Benefits Administration Outsourcing

With companies being faced with rising health care costs , more employers are outsourcing benefits administration to reduce costs, improve productivity and increase flexibility. Outsourcing allows an employer to contract a business function, either domestically or offshore, primarily to save money. Companies are able to put more capital directly into revenue-producing activities. Furthermore, outsourcing allows the company to save on hiring, training, and eliminate potential problems with temporary workers. Contractors can start projects more quickly without the need to train employees (AllBusiness). Some possible outsourcing solutions include employee call center, carrier billing, invoice reconciliation, enrollment support, fulfillment services, COBRA, HIPAA and flexible spending account administration. When companies have their benefits administration handled for them, they can focus on making money for the company.

                                                   
Benefits outsourcing is not without concerns, however. The major concerns are the loss of American jobs to offshore contractors and dealing with foreign representatives who can relate very little to the employee. Off shore service centers are able to pay lower wages in developing nations, which reduces the cost of the service to the employer. Some of us who work for global companies know that when we call HR, we speak to someone stationed in India or another foreign country. My company recently closed our HR service center in Michigan and joined hands with the HR center in Canada. As the HR representative for my plant, I know that many employees are unhappy dealing with representatives with heavy French accents and names they did not know. Furthermore, when employees call the service center for our 401K financial company, they are frustrated dealing with representatives from India and using a call center that requires them to "press 1 for English" or "enter your ID number and press pound." Perhaps this "old school" mentality will shift towards acceptance of outsourcing as business is constantly evolving towards globalization in our world today.

Articles referenced: http://www.allbusiness.com/human-resources/workforce-management-hiring/1084-1.html
http://www.shrm.org/hrdisciplines/benefits/Articles/Pages/OutsourcingForecast.aspx
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