Benefits, Administration, Outsourcing, NelsonHall, Research

NelsonHall reveals findings of latest benefits administration outsourcing research

NelsonHall, the leading independent business process outsourcing (BPO) analyst firm, announced the availability of its latest research entitled "Targeting Benefits Administration." This report is a comprehensive assessment of global benefit administration outsourcing services.

John Willmott, CEO of NelsonHall, commented, "As
healthcare consumerism continues to rise, so does the level of complexity associated with benefits administration, and this complexity is further exacerbated by introduction of flexible benefits packages. The global benefits administration outsourcing market is set to grow across all geographies as companies seek to reduce costs while complying with emerging legislation and offering attractive benefits packages to their employees."

Key findings revealed in the NelsonHall research report include:

• An increasing emphasis on organizations, particularly large organizations with 10,000+ employees, seeking to bundle benefits administration services (TRO and TBO) to one vendor to increase connectivity between services and increase cost savings
  
  
• Benefits administration outsourcing is increasingly driven by the need to improve flexibility of benefit plans to recruit and retain talent within highly competitive environments
  
  
• Health and welfare administration, propelled by the move to consumer driven healthcare, is forecast to reach $9.4Bn by 2010
  
  
• The drive to consumer directed healthcare will increase offerings in HRA/HSA administration services, with some vendors partnering to gain access to these skills
  
  
• Providers in health & welfare are increasingly seeking to add analytical capabilities covering claims and utilization and "beyond benefits" services such as absence management and disease management to their portfolios
  
  
• Use of offshored delivery service, though low at present, will increase as vendors seek to find further cost savings, and larger organizations look for further ways to mitigate benefits costs
  
  
• Continued development of multi-channels for delivery of benefits services, including innovative use of multimedia for benefit communications, e.g. podcasting on investments, and coaching online
  
  
• Increasing use of "wrap-around" technologies to enable organizations to gain a more global view of benefits services in their organizations.

NelsonHall's research also supports the conclusion that increasingly complex legislation, particularly in the U.S., as well as increased merger and acquisition activity, globalization of business, and an aging workforce necessitates the need for organizations to take a more strategic view of benefits administration.

"Outsourcing enables companies to implement more complex benefits plans," said Willmott. "In addition to reducing administration costs, organizations are able to compete more effectively in recruiting and retaining talent in highly competitive environments.

"Companies are realizing that they do not have the expertise to administer complex consumer driven health plans and are looking to reap the benefits of working with a sole service provider," said Willmott. "Critical success factors in this market include the ability for vendors to offer costs savings, and an integrated technology and communications strategy." Given the rising costs of healthcare consumerism and the complex administration needed to improve the flexibility of benefits plans, NelsonHall forecasts that the outsourced benefits administration market (covering health and welfare and defined benefit and defined contribution pension plans) will almost double in size over the next five years to reach $22Bn.

NelsonHall's study addresses topics such as benefits administration issues and challenges faced by organizations, organization usage of external benefits administration services and the benefits sought from external benefits administration services as well as vendor selection criteria.

The "Targeting Benefits Administration" study is available now as part of NelsonHall's HR Outsourcing program. Information about this program is available by contacting the following NelsonHall representatives:

Matt Gennone: matt.gennone@nelson-hall.com or 617-520-6699
Paul Connolly: paul.connolly@nelson-hall.com or +44 (0) 870-770-5967