Benefits administration: The Secret to a Winning Formula
Reducing labor costs is common across companies today. But without proper analysis of the real costs of labor, such reductions can lower employee productivity, hamper performance goals, and leave employer expectations unmet.
Best-in-Class companies are looking deeper at the impacts of across-the-board labor cost reduction. 39% understand the connection between stagnant wages and employee disengagement, while 35% are now factoring in how the rising cost of health care strains employees.
To help them even more, Best-in-Class companies are using vendors. These vendors analyze labor costs and payroll separately, then bring them together to define the true cost of labor. A breakdown of Best-in-Class trends shows that these companies are:
- 36% more likely than All Others to integrate salary forecasting into their workforce planning strategy that then directly links to performance management and workforce planning.
- 24% more likely to directly link compensation management to workforce and resource planning.
- 36% more likely to directly link benefits administration, optimization, and planning to organizational resource planning without first routing it through compensation management and labor resource management.
Taking these trends into consideration, the top pressure in benefits administration today is devising a strategy to optimize the cost of benefits plan management and benefits plan offerings—employers will always seek lower labor costs, while employees will continue to need flexibility in the benefits plan they use.
After volatility associated with the Affordable Care Act, 61% of companies now offer between zero and four benefits plan arrangements. The key to offering more for the Best-in-Class is that they are 75% more likely to engage a benefits broker for plan management and optimization than they are to go it alone.
As the Best-in-Class adopt greater access to multiple plan offerings coupled with streamlined plan navigation, they are 76% more likely than All Others to achieve high engagement from more than half of the workforce. Employees are feeling a positive impact from managing their personalized plan and also achieving optimized and, in some cases, reduced costs.
As a direct consequence of increased plan diversity and greater employee participation in the benefits environment, 37% of Best-in-Class companies have been able to keep benefits costs constant while an additional 37% have kept cost increases to a minimum relative to changes in hiring and changes to the organization.
Key to enrollment success is mobile benefits accessibility, benefits integration with central compensation planning, and a unified workflow for an optimized end-user experience that maximizes efficiency in benefits cost optimization.
Today, Best-in-Class companies are 43% more likely than All Others to find that benefits integration with core HR records management has a strong impact on employee enrollment and benefits data management. The Best-in-Class are also 11% more likely to find that mobile access has strongly improved enrollment rates, providing the data needed for yearly benefits cost evaluation and comparison.
Keys to enrollment success include mobile benefits accessibility, benefits integration with central compensation planning, and a unified workflow for an optimized end-user experience that maximizes efficiency in benefits cost optimization.
Aberdeen tabulates and weights Key Performance Indicators to determine Best-in-Class companies. Best-in-Class companies are those that fall into the top 20% of performers; the remaining 80% make up All Other companies.
Source: Benefits Management: Separating Benefits from Compensation Is Key to Success, Aberdeen Group, March 2017