Top 5 Benefits Administration Outsourcing Myths Debunked

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What comes to mind when you hear the word ‘outsourcing’?

Employee layoffs? Questionable customer service? A generic overall experience?

There are many misconceptions and a lot of negativity surrounding outsourcing, most of which stem from a pure lack of understanding about how outsourcing actually works. Don’t let negative perceptions get in the way of making the decision that’s best for your organization!

Contrary to popular belief, outsourcing certain HR tasks, like benefits administration, can make internal teams more agile and productive. Rather than viewing outsourcing as a competitive, external force to be reckoned with, consider outsourcing a strategic move to create a specialized extension of existing internal teams.

If you are considering outsourcing, view our full list of myths below and download our free outsourcing guide for an in-depth evaluation of benefits administration outsourcing.
 
woman on benefits hr phone call

Myth #1: Outsourcing Is Expensive

Many administrators considering outsourcing believe that working with third parties is more expensive than handling services in-house.

The Reality: Outsourcing Can Save Money

Outsourcing can be a very cost-effective solution and can actually save your company money over time. Many outsourcing providers have moved away from a ‘one-size-fits-all’ approach to services and pricing and are offering more customizable solutions. The affordability of outsourcing is one of its primary perks!

Myth #2: People Will Lose Jobs If We Outsource

The fear that outsourcing will lead to layoffs or downsizing is real. The decision to outsource can initially lead to uncertainty and agitation across teams.

The Reality: Outsourcing Is An Extension Of Your Team

Though outsourcing benefits can be a replacement for dedicated in-house resources, this is usually not the case. More often than not, human resources teams are overwhelmed or under-trained to handle increasing workloads and complex compliance regulations. By outsourcing benefits administration, your team can offload time-consuming processes and focus more time on the activities that impact your bottom line.

Myth #3: Our Benefits Are Too Complicated For Outsourcing

Benefits administration is more complex than ever and each organization presents unique challenges. Many companies think their benefits are so complex that it would be impossible to outsource.   

The Reality: Outsourcing Partners Have Seen It All

There is no ‘one-size-fits-all’ solution to benefits administration. Each company is unique and benefits can be quite complex. The intricate nature of benefits administration can actually make outsourcing a great solution to remove the burden from your internal teams. A good outsourcing partner will fully understand the specific challenges and complexities of your organization and will provide a full plan of attack. Clear communication and transparency up front are key to connecting with a great benefits outsourcing partner.

Myth #4: We Are Too Large / Too Small To Outsource

Are we too big? Are we too small? What is the right size for outsourcing? Companies at both ends of the spectrum, from small startups to a large multi-million dollar corporations, have doubted the possibility of outsourcing.

The Reality: Size Does Not Matter

The old adage that “size doesn’t matter” is true, at least when it comes to benefits outsourcing. Are you the CEO of a startup seeking an efficient and affordable solution to manage the benefits of your small team? There’s a solution for you. Are you the human resources director for a large organization looking for a way to offload certain administrative tasks? There’s a solution for you. No matter your company size or your outsourcing goals, there is a solution for you.

Myth #5: Our Company Won’t Be In Control

Outsourcing can be a scary thought. How can you trust another company to truly understand and flawlessly execute something as complex and personal as benefits administration? This is a common thought, as companies ponder if they will lose that personal touch with employees or not be able to manage benefits to their exacting specifications.

The Reality: You’re In The Driver’s Seat

Communication is the key to prosperity in any successful relationship, including vendor partnerships. Without communication, needs are unspoken, assumptions are made, and crucial details fall through the cracks. It is important in your vendor vetting process to carefully screen the communication process to ensure timely and concise correspondence. A veteran vendor should clearly communicate the details related to cadence and format of all correspondences, which will ensure that everyone is on the same page at all times. You will be behind the wheel the entire time with the right outsourcing provider.

Don’t forget to view our complete benefits outsourcing guide for more information about benefits outsourcing statistics and best practices!

Intrigued By Outsourcing?

See how much time and money your organization could save by strategically outsourcing benefits administration. Contact us today for a complimentary consultation!  

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