Outsourcing benefits administration under the spotlight


Outsourcing benefits administration under the spotlight

Experts reckon that three-quarters of organisations currently outsource some of their human resource function. The latest issue of Employee Benefits magazine takes a closer look at one of the fastest growing areas of the market — outsourcing benefits administration.

Pushed by a need to improve employees’ awareness and understanding of benefits — with the added impetus of the growth of flexible benefits — companies have increasingly looked to outsource benefits administration. According to one estimate, this part of the outsourcing market is growing at about 40% a year.

But what is it?

What then is outsourced benefits administration? Employee Benefits magazine defines it as a means of taking out of house the elements of the benefits administration process that would traditionally have been handled in-house by the employer rather than the benefits provider.

It includes all communication to staff about their benefit entitlement — benefits statements are said to be an area ripe for outsourcing — and can even involve delivering paperwork and calculations to the Inland Revenue.

The case for outsourcing

Outsourcing can deliver a range of important business benefits, the report says. Not only does outsourcing allow a company to focus on core activities, it can also lead to improved communication of benefits.

What’ s more, there may be an easing of the overall administrative burden. As Employee Benefits magazine explains: Reducing the hassle factor is a key reason why organisations choose to outsource — for example, the whole area of reporting obligations to the Inland Revenue.

Words of wisdom

Outsourcing benefits administration is not a quick fix. Employers looking to outsource may well need to get their house in order before approaching a third party to take over the task for them. And the best system will be hampered if the basic data is poor. — Employee Benefits.

Want to know more?

Title: Outsourced benefits administration , Employee Benefits, September 2000.

Availability: contact Employee Benefits subscriptions in London, tel: 020 7292 3719 or email employee-benefits@centaur.co.uk

Check out the magazine’ s new web site . . . www.employeebenefits.co.uk