Employee Benefits Outsourcing Faces High Demand

The number of companies outsourcing their benefits functions is rising amid compliance concerns and rising healthcare costs. 

According to the Society for Human Resources Professionals (SHRM), about 48% of corporations outsource services to tap into more specialized expertise such as legal compliance. Others cite lower costs and reduction of liability for their decision of working with third parties. 

Outsourcing allows companies to dedicate their resources to their core business. Third-party vendors also offer superior benefits technology and focus on benefits programs. 

The latest SHRM analysis reported that an employer, on average, outsources 40% of its benefits functions. The top programs handled by third-party vendors are Employee Assistance Programs (EAPs), Flexible Spending Accounts (FSAs) and Benefits Continuation.