Employee benefits administration is a key area of opportunity for organizations to reduce costs and improve performance.
While it's true that employee benefits themselves aren't just a "cost" for organizations, but more of a strategic tool to help retain talent and improve workplace satisfaction, the overall work related to this enterprise often diverts time and resources from more strategic activities.
Finance leaders should look for innovative ways to get the most bang for their buck when administering employee benefits. Here are three key strategies that can better scale your benefits administration process.
It's no secret that outsourcing employee benefits administration can help reduce your costs, but many organizations are finding that it also helps improve compliance. According to the Society for Human Resource Management, organizations are outsourcing approximately 40 percent of their benefits functions, and the top reason for outsourcing for 47.8 percent of organizations was to access specialized expertise, especially related to legal compliance.
2. Transparency Tools
At many organizations, employee benefits come in all shapes and sizes. As a result, employees face a growing array of complexities related to their benefits, with more choices available for types of health insurance plans, different deductibles or benefit levels and voluntary insurance options. But greater complexity can also bring greater costs, such as more calls to HR and more time spent doing information sessions and training on benefits enrollment.
This is why many organizations are offering transparency tools such as websites or mobile apps to help their employees make better decisions about benefits. These tools include health insurance benefit comparison calculators to help employees figure out which health insurance plan is the best fit for their needs, or health and wellness trackers to help employees stay healthier and more productive. Many outsourced providers and insurers are offering more sophisticated transparency tools to help make enrollment and accessing benefits more efficient.
Today's organizations have employees from multiple generations with differing financial needs and concerns depending on their stage of life or family situations. Targeted employee communications and customized benefit options are more important than ever. By focusing your organization's benefits-related communications to various age groups at different life stages, you can be more likely to engage employees at the right time with relevant communications — and as a result, improve the efficacy of the benefits program.
Benefits administration is often costly and time-consuming, but it doesn't have to be. By outsourcing, leveraging new technology and tools and engaging employees with relevant targeted communications, organizations can make their overall benefits program work more efficiently. Finance leaders can help create a more cost-effective benefits program while ensuring that their organization's HR team can reallocate its time and effort toward more strategic activities, such as employee retention and recruitment.