How Benefits Administration Outsourcing Can Help You Compete

Many businesses decide to outsource employee benefits administration. They find that, particularly with a PEO, outsourcing:

• Makes benefits administration more cost effective.
• Lifts major responsibilities off the shoulders of executives.
• Gives employees easier access to benefits information and enrollment.
• Gives smaller companies access to big-company benefits.

According to WTW's Global Benefits Attitudes Survey, there’s been a 50% increase in the importance of benefits as a reason to take a job over the past several years. In the US, 65% of employees say a benefits package is an important reason to accept a job and to stay with an employer.

Clearly, health insurance, retirement plans, paid time off and other perks are important to employees. Small and medium-sized businesses need a way to compete with bigger rivals for top talent. Benefits administration outsourcing can provide a solution.Let's look at how HR outsourcing could help your business attract good workers and let them know that you care about their well-being.

The Advantages of Outsourcing in Benefits Administration

For SMBs, benefits administration outsourcing can be incredibly helpful in giving employees a better experience. At the same time, it can help a business's bottom line.

A variety of consulting firms and HR outsourcing companies can provide this type of service. Using a professional employer organization (PEO) like TriNet, has certain advantages.

PEOs handle a broad range of HR functions including payroll, benefits, compliance, risk management and HR administration. For each of its clients, a PEO becomes the employer of record for tax and insurance purposes. This can give a PEO tremendous economies of scale for benefits, HR administration, technology and other HR resources.

Furthermore, PEOs can provide open enrollment portals, which simplify the enrollment process for employees.

The economies of scale that can come with benefits administration outsourcing have many positive aspects for small and medium-sized businesses. Read on to learn how outsourcing your benefits administration can help your business and improve employee engagement.

Big-league benefits for employees

A PEO that represents 20,000 businesses and more than 350,000 employees simply has more bargaining power than one small business when it comes to securing benefits plans from multiple health insurers.

That PEO also has experts who can assess the strengths and weaknesses of carriers and the prices they charge. You, as a small business owner, do not have to become a health insurance expert to obtain benefits for your employees.

A PEO can find better benefit options, and at better rates for you and your employees. That could mean cost savings for all concerned.

Your employees could gain access to medical, dental, vision, life insurance, disability, retirement and commuter benefits. HR service providers might even give you access to perks like discounts and corporate rates with top brands for dining, entertainment, travel, gym memberships and more.

Easing the administrative burden

Small businesses often have small HR teams, or none. Outsourcing shifts the enormous task of managing benefits administration and fielding employee questions to the benefit specialists.

Your team can focus on core priorities and business growth while your PEO takes care of:

• Plan selection
• Payroll deductions
• Open enrollment
• Benefits decision support

In addition to the HR experts a PEO provides, you could gain access to cloud-based software that streamlines these administrative duties.

Compliance

If you fail to manage benefits administration properly, you could run into serious compliance problems.

A PEO could help you minimize risks by delegating administrative responsibility for health plans and primary fiduciary responsibility for retirement plans.

You could gain a little peace of mind while you outsource:

• Affordable Care Act compliance.
• 401(k) plan requirements like Form 5500, audits, plan testing and monitoring of investment options.
• Management of COBRA notices and payment collection.

Cost-effectiveness

Outsourcing benefits administration could help you reduce expenses. A study by the National Association of Professional Employer Organizations found that PEO clients reported an average savings of $1,775 per employee per year. (Of course, individual business results may vary.)

As we mentioned earlier, when employees are happy with benefits, they are more likely to stay on the job. That means you could cut your churn rate and avoid expensive turnover. Benefits compliance services also could help businesses avoid costly claims, settlements and fines.

According to the NAPEO, businesses that work with a PEO:

• See a return on investment of 27% percent in cost savings alone.
• Grow twice as fast.
• Have 12% lower employee turnover.
• Are 50% less likely to go out of business.

Secure top talent

Without a doubt, your benefit offerings are an asset in the battle for talent.

According to a report by Metlife on Measuring the Business Value of Employee Benefits, 87% of leaders say that prioritizing employee well-being gives their organization a competitive advantage. The report also says 87% of employees would consider leaving a company that does not focus on their well-being.

For new employees who value premium benefits, TriNet works with leading providers both regional and national. TriNet also offers small and medium-sized businesses access to benefits that rival big companies, helping them compete for top talent.

Access to expertise

With all the intricacies that come with benefits administration, having access to experts with current knowledge can prove invaluable.

Benefits administration outsourcing may include access to a team of HR experts at your fingertips that can assist with workers' compensation or handle claim administration on your behalf.

Other experts might include industries-specialized teams who conduct on-site assessments to help with workplace safety. It's also good to have experts help you with employment-related claims.

Employee experience

Today's employees value the user experience and appreciate constant access to their benefits information. Look for third-party services that offer 24/7 remote access and mobile access through self-service portals. This can include services like streamlined employee onboarding and efficient new-hire training that will appeal to employees.

Outsourcing services might also feature streamlined benefits enrollment and easy communication between employee and employer. This makes the process smooth and accessible in one, easy-to-navigate location.

Time for Benefits Administration Outsourcing?

Access to premium benefit plans is no longer reserved for large companies, it is just as achievable for small businesses like yours. TriNet-sponsored benefit plans go beyond access to exceptional health and retirement coverage to include additional benefits such as accident and illness policies, auto and home policies, commuter benefits and more.

TriNet also adds to the competitive advantage and desirable offerings through their Enrich™ product line. This product line allows customers to offer tax-optimized reimbursements for expenses related to medical travel, education, disaster relief and child adoption. TriNet and Enrich™ can help you show that you care about your employees while improving access to premium benefits.

Learn more about how HR outsourcing could help with recruitment and retention. Download our free eGuide: Six Ways to Attract Top Talent: How to Become an Employer of Choice.