Benefits administration can be something that is somewhat of a bit of a conundrum. Yes its important to provide the right kinds of benefits to your employee’s, yet at the same time, you want the most cost-effective model set in place. You want to do what’s right for your employee’s, but at the same time know this could be the #1 expenditure for your business and potentially become lost profits over time. There must be a balance, and this balancing act can be hard to execute with the precision required to keep all parties happy.
From your CFO, to any of your regular employee’s, all want what’s fair when it comes to benefits. The benefits package offered, in a way, is a representation of the company itself, and how much they want to invest in and value a new internal employee. Gartner Inc. research reveals that 80% of companies now outsource at least one HR activity, and that number is swiftly growing in 2020.
Larger companies are more likely to outsource benefits administration due to simply the size of their workforces, their multiple locations, or the complexity of their benefits programs. However, mid-sized or smaller organizations usually consider outsourcing benefit programs because they have a lack of internal resources and expertise.
It’s always specific to your current situation and whether or not there is cost benefits in the end, or not. That’s something we’re big on here. If you think it will ultimately benefit you and make life easier, or furthermore simpler, then do it!
Here are 5 big advantages to outsourcing benefits administration:
1) Reducing HR Headcount
If you already have HR workers and a team that is assigned to other HR functions, this is a good thing. You can then break off ben/admin and leave it to someone else while your HR team can focus on other things.
2) Expertise up to date
Benefits administration experts stay up to date on the federal and state regulations that affect employee benefits, including pensions and health insurance. So when working with one, it can make it less likely that an employer will miss an important shift in compliance and legality norms.
Of course streamlining and boosting efficiencies in any area of HR is huge regardless of company size or industry.
4) Shielding liability
Outsourcing ben/admin can also reduce an employers’ liability in the case of mistakes, by shifting the burden to the outsourcing company. Translation – Blame us instead! We will gladly take on the burden, that’s the whole point.
5) Improving Engagements
Outsourcing ben/admin can give the existing HR team time to focus on more strategic activities. As a result, freed from menial, repetitive, and time consuming administrative tasks, the HR team will be able to be more responsive to employees’ other concerns, leading to higher employee engagement and retention.