Why Benefits Administration Outsourcing Is the New Norm

Written by benefitexpress | August 20, 2018

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For HR professionals and advisers alike, finding the best way to provide employees with the smoothest, easiest benefits experience is a goal that can often be difficult to accomplish.

From managing costs and administrative demands, to maintaining compliance, HR teams have a lot on their plate - and enhancing the benefits enrollment experience does not always make the top of the priority list. 

These growing demands are not new, but play a big role in the reason why many employers have begun outsourcing benefits administration for their organization. Keep reading to learn more!

More employers are outsourcing benefits administration

When it comes to benefits administration, more employers are seeking help from outside of their organization than ever before. For example, an industry study showed that two in three employers were outsourcing benefits administration in 2014. Then, in 2017, the study indicated more than three in four employers were outsourcing, an increase of nearly 18%.

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Those outsourcing are expanding the scope

Additionally, the study revealed that the employers who outsourced have also increased their number of outsourcing vendors from 2014 to 2017. The findings were categorized by employers with 1) less than 100 employees, 2) 100 to 999 employees, and 3) 1000+ employees.

While businesses with 100 to 999 employees displayed a modest increase in the use of outsourcing vendor partners, the most significant increase was seen in the 1000+ employees category, where 35% of employers in this segment had increased their number of outsourcing vendors since 2014.

Among those organizations, the average number of vendors used ranged from a low of two (for companies with under one hundred employees), to a high of five (for those with more than 1000 employees). This is most likely because as employer size increases, the complexity of administering benefits and completing other HR-related tasks also increases, ultimately leading HR professionals to team up with outside partners to help them manage their programs more efficiently. 

What does this mean for you?
The increase in number of vendors used is a telltale sign that employers are looking for a “best-of-breed” technology strategy - one service from different vendors - versus the all-in-one model.

Benefits administration outsourcing is a logical part of this HR technology strategy. Employers can look for flexible systems that integrate across HRIS software providers, which supports the best-of-breed strategy. Savvy buyers know to inquire about client service relationships and ask for references. And along with simplifying responsibilities for the HR team, benefits administration technology and outsourcing support can help guide employees to make informed decisions, ultimately enhancing employee engagement and workplace satisfaction.

Are administration demands wearing you down? Set your mind at ease with My Benefit Express™, a fully outsourced solution that simplifies your responsibilities and helps employees make informed decisions. Request a free demo today!

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