Absence and Disease Management Drive Growth in North American Benefits Administration Market
by Katharina Grimme
The market for benefits administration in North America is well-established and mature, especially in pensions administration, which accounts for about half of its size. But there are still significant growth opportunities driven by organizations' need to reduce and control healthcare administration costs, and provide value-added services (such as healthcare information or decision support tools) to employees.
NelsonHall's latest HR Outsourcing study provides a comprehensive assessment of Benefits Administration services in North America, and contains key recommendations for vendors addressing this market. The study identifies the North American market to grow by an average of 10% p.a. to reach $18 Bn by 2011.
Key findings from the study include the following:
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With talent management a key issue for HR departments, benefits administration vendors need to be able to assist organizations in making benefits a key method for instilling loyalty within the workforce
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With the continuing trend towards consumer-directed healthcare (CDH), clients are increasingly looking to provide more decision-power, choice and flexibility for employees. Vendors have to be able to support organizations through provision of appropriate services, e.g. HRA, HSA and related technology, such as self-service tools, workflow tools and multi-channel service delivery
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The ability to integrate all contact channels across all plans, e.g. self-service, call center, etc. effectively into the employee benefits cycle, and also tying these channels to employee life events is a key success factor for pensions administration vendors
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Absence management and disease management offer significant opportunities for vendors to innovate and differentiate offerings. Specialist skills for such services (e.g. leave analytics, medical case management) are typically developed in-house or through acquisition
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Offshore delivery for benefits administration services is very low at 5% and limited to back-office processing and data management. Even by 2011, offshore services will only account for 10% of total benefits admin services.
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Technology continues to be a key enabler within benefits administration services and 70% of vendors utilize, and continue to invest in, proprietary benefits administration platforms
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Acquisitions and partnerships are common as service providers look to build capability and expand market share
The study, based on in-depth research of user requirements and vendor offerings, addresses topics such as:
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Benefits adminstration issues and challenges faced by user organizations,
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Usage of benefits administration outsourcing and growth trends for different types of services
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Key vendor offerings and targeting
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Trends in offshore delivery of benefits administration services
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Relative vendor positioning for key capabilities
The report is written to assist both executives researching vendor capabilities before making purchasing decisions and also market managers developing strategies to target segments of the North American benefits administration market.
The study, entitled 'Targeting Benefits Administration in North America' is published within NelsonHall's HR Outsourcing subscription program, and is also available for separate purchase. For more information, contact Paul Connolly or Rob Hughes.