Benefits Administration Tools
Benefits administration platforms helps in reducing or eliminating the traditional paper works and helps in automating the employee enrollment, selection, health insurance, wellness, and all other benefits. This simplifies open enrollment and life event maintenance through automated eligibility processing and enhance the employee user experience through self service. This report focuses on providing insights on the benefit administration tools and the key market trends
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Benefits Administration Tools market report transcript
Global Market Outlook On Benefits Administration Tools
A benefits administration platform is a software system for managing workplace benefits, and this helps in reducing the administrative burden for organizations.
- Benefits administration platform helps in reducing or eliminating the traditional paper works and helps in automating the employee enrollment, selection, health insurance, wellness, and all other benefits
- This simplifies open enrollment and life event maintenance through automated eligibility processing and enhances the employee user experience through self service
- There are benefits platforms, which include other functions in HR, like time and attendance tracking, PTO, etc., as all these are necessary for benefits assessment
- Nowadays, a single platform that manages benefits and HR administration is used by many large organizations
BAO: Global Outlook
- Benefit administration market segment is expected to reach $711 million by 2020, compared with $568 million in 2015, at a CAGR of 7%.
- DC Arrangement Pension Scheme, Onsite Medical Assistance, and Private Medical Insurance have an adoption of nearly 50–60% among US employees in large Fortune 500 companies.
- The key activities outsourced in UK, France, and Germany are occupational healthcare administration, employee share scheme administration, flex plan administration, pension administration, and social security benefits admin.
- North America: Most matured BAO market and has about 40% of the global market share (USD 12 billion)
- In LATAM, Brazil and Mexico have the highest BAO adoption. Retirement, financial benefits are given more importance here.
- Europe is the second most mature market in the BAO industry. (31%) .The UK and Germany account for 40% of the European market.
- In APAC, Australia is most mature in BAO adoption, followed by India and China. Income protection plans, life insurance, and medical insurance are the major benefits in the Asian market.
Trends in BAO Market
Around 50% of employers are expanding their benefits web technology as a top strategy to address and manage the complexity of benefits effectively.
- There is an increase in demand to standardize processes, technology, and governance under benefits administration
- Employers are trying to identify solutions, which can fit benefits, payroll, and compliance on one single platform
- Employers are also trying to engage with brokers who have the technological capability or who can support them with a third party collaboration
- About 85 percent of brokers are expected to partner with a third-party provider to better support their clients' needs. Partners would be:
–Benefit administration providers
–Group general agencies
Vendors are bringing multiple functional areas into one platform via Cloud delivery (core HR, time and attendance, and payroll applications with benefits administration)
Technology Development and Offerings
Employers are rolling out different tools to mange their benefits and improve the employee engagement. Benefit enrollment tools and single sign-on logins have been implemented more in 2016 and 2017.
- One major challenges in the global benefit market is the disparity in local market practice, legislation, and taxation of benefits
- To overcome this, the latest trend is organizations are implementing both HR Shared Service (HRSS) center and a technology solution to run their benefits programs
About 60% of multinationals now have a defined, technology-enabled approach to global benefits. As a result, they have:
- Improvements in engagement, governance and administration
- Reduction in administration errors
- Reduction in overcharges from carriers for cover
- Increase in employee engagement by nearly 20%
Growth Drivers and Constraints
The growth of HR benefits and administration services market is largely driven by reforms and complexities in the healthcare sector, and the main challenge to the BAO market is to get a vendor that supports BAO and other core HR functionalities and also meet different regulatory requirements for different countries.
- Employers are providing self-service benefits platforms to employees through a user-friendly experience when they seek clarity about the benefit plans. Communication tools help understand benefit plans effectively
- Organizations are trying to centralize their benefits management and streamline the benefit process, also they are looking to integrate different functions onto one single platform, which would make the evaluation and assessment easier, transparent, and reduces costs
- Increase in demand for personalized communication services
- Growing regulatory stringency in different regions
- Technology advancements and tools
- Health reforms
- Increasing relevance of HR benefit functions within an organization, which connects to employee engagement, retention, etc.
There are few challenges when it comes to BAO services software:
- When switching over to benefits administration software, it can take several payroll cycles to customize and integrate the software with current paper-based systems
- When a product is accessible online, the company must make a concerted effort to educate employees about ways to protect their personal health information and report any suspicious login behavior
- Delayed or no decision-making within the prospect organization
- A desire to maintain the status quo (either in-house or with incumbent provider)
- Competing priorities within the prospect organization
- Tools, which can support different country regulation and different HR features