Should my clients outsource benefits administration? It’s a legitimate question to ask when considering ways to streamline business operations. HR departments are often considered overhead, so outsourcing one or more responsibilities in this area can open up that highly valuable department and improve ROI.

Selecting an outside firm to manage benefits administration means bringing in HR experts willing to share their best practices with employees, ensuring they understand and appreciate their own benefits package. With the right information, employees make more informed decisions regarding benefit options from the start. Not only that, but they’re more likely to appreciate the benefits they’re able to get, as well as their employer who’s providing them.

Bloomberg/file photo

Additionally, outsourcing a certain set of tasks gives existing HR department the ability to evolve into a more efficient and effective team, regardless of the resources available to them. They can focus on the tasks best handled internally while making the employee experience their top priority. HR teams already have enough on their plate, and outsourcing provides them with the flexibility to turn their focus back to their employees.

Deciding to utilize a benefits administration outsourcing partner requires an initial period of transition as the outsourcing firm learns about the company and prepares a customized solution based on existing operations. This cooperative period provides the ability to leverage the services offered by the outsourcing firm in the most effective way.

Outsourcing vs. co-sourcing
Outsourcing isn’t the only option. For companies that wish to stay more involved with the benefits administration process, but still need additional help, co-sourcing is worth consideration. Co-sourcing often means the company retains access to review and make changes to existing processes handled by the outsourcing firm, while the firm manages things like benefits enrollment, new hire onboarding and data transfers.

Co-sourcing also allows for an existing HR employee to become an “internal expert” on the processes managed by the outsourcing firm, handling time-sensitive and high-priority issues directly.

There are a variety of outsourcing firms that offer services that are customizable to the needs of a company. Make sure when researching firms to ask the right questions, such as:

  • What is your benefits strategy today? In the next three years?
  • Do you work directly with employees or solely through an HR department?
  • What specific dynamics are most important to you across HR and your organization?

When considering benefits administration outsourcing, make sure to find a partner that will not only educate and support employees through the benefits process, but also will improve the efficiency of HR departments so that everyone has a high-quality experience as a co-source.

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