The Advantages Of Outsourcing Benefits Administration

In this economy, companies should be looking for new yet proven ways to save money.
By: Beth Williams
June 9, 2009 - PRLog -- It is common knowledge that for most employers, payroll processing is the biggest expense they incur on a regular basis. However, benefits administration and processing comes in at a close second in terms of employer cost. Indeed, as health care benefits become more and more complex to deal with, companies are spending increasing amounts of time processing them for their employees. When payroll processing and other human resources tasks are added to the mix, it's easy to see why benefits administration can be such a burden on midsized companies.

To deal with this growing problem, many companies are choosing to outsource their benefits administration. Doing so allows their existing human resources staff to perform other critical functions, and has a host of other advantages for companies looking to increase their efficiency and lower their costs. There is little doubt that benefits administration outsourcing will continue to rise in popularity; as noted by Norman LeClair, CEO of Corban OneSource (An HR Outsourcing Company for midsized businesses, "Outsourcing benefits administration has become very popular for companies with 100 to 1000 employees because it is proven to save money while increasing the customer service to employees." Below, we take a closer look at some of the compelling advantages to outsourcing benefits administration.

Reduce Costs

By outsourcing their benefits administration, companies can stand to cut costs and save a great deal of money. As things like health benefits become more and more convoluted to manage, keeping a human resources staff trained and up-to-date on performing these operations can be a costly proposition. Human resources personnel who have in depth experience in benefits administration typically come with very high salary requirements, increasing the operating costs for small to midsized companies enormously.

Rather than keep trained personnel on staff to tackle daily benefits administration tasks, many companies are discovering that outsourcing these functions saves them a lot of money in the long run. The firms that handle such tasks specialize in benefits administration processing, and typically cost a company far less than keeping in-house personnel up-to-date and fully trained. Since benefits administration has become so complex, most companies normally need at least one employee fully dedicated to handling it; for a lot less money, it can hire an outside agency to do the same work.

Free Up Resources

Obviously, human resources departments do much more for an average company than benefits administration. They handle payroll processing, hiring and a slew of other critical tasks. However, benefits administration can take up an inordinate amount of employees' time and resources; other tasks may fall by the wayside. By outsourcing benefits administration, though, companies can free up existing HR personnel and allow them to get the important, day-to-day work done in a timely manner. This increases overall efficiency and improves employee morale considerably.

Improve Customer Service To Employees

When a company's human resources department is bogged down by the myriad complexities involved in benefits administration, it is less capable of providing excellent customer service to the organization's employees. Human resources should always be available and able to handle all sorts of employee concerns; they should be viewed and looked upon as a place for employees to receive the information that they need. By outsourcing benefits administration, companies can free up a lot of their HR personnel's time, allowing them to increase their level of customer service to employees in general.

Streamline The Benefits Process

The typical staff at a benefits administration outsourcing firm is comprised of highly trained and very experienced specialists who know precisely how to handle all aspects of the benefits administration process. Therefore, these companies can help organizations find many ways to streamline their benefits process, making it more amenable and accessible to each and every employee - from the bottom up. When the benefits process is truly streamlined, it allows a company's employees to take full advantage of those benefits - and keeps them up to date on what they are entitled to and how to receive those benefits.

Outsourcing Benefits Administration: A Great Choice

As demonstrated above, there are many compelling reasons for outsourcing benefits administration. With the highly competitive nature of today's business world, companies must continually strive to cut costs and improve efficiency. The increasingly complex nature of today's benefits administrations works against those goals, bogging companies down in red tape and subjecting them to countless errors and expenses. Removing those functions from the shoulders of existing HR personnel frees them up to focus on what truly matter: providing excellent customer service to the company's employees.

Companies that are struggling in today's worrisome economic climate are likely to find that outsourcing their benefits administration gives them the boost needed to keep them afloat. After all, being flexible and willing to adapt to changing times is critical to remaining a viable operation. Outsourcing benefits administration is just one other way of doing that with skill and ease.

# # #

Senior HR Consultants Inc. is a group of HR Professionals that average more than 25 years of experience per Consultant. Our primary goal is to help mid-sized companies look at ways their HR Department can become more profitable.

Like PRLog?
Click to Share