Being able to competently administer employee benefits is critical for any organization — and not just because it makes employees’ lives easier. HR, payroll, benefits brokers, and clients all have a stake in how efficiently and accurately benefits are tracked, calculated, and managed.
For HR and payroll leaders, having employee and benefits data in one place, such as in a human capital management (HCM) system, enables you to easily verify and update information as well as quickly make changes that impact benefits. HCM software also helps you identify employees who are no longer on benefits, saving your organization money by ensuring it’s not still paying for benefits when it shouldn’t be.
For brokers, it’s about adding value to your services by having direct access to your clients’ benefits information, preventing revenue loss for them, and ensuring they have the support and tools they need to administer benefits successfully.
No matter which team you’re on or what role you play, syncing benefits information with an HCM system is key. But if the data is out of sync, that’s when things become problematic. Here’s what happens:
Say you have a pipe somewhere in your home that’s leaking, but you’re not sure where the leak is coming from — or even that the leak is happening — because the pipe is hidden. The same scenario is applicable when it comes to employee benefits. With so many moving parts in a business, it’s easy to miss revenue leaks when you can’t see where the problem is or don’t know where to look for it. Revenue leakage happens in many events such as overpaying, not deducting enough for benefits, not keeping an accurate record of accruals, and more.
One of the most common forms of revenue leakage, however, is benefits leakage. Benefits leakage in particular is often the result of an employee event — such as a termination, promotion, retirement, or move — that stops or changes the employee’s benefits. If the event isn’t promptly and properly captured, you “leak” money by continuing to spend it on benefits for that employee. It’s estimated that 12-15% of all billing from benefits carriers contains errors, and error-prone invoice processes can lead to further losses or delays in capital.
When benefits information is synced up with your HCM software, updated data is constantly flowing between HR, payroll, brokers, and other stakeholders so everyone has the information they need. You know in real-time when an employee experiences a change in employment status or has some other qualifying event that affects their benefits, and can make necessary adjustments right away that prevent revenue leakage.
HR, payroll, and benefits data are interdependent in many ways. HR has important employee information that payroll needs to run their processes, and part of running payroll is knowing what the benefits deductions should be in each employee’s paycheck. If either department has wrong information, it can affect how benefits are calculated and create a host of other issues.
Inconsistent data is often the result when it’s housed across multiple platforms or systems. This makes data management far more complicated than it should be and opens up the possibility of errors and missing information. Poor data is an expensive problem, costing organizations an average of $12.9 million each year. It also takes an enormous amount of time to manually track down and update data. You end up wasting precious hours combing through multiple systems and time periods just to get the information you need.
With an HCM platform that keeps your HR, payroll, and benefits data synchronized in real-time, your people data stays accurate for all teams that need access to it. Since the data is stored and updated in a centralized database, this ensures that no matter who is accessing it, they’ll get the same up-to-date information as the next person and be able to run critical HR, payroll, and benefits processes accurately.
Client complaints & concerns
If you’re a broker, you’re in the business of providing high-quality service and advice to your clients. But when your clients are having issues with benefits, they often come straight to you, increasing phone call volume and taking time out of your day to deal with their concerns — making it more difficult for you to get important work done.
The problem often lies in the fact that your clients either don’t have updated HCM technology or the technology they do have lacks the right capabilities. And enrollment information, qualifying events, new hires, and other important details that aren’t integrated correctly between carriers and your clients only create more headaches. The large majority (84%) of benefits brokers understand how important it is that a carrier easily integrates with a client’s benefits enrollment system.
Modern HCM software benefits your clients in that it enables smooth electronic data interchange (EDI) with carriers, reducing the time spent on benefits administration and eliminating stress for everyone. With synced internal data, your clients can make payroll and benefits updates easily and on their own in a single system of record. Payroll and benefits calculations are also automated so that any change in an employee’s benefits is handled accurately every time. As a result, your clients lean on you less for administrative support, you experience fewer complaints, and you can focus more time on the most valuable aspects of your service.
It’s time to sync up
Benefits administration is a traditionally complex process, but making it easier for everyone involved — HR, payroll, brokers, and their clients — is possible. With integrated benefits management in a full HCM solution, everything is simplified — including employee enrollment — and the administrative burden is reduced.
Syncing benefits data with your HR software benefits you in a few important ways. It ensures that:
All employee, payroll, and benefits information is accurate and consistent
Any change in employee status is automatically captured and calculated
Your organization no longer has to lose revenue by paying for benefits it shouldn’t be
If you’re a broker, your clients can successfully handle benefits administration on their own
Ready to learn more about how to sync your benefits data with your HCM? We are here to support you with efficient, accurate, and cost-effective workforce management solutions that integrate your employee, payroll, and benefits data for effective benefits administration. To learn more about SyncHR, click here.
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