LUXA Human Resource Articles

How Outsourcing Benefits Administration Can Help You


Why should I outsource?

In today’s ultra-competitive business environment you need to find more efficient ways to manage your employee investment. At the same time there are many uncertainties regarding healthcare and employee relations. It can be impossible to keep up on all the regulations, laws, and requirements placed on employers today.

It may be time to consider help with your benefits administration. Outsourcing occurs when a company purchases products or services from an outside supplier, rather than performing the same work within its own facilities, in order to cut costs. This is particularly true for Human Resources, Payroll, Workers’ Compensation, and Employee Benefits Administration.


3 reasons to consider outsourcing benefits administration:

  1. If you don’t have the training and experience you will drop a ball, and that could cost you.
  2. Hiring a full time in house Benefits/HR team can be costly. Payroll, benefits, vacation, and compensation increases over time and can create big issues for employers.
  3. Assigning the task to a staff person is not the answer. They are not going to have the experience and training to keep your business out of trouble.

What are the benefits?

  • Reduces operating expenses.
  • Offer economies of scale found within large firms allowing you to have more experienced professionals.
  • Companies that outsource typically see reductions in:
    • Health insurance
    • Workers compensation insurance
    • Legal fees
  • With a professional outsourcing firm, businesses minimize legal and employment risks. Labor laws change on a regular basis, and can be time consuming for employers to keep up to date.
    • Provides training to management on hiring, discipline, OSHA, and other HR issues.
    • Allows your company to focus on its core business functions.
    • Provides employees with greater accessibility to HR representatives to get prompt, accurate answers to their questions.

Outsourcing benefits and payroll sometimes gets a bad rap, with the mere mention raising fears of redundancies. However, outsourcing certain benefits can make HR life much easier, reducing the time needed for administration tasks and allowing more room for strategic thought.



Topics: Outsourcing