View all Articles

Is Your Benefits Administration Process Running Smoothly and Efficiently?

Today’s increasingly competitive business environment demands that companies find more efficient, productive ways to run both customer-facing and back-office functions – not the least of which is HR. If you’re challenged daily to do more with less, outsourcing benefits and other HR administrative functions may be the answer.

Benefits administration outsourcing (BAO) has become even more prevalent in recent years, in response to legislative changes related to health insurance, statutory paid leave laws, and other compliance issues. A recent study shows that, on average, 40% of companies outsource all of their benefits functions, as reported by the International Foundation of Employee Benefit Plans (IFEBP), and more than one-third have increased outsourcing in the past two years. Some of the individual areas outsourced include COBRA administration, FMLA/leave management, flexible spending accounts (FSAs), and employee assistance programs (EAPs).

The Advantages of Outsourcing

“An outsourcing increase is a positive thing for benefits departments,” according to IFEBP Research Director Judith Stich. “Benefits staffs are working smarter and more efficiently by choosing the mix of outsourcing, co-sourcing and insourcing that’s right for them.”

Here are some of the key advantages to a BAO partnership:

  • Cost savings: Changes to benefit plans and updating the online enrollment portal happens only once or twice a year, so it may not make financial sense for you to have a full-time in-house manager for this function. When you outsource, you can determine exactly when and how you need help, and pay accordingly. System functionality evolves quickly and frequently, and working with a specialist will save time.
  • Increased productivity and efficiency: An efficient benefits platform – which your partner firm can design, implement and manage – is an advantage not only for your HR team, but also for your employees. It will save them time, provide them with immediate access to relevant information, and demonstrate your commitment to meet their needs. As a result, everyone is happier, more motivated and more productive.
  • Reprioritization of HR workloads: Dealing with day-to-day administrative tasks can distract HR staff from tackling more important business functions, such as recruitment planning and employee engagement. A BAO, or similar partnership, can help refocus your HR department’s energies on strategic areas that will positively impact your entire organization.
  • Access to the latest technologies: Technology is a key way for HR teams to lower costs and achieve better results while also giving employees the services they want, when they want them. Outsourced providers have the greatest access to the latest technologies and expertise on using them. They can offer you the chance to use these tools to your company’s advantage, without having to make a big investment in your own IT infrastructure.
  • Improved compliance: Legal requirements around employment are complex and ever-changing. At the same time, you may be widening your benefits coverage into areas that require greater insight into compliance and liability. Your outsourced provider can relieve you of this burden.
  • Employee Satisfaction: When a company outsources benefits administration work to a third party, employees often have access to a dedicated, confidential, and experienced resource for questions related to their benefits and enrollment. This allows HR departments to focus on other initiatives while knowing their employees are well taken care of.

HR Works has been offering customized benefits administration services and HR solutions for organizations in the public, private and not-for-profit sectors for close to three decades. While human capital challenges are the nature of your business, solving them is the nature of ours. Read our related posts or contact us today to learn more.

© 2019 HR Works, Inc. All Rights Reserved

HR Works, headquartered in Upstate New York, is a human resource management outsourcing and consulting firm serving clients throughout the United States for over thirty years. HR Works provides scalable strategic human resource management and consulting services, including: affirmative action programs; benefits administration outsourcing; HRIS self-service technology; full-time, part-time and interim on-site HR managers; HR audits; legally reviewed employee handbooks and supervisor manuals; talent management and recruiting services; and training of managers and HR professionals.