Employee benefits administration is the process of establishing and managing the various benefits an organization offers its employees in a total compensation package.
Benefits administrators within an HR department are typically responsible for benefits administration. Benefits administration generally involves:
- Reviewing and selecting benefits options
- Communicating with benefits vendors
- Educating employees about their benefits
- Helping employees enroll in programs
- Providing ongoing support related to employee benefits
What is global employee benefits administration?
Global employee benefits administration refers to distributing and managing global employee benefits for a distributed workforce. International employers with talent in multiple locations and countries offer global benefits packages that include market-specific base pay, variable pay, employee benefits, and additional employee perks to attract and retain international talent.
Benefits regulations differ from country to country, so global employee benefits administration involves ensuring compliance with local labor laws and statutory benefits requirements and administering and managing compliant global benefits accordingly.
Read more: How to Maintain Compliance When Hiring Internationally
Common employee benefits
Employee benefits vary depending on local laws, company budget and policy, and the types of benefits employees expect in their particular location.
In addition to an employee’s regular wage or salary, local laws require certain statutory benefits that employers must offer their employees, which vary by jurisdiction. Employers should also provide supplemental benefits to attract and retain talent and remain competitive globally.
For example, health insurance is a statutory benefit in many countries; however, it is not a statutory benefit in the U.S. As a result, many U.S. companies offer employer-provided health insurance to their employees as part of a comprehensive and competitive benefits package.
While compensation packages look different worldwide, some examples of common benefits include the following:
- Health insurance. Health insurance covers everything from routine doctor’s appointments and prescriptions to hospital visits and major surgeries.
- Retirement benefits. Typical retirement benefits include pension plans or employer contributions to country-specific retirement programs.
- Annual leave. Paid time off and annual leave policies provide employees time away from work for illness, vacation, and other personal reasons.
- Parental leave. Parental leave offers time off for employees as they navigate pregnancies and take care of newborn or adopted children.
- Dental and vision insurance. Employers may include dental and vision insurance in their general health insurance packages or as standalone plans.
- Life and accident insurance. Life and accidental death and dismemberment (AD&D) plans offer protection for an employee’s family in the case of unforeseen events.
- Education benefits. Some employers offer to pay for their employees’ continuing education or reimburse them for student loan debt.
- Additional perks and allowances. Employers may provide allowances for special privileges such as travel expenses, housing, professional development, or health and wellness opportunities.
What is the importance of effective benefits administration?
Effective benefits administration offers employers a competitive advantage in attracting, hiring, and retaining top talent. Prospective employees seek a complete benefits package that addresses their needs and supports work-life balance. Employers administering attractive employee benefits gain a competitive hiring edge in the market.
Proper benefits administration also fosters a healthy work environment and a happy workforce. When employees receive comprehensive benefits that meet their needs, they feel valued and appreciated, which results in higher productivity, engagement, satisfaction, and job loyalty.
Effective benefits administration also helps employers ensure their benefits packages are competitive and fair regardless of their employees’ locations. This equity and inclusion is especially critical for distributed workforces where benefits vary significantly from country to country.
Read more: Top 10 Countries For Employee Benefits
What is the role of a benefits administrator?
A benefits administrator manages the benefits administration process. A benefits administrator is typically a member or team within the HR department responsible for developing, issuing, and managing the organization’s benefits program.
The benefits administrator should understand employee needs and the company’s resources to meet those needs. They should also be knowledgeable about local regulations and guidelines for employee benefits.
What are the key aspects of employee benefits administration?
Some critical aspects of employee benefits administration include the following:
Benefit plan design
Employers work with benefits administrators to decide on the benefits they want to offer in their compensation packages and establish a benefits plan. Designing the plan involves researching benefits options, determining the scope, deciding employee eligibility criteria, and selecting coverage levels for each benefit.
Enrollment and communication
Employees must understand their benefits options and have the opportunity to enroll in the various benefits opportunities. Benefits administrators inform employees of their available benefits and communicate information about enrollment periods and the steps employees must take to sign up for or change their benefits selections.
Record-keeping
Benefits administrators must maintain accurate records of employee benefits, contributions, and other benefits information. Familiarity with relevant software and technology helps organize total compensation and benefits information. Keeping a comprehensive record is crucial for addressing employee queries, auditing, and maintaining compliance.
Compliance
One of the most critical aspects of benefits administration is maintaining compliance with the legal requirements of employee benefits. Employee benefits are subject to various local and country-specific laws and regulations. Benefits administrators must understand legal requirements and ensure compliance with the statutory requirements.
Claims processing
Benefits administration often involves handling the processing of employee claims, such as medical expenses for health insurance. Benefits administrators ensure accurate and prompt payment for eligible employee claims.
Vendor management
Companies often work with external vendors to provide specific benefits for their employees. Benefit administrators communicate with third-party vendors, manage the various contracts, and ensure the smooth distribution of benefits.
Employee education and support
Benefits administrators must understand and be able to explain complicated benefits concepts to employees to help them understand their benefits. Administrators also guide employees on plan options and assist with any issues or questions.
Cost management
Benefits administrators must manage company costs effectively to fit the overall business strategy. Benefits administration involves negotiating with benefit providers, exploring alternative options, and matching realistic benefits to the market and budget.
Open enrollment
Benefits administration also includes coordinating and communicating open enrollment details, the annual period during which employees can change their benefit elections. Benefits administrators ensure that employees have the information they need to make informed decisions and necessary changes to their benefits.
How to administer benefits to a distributed workforce
Benefits administration plays a crucial role in attracting and retaining talent—an effective benefits plan promotes employee well-being, fosters a positive work culture, and ensures compliance with local labor laws.
However, delivering a comprehensive and compliant benefits plan takes time, research, expertise, and due diligence, especially for a global business with a distributed workforce. Consider partnering with a global benefits expert like Velocity Global to simplify global employee benefits.
With Velocity Global’s industry-leading Global Benefits solution, we make it easy for companies to offer competitive compensation packages to their employees, regardless of location. We remove the burden of benefits administration and compliance, so you can focus on delivering comprehensive support to your distributed team and maintain a competitive edge.
Contact Velocity Global to learn how our Global Benefits solution helps you give your global employees the benefits they deserve.
