber Technologies Inc. used them to encourage drivers to work longer, even if the extra time behind the wheel didn’t result in much more money.

But nudges aren’t inherently bad. In fact, long before companies caught on, public agencies in the United States, United Kingdom, Australia, Germany and elsewhere were using them to encourage people to pay taxes on time, conserve energy, get vaccinated and take advantage of government loan programs. A recent study showed that nudges have a bigger impact per dollars spent than more traditional government policy tools such as tax incentives, subsidies and education to alter people’s decisions, according to results published in Psychological Science.

Nudges should appear when people are open to making a change. They should be connected to small steps that reward people’s accomplishments.

The Science of Nudges

It’s human nature to revert to the status quo. Nudges help change that. Nudges are a key principle of behavioral economics, a field that combines psychology and economics to understand how people make decisions and how that process can be disrupted to encourage better choices.

According to behavioral economics, nudges should appear when people are open to making a change. They should be connected to small steps that are easy to take and reward people’s accomplishments rather than point out their shortcomings. Nudges are more successful when there’s a plan behind how they’re used, they’re social, they hold people accountable in some way — but don’t penalize them — and offer small incentives for reaching intended goals.

Express Scripts, a St. Louis-based pharmacy benefit manager, has used nudges to drive employee behavior changes large and small. In an example of the latter, Express Scripts’ HR communications staff uses nudges to remind its 26,000-person workforce to participate in engagement surveys and enroll in benefits.

Nudges also played a part when the Fortune 500 company created a half-dozen employee resource groups to make its workforce more inclusive. The HR communications department subscribed to a cloud-based workplace culture platform from Bonfyre that employees in resource groups could use to share articles, books, photos and activities. Sharing information through the enterprise social network-style platform contributed to a stronger sense of community, according to Jen Pruett, Express Scripts’ senior director of HR communications. The social sharing that the platform encourages — a key component of nudges — boosted membership in resource groups to more than 4,400 in the past three years, Pruett said.

Gamification and Nudges

In 2016, Express Scripts also used nudges to increase awareness of its annual United Way campaign. Employees each got a puzzle piece with part of the company’s United Way campaign slogan written on it and directions to find the co-worker whose own piece fit theirs. Once they’d found their mate, the two-person teams were encouraged to post pictures of their completed puzzle to the employee engagement platform with a #unitedway hashtag.

Turning a process into a game is another common nudge technique. Pruett wouldn’t directly attribute the 4 percent increase in involvement in last year’s United Way campaign to game-related nudges. But “we feel like creating the buzz certainly did influence that number,” she said. So much so, Pruett is planning something similar for Express Scripts’ 2017 United Way campaign.

Getting company leaders involved is critical. In Express Scripts’ United Way puzzle-piece game, the company’s CEO and chief human resources officer were among the first to post their photos online. “It’s important to get executive support and participation to drive employee participation,” Pruett said.

Nudges can be effective for cutting tardiness and absenteeism. Peter Swaniker is founder and CEO of Nimble Software Systems, the Carlsbad, California, company that makes the shift-scheduling software that JDS Security uses to nudge its workers about upcoming shifts. Based on data Nimble aggregated from 1,000 customers over a two-year period, Swaniker estimates nudges from the shift-scheduling platform reduced overall tardiness by 21 percent and absenteeism by 16 percent.

“If you think about a company that provides security guards to a mall, if they don’t show up for their shift on time, it’s a major problem,” Swaniker said. “The customer is upset because the guard didn’t show up and they have to scramble to replace them,” and a no-show could put them in violation of contractual obligations. “Having people show up on time is critical,” he said.

Still, nudges aren’t a panacea. For JDS Security’s Garcia, no amount of nudging will change the fact that the security business runs all day, every day, 365 days a year. Some workers will be no-shows for holiday or weekend shifts, Garcia said. However, security personnel can use the same software to trade a shift they can’t work, with the operations manager’s permission. Dispatchers also use the scheduling software to nudge workers to take breaks or remind them of work-related tasks such as checking that properties are locked at a certain time of day.

In addition to workplace culture and employee engagement, shift scheduling and HR benefits communications, tech vendors are building nudges into platforms for other HR functions. Some examples:

  • Saba Software builds behavior economics-based gamification into cloud-based tools it sells for compliance and learning. Co-workers award points to each other for their contributions on a public leaderboard, the kind of social nudge that can encourage and motivate other employees to improve their own performance. Leaderboards built into other Saba products chart team progress on work projects.
  • Asana builds nudges into its workplace collaboration tools, breaking projects into discrete steps that can be shared by everyone on a team.
  • Intelycare, a cloud-based platform and learning management system for on-demand nurse staffing, uses gamification and financial incentives to encourage nurses to sign up for clinical courses, among other things.
  • Cloverleaf, a workforce teambuilding platform, includes digital nudges based on StrengthsFinder and other common assessments to help employees improve communications and relationships with coworkers.

Whatever workforce processes a company decides to use nudges to improve, creating a logical sequence and breaking tasks down into bite-sized pieces makes it easier for employees to get involved, said Causecast’s Plato.

At companies that use Causecast to encourage employee participation in volunteer service projects, once someone signs up to help a nonprofit, they’re offered the chance to donate via a one-click button as a next step. Employees get email reminders before and after events to encourage them to share what they’re doing with co-workers and volunteer or donate again.

“We make it fun and easy to amplify their impact without them having to spend a ton of extra time on boring administrative tasks,” Plato said. “Anything that saves time, while helping you feel a sense of meaning and purpose, is powerful.”