Amid rising challenges, benefits and HR professionals are often tasked to do more with less. A corporate survey dives into the data on the top challenges, staffing trends and outsourcing efforts facing benefits departments.
The following info comes from the “Corporate Benefits Departments: Staffing” survey of 231 HR and benefits professionals conducted by the International Foundation of Employee Benefit Plans (IFEBP). Companies ranged in size from fewer than 50 to more than 100,000 employees, with many respondents coming from the health care, manufacturing, professional services and technology industries.
Top challenges
Survey respondents said the following are their most significant benefits challenges:
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Increasing health care costs: 50%
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Absence and disability management: 39%
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Compliance with benefits-related laws and regulations: 31%
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Employee engagement with benefits: 30%
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Benefits communications: 25%
Other common challenges include benefits administration, vendor management, strategic benefits planning and low rates of health care literacy among employees.
Staffing
Staffing trends reveal another obstacle facing benefits professionals. Respondents said their responsibilities are outpacing the HR and benefits personnel needed to keep up.
Understaffed departments speak to the complexity of employee benefits. Over the past five years, only about 17% of organizations decreased their benefits staff. About 45% stayed the same, and 38% increased their staff. Even still, respondents noted staffing is not keeping pace with required duties.
A potential issue is lack of tenure. According to the news site HR Dive, more than 45% of HR employees have been in their current role for two years or less. Additional training and support could give employees greater understanding, knowledge and ability to tackle their HR and benefits duties.
Outsourcing
One outcome of understaffing is an increase in outsourcing. Over the past five years, 35% of organizations have increased their outsourcing of benefits services. Just 4% have decreased these efforts.
According to the IFEBP, companies outsource an average of 40% of benefits functions. The benefits most frequently outsourced are:
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Employee assistance programs: 80%
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COBRA administration: 79%
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Pharmacy benefits administration: 75%
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Flexible spending accounts: 75%
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Retirement benefit management/payments: 59%
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Health savings account administration: 54%
Additional services regularly outsourced include nondiscrimination testing, investment oversight, voluntary benefits administration and disability administration.
Organizations decide to outsource for the following reasons:
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Additional expertise: 79%
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Risk management: 62%
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Challenges with emerging technologies such as artificial intelligence and data analytics: 52%
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Costs associated with benefits management: 36%
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Lack of benefits staff: 21%
The most common in-house benefits functions are open enrollment, benefits communication and education, and FMLA administration.
Some organizations also combine in-house efforts with outsourcing. This solution is most commonly used for benefits strategy and design, reporting and disclosure requirements, and retirement plan administration.
Find trusted resources
Your benefits adviser is here to support you as the world of employee benefits continues to grow in scope and complexity. They can help you with top challenges such as strategic benefits planning, administration and vendor management. They can also connect you to trusted resources for benefits communication, education and outsourcing.
