How Benefits Administration Can Help Your SMB

What is benefits administration?

Many employers offer employee benefits packages to help meet employees’ needs while staying within a budget. Benefits administration is a streamlined management process that creates, implements and updates a business’s employee benefits. Benefits administration usually involves dedicated personnel and software. 

• Benefits administrators: A benefits administrator is typically an HR team member or an individual who handles HR functions. 
• Benefits administration software: Benefits administration software is a digital platform HR team members use to handle a company’s benefits package. Benefits administration software also helps employees learn about and select the various program options available during the open enrollment period, such as health insurance and retirement plans. 

What is the importance of benefits administration?

A good employee benefits package can be crucial for your business. Excellent employees will be drawn to your company, and you can be assured you’re paying reasonable prices to provide their benefits. 

Benefits administration can help with employee retention. 

If your competitors’ offerings outshine yours, you’ll have a harder time attracting and retaining top talent. Your best employees may consider jumping ship for better opportunities. However, excellent benefits administration practices can help you stay competitive. 

“Benefits administration plays a vital role in securing and delivering the rightful benefits to the workforce,” explained Daniel Carter, founder of ZippyElectrics. “It somehow plays as the ‘written law’ of the company when it comes to employee benefits. With the right benefits administration, [your employees] can expect that [they] would be compensated by the company during and after years of service.”

Benefits administration ensures lower costs.

Excellent benefits administration can also help your company cut business expenses. Benefits like health, vision and dental insurance can be expensive. For example, according to the Society for Human Resource Management, the average worker pays more than $5,500 each year for family health insurance. And while healthcare should be a significant part of your benefits package, you’ll likely include other perks as well.

When you have an employee or HR team dedicated to managing your company’s benefits package, you can rest easy knowing you and your employees will enjoy the best deals. 

Through benefits administration, your company can create a benefits plan that fits your employees’ needs and allows future employees to enroll easily while meeting your small business budget.

When should you consider benefits administration software?

Software provides additional benefits administration assistance. Here are some scenarios where software can help. 

Consider benefits administration software when your business grows.

Software will help when managing your company’s benefits package becomes too unwieldy.

When you first start a business, you likely have only a handful of employees. With such a small staff, managing your benefits offerings is easy.

“In a true small business of less than 25 employees in one location, it’s my opinion that benefits administration software is nice but not necessary,” shared Jim Edholm, founder of Business Benefits Inc. “That’s a tiny enough universe to allow one-on-one communication about benefits, [and] turnover is insignificant enough to not be a burden.”

However, as your business grows and becomes more complex, the person handling benefits administration will need help, and software can be a valuable tool. Edholm noted that companies with approximately 50 to 200 employees typically have at least one HR person and an assistant on staff. HR staff will have myriad functions and may need help with benefits administration. 

Consider benefits administration software to get new hires up to speed.

Businesses also may need additional benefits administration assistance to get new hires up to speed. This is particularly true if your business experiences employee turnover or rapid growth.

“Turnover most likely means one to three new hires occurring midyear on a regular basis,” Edholm explained. “Therefore, assuring that every new employee gets the full introduction to the benefits, the policies, the support that is available becomes an important task. In that case, ben[efits] admin software is a godsend.”

What are the crucial features of benefits administration software?

The right benefits administration software can put your HR team in the best position to serve your employees. When you’re selecting benefits administration software, look for the following:

• An intuitive system: Benefits administration software must be easy to use. Find a solution that users can easily understand and navigate on a desktop computer or mobile device. This ease of use will help your administrators do their job and ensure your employees get the information they need.
• Automated functions: Modern software automates some of the more mundane and repetitive aspects of benefits administration. By streamlining the process even further, you can ensure your benefits serve your employees while freeing up more time for your benefits administrator to handle the rest of their responsibilities.
• Software integrations: You likely rely on a wide range of business software to manage operations. For example, you may use the best payroll software and the best time and attendance software. Look for benefits administration software that integrates with your current solutions to maximize your benefits data. 
• Compliance: Federal regulations and labor laws require businesses to provide specific benefits to employees. For example, the Family and Medical Leave Act requires businesses to provide employees with the time they need to deal with emergencies. A good benefits administration package helps manage issues as they arise.

What are the best benefits administration providers?

When choosing a PEO to help with benefits administration, find a solution that fits your business’s unique needs and budget. If you’re seeking outside help for benefits administration, consider the following top-rated PEO services and platforms. 

• Justworks: Justworks offers a comprehensive PEO platform with an intuitive dashboard. The company offers 24/7 customer service. Partners gain access to essential features like self-service employee onboarding, document storage, payroll processing, payroll tax filing, reporting and HR compliance assistance. Read our in-depth Justworks review to learn more.
• Rippling PEO: With its flexibility, seamless onboarding and robust features, Rippling PEO is a great choice for growing businesses. The company provides access to a wide range of benefits and on-demand support that many growing businesses can’t offer on their own. And, if your business outgrows the need for PEO, you can seamlessly transition to Rippling’s stand-alone HR platform. To learn more, check out our complete Rippling PEO review.
• TriNet PEO: TriNet’s proprietary PEO platform offers transparent pricing and customizable plans. TriNet can provide experts in payroll, HR, benefits and more. But what really makes the company stand out is its industry-specific tools and support teams. This targeted assistance is one of TriNet’s most notable features. Our TriNet PEO review explains additional features. 
• ADP TotalSource: ADP TotalSource services all business sizes and offers high-level benefits options smaller businesses often can’t access. ADP TotalSource offers experts in every area – from HR to payroll. The provider is an excellent choice for those who want expert advice combined with a strong tech platform and simple employee self-service. For more information, check out our ADP TotalSource review.
• Paychex Oasis PEO: Paychex Oasis PEO is an excellent choice for startups due to its flexibility for different industries and company sizes. Paychex requires a minimum of only five employees to be eligible for PEO services. It offers bundled services – from employee training to HR administration. Additional features, like workers’ compensation policies, can be added. Learn about more features and functionality by reading our in-depth Oasis review.
• Insperity PEO: Insperity is a top choice for those concerned about risk management. In addition to traditional PEO services, the company offers legal compliance and risk reduction tools. Insperity is accredited by the Employer Services Assurance Corp. (ESAC) and is certified by the IRS. Insperity offers flexible options for small business owners, including a-la-carte services. Read our Insperity PEO review for more information.

Benefits administration providers can help support your business goals

Proper benefits administration is critical to help you attract and retain talent, stay on budget, and minimize business risk. Numerous PEO service providers for small and growing businesses can help. Consider your current needs and future goals to select the right one for your business. 

Casey Conway contributed to this article. Source interviews were conducted for a previous version of this article.