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Survey: Few Track Benefits System Admin Savings

By Staff Writer

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Some employers may have a tough time measuring whether group insurance computer systems really cut costs.

Researchers at the Aberdeen Group Inc., Boston, have published data supporting that hypothesis in a summary of an informal survey of 137 employers conducted with support from NuView Systems Inc., Wilmington, Mass., a company that sells human resources information systems.

When the researchers asked participating employers about their highest priorities for improving benefits management processes, “lowering benefits cost or rate of cost increases” ranked first, at 89%, and “lowering HR administrative burden” ranked second, at 66%.

“Improving talent attraction and retention” ranked only third, at 60%.

But only 13% of the participants use “HR administration costs as a percentage of total revenue” as a measure for assessing the effectiveness of benefits management systems, and only 10% track “HR administration costs as a percentage of total labor costs,” the researchers report.

The most commonly used effectiveness measure is “employer satisfaction with benefits,” at 45%, and the second most common measure is a general assessment of company contributions for benefits as a percentage of total benefits costs, the researchers report.