Offering competitive employee benefits shows your people you are invested in not only their health and well-being but their future. A solid benefits package also helps you when it comes to attracting, recruiting, and retaining top talent.
You probably know this already. Yet, if you’re a small to mid-sized business leader, the dilemma is not about understanding the importance of employee benefits, it’s about how to afford them.
For an increasing number of companies struggling with this challenge, the solution lies in outsourcing benefits to a professional employer organization (PEO) or similar partner. Here are three reasons why this is such a solid business decision:
Three Reasons Companies Outsource Their Employee Benefits
By outsourcing, you can offer better benefits.
As reported by the Society for Human Resource Management (SHRM) and numerous other industry sources, providing quality health insurance to your employees is a critical feature in keeping them at your company. Working with a PEO enables you to provide Fortune-500 level benefits at affordable prices. Here’s how:
- Insurance companies base premium costs on risk. The smaller the number of people in a risk pool, the larger the financial risk to the insurer. This drives premium costs up. But when you partner with a PEO, your PEO becomes your staff’s employer of record. The PEO combines employees from all its client companies together, thus lowering the risk pool. The end result is high-quality healthcare options for you and your employees, at a reduced expense.
- PEOs open the door to other reasonably-priced benefit options as well, including 401(k) and retirement plans and dental, vision, life insurance, and short and long-term disability coverage among them.
Outsourcing helps you streamline talent management processes.
Partnering with an outsourcing firm that’s experienced in benefits administration not only brings ways to decrease costs but also helps you streamline HR processes. This is extremely beneficial if your current staff is busy managing other critical responsibilities – or if you don’t have an in-house department.
- Outsourcing removes the manual work of having to research and negotiate with carriers, manage enrollment processes, resolve disputes, provide training and education, or handle employee communications around benefits and other HR issues.
When you outsource benefits administration, you shield yourself from liability.
By outsourcing benefits administration, you shift the liability from yourself to your outsourcing partner. This helps protect your business in the event of a lawsuit, as the decision-making power for who can claim what and what gets denied is put at arm’s length.
- Such a relationship also provides protection when mistakes are made – because the burden lies with the outsource company.
Ready to Outsource Your Employee Benefits? Key HR Can Help!
Key HR partners with leading PEOs and other preferred providers – all committed to helping you establish the best, most effective, and competitive benefits packages for everyone in your workforce. We offer access to more service providers than any other business of our kind – and by working with us, you can realize bottom-line savings from 20 to 40 percent, while more efficiently managing any or all of your talent management functions. Read our related posts or contact us today to learn more.
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- On July 28, 2021
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