For large, self-insured employers, vendor management involves identifying and negotiating better arrangements with third-party vendors who administer benefits. A report from The Advisory Board Company shows that while vendor management is often overlooked by plan sponsors, the process can yield savings of between 5% and 10%.
For HR executives, “their experience is mainly in working with things that directly impact the employee,” says John Workman, senior consultant of research and insights with The Advisory Board Company. “So plan design, setting the premiums – those have traditionally been more inside their control whereas the vendor management piece has typically been managed by an outside consultant.”
