Managing employee benefits programs is more challenging than ever, as benefits increase in complexity and employee engagement is critical. The right technology platform is a key component for efficiently deploying employee benefits programs.
There are countless software providers who help organizations administer their employee benefits programs. Called various things such as benefits administration systems, benefit enrollment platforms, benefits administration software, benefits enrollment technology, or just simply benadmin, there are tons of great options out there to help you streamline your employee benefits delivery. But how do you choose a partner? Note, for simplicity, we're going to refer to this technology as "benadmin" throughout.
The benefits administration software buying process can be complicated and time-consuming, but the choosing the right benadmin software vendor can transform how you manage your employee benefits programs, providing tangible improvements for the business and its employees. Check out our tips for project success!
It's tempting to dive headfirst into demos and pricing proposals, and you certainly can if you want to get a feel for what's out there. However, it's really important to spend time thinking about and documenting how you're administering your employee benefits programs today, and how you'd like to do so differently tomorrow. The amount of time you spend preparing has a direct correlation to the ultimate success of your new vendor.
✅ Map out your timeline. Rushed vendor selection processes rarely become successful implementations and deployments. Ensure you're allowing adequate time for the project. Understand your internal processes - is there a strict procurement procedure or a lengthy contract review process to consider? It is very common for a company to take several months to review and evaluate vendors before making a decision. Tip - try to align your "go-live" off-cycle from your annual enrollment. It's better to roll out new technology mid year, and try out on your new hires and life event changes rather than on your entire population. This will give you time to get comfortable with your new processes and catch any issues that were missed during testing.
✅ Inventory and document your current benefits programs and how they're deployed. Are all employees offered the same benefits at the same cost, or do you have different plans and/or contribution structures? How many insurance carriers do you have? What are the demographics of your workforce?
✅ List your current processes. Include those supported by technology and those that are manual. Identify what is working well and what needs changing - don't try to slap technology on top of inefficient processes and expect improvement. Use new technology as a chance to change your current way of doing things. Are there any obvious areas to streamline?
✅ Identify what technology is in place today. Understand your current vendor's contract and termination provisions, including notification requirements and your access rights to your data. If you need your new benadmin software to integrate with another technology such as a payroll or HCM system, understand the requirements and if there are any preferred partnerships in place.
✅ Figure out priorities for key teammates: IT, finance, C-suite, payroll, legal, managers, employees, etc. You may consider including some of these colleagues in the entire evaluation process, or invite them to key pieces, but at minimum you need to understand their objectives and keep them in mind throughout. This will help build your business case and ensure successful adoption across the company.
✅ Plan for the future. You'll likely have your new benadmin system in place for the next 5-7 years; what are your 5-7 year company goals? Don't just buy technology to solve today's problems. Are there any big mergers, acquisitions or divestitures on the horizon? Do you plan to double in size? Are you trying to focus more on engaging your employees? Do you want to expand your benefits offering? Document your desired future-state and keep it top-of-mind as you begin evaluation vendor options.
✅ Determine appropriate vendors for your size and complexity. If you don't know where to begin, visit some HR and benefits trade shows and talk with the vendors who have booths there. Find a vendor you like? Ask who their key competitors are. Network with peers of similar size and needs to you. Browse HR and benefits blogs and publications. Take advantage of vendors who host free webinars and onsite learning events. Have preliminary demos or conversations with vendors who intrigue you to get a feel for what's out there.
Now you're prepared and have a list of your must-have requirements as well as a "wish list" of things you would like but can live without. You've also identified vendors with whom you'd like to dig a little deeper. Time to meet with the vendors! Keep the following in mind as you're evaluating options:
✅ Keep your requirements top-of-mind throughout this phase. Depending on the complexity of your requirements identified in the previous section, you may want to request that the vendors provide written responses to how they can or can't meet them. This will help you better compare options and how they meet your needs.
✅ Assess risk including the vendors' security protocols, financial attributes and business characteristics. It's easy to be impressed by innovative and flashy technology, but make sure the company has a strong foundation. You should understand their security protocols, integration capabilities, company culture, market reputation and behavior, business maturity, service methodology, funding and more.
✅ Solicit pricing from the vendors. They'll need things like number of benefits-eligible employees, number of insurance carriers and plans offered, differences in plan offerings or contributions based on location, class or other factor and needed integrations with your other HR software. Expect to pay in the neighborhood of $3-$6 per employee per month (PEPM) for most standalone benadmin software (meaning software that is not bundled along with your payroll, HRIS or other HR technology solution). Most vendors also charge implementation fees, which can easily be 10-20% of the annual PEPM spend. You may pay extra for integrations with your other HR systems or insurance carrier data feeds. Depending on the vendor, there are a plethora of other possible add-on solutions; things like COBRA administration, an employee call-center, ACA tracking and reporting and decision support tools often come at an extra cost, if offered. If you're not sure of everything you need/want - don't worry! You'll become savvier as you go through this process, and vendors are happy to revise their proposals as you hone in on your needs.
✅ Schedule & score demos and don't let one flashy demo decide your fate. Is the system visually appealing and easy to navigate? Does the sales team have thorough technical and product knowledge? Is it a "canned" demo or is it tailored to your needs? Make sure you tell the vendor candidates your key areas of concern ahead of time so they can spend time reviewing that functionality. Keep your list of requirements handy so you can review and even score the vendor demos against your list of needs. It's easy to get caught up in the "wow" factor of some of these technologies but ensure you stay focused on your requirements, lest you end up with a technology system that provides a lot of flash but no substance.
✅ Know you're not "buying" the sales team. Most of these vendors are pros at the sales process! They have personable sales and sales support staff who are proficient at "wow-ing" you with a stellar demo of the system. Be sure to remember that the sales team typically isn't around after the sale; it simply isn't their job. Understand the post-sale hand-off and the team you'll be working with on an ongoing basis.
✅ Ensure a level playing field. Give equal time to all vendor candidates for discussions and demos. Provide all of the vendors with the same set of information, but be sure to notice who is asking the smart questions - this is indicative of a good partner. A savvy vendor is going to ask a lot of questions to better understand your needs and demonstrate how their technology can meet them.
✅ Listen to the vendors when they tell you what their best practices are and be wary of vendors who say "yes" to every question. Remember - benadmin software is usually configurable but not customizable. This means that vendors have a certain amount of leeway within their programming to configure their technology to meet your needs, but it's fully customizable and not built specifically for your rules. If a vendor can't configure their technology for your needs, they may offer a "workaround." Be wary of this and try to identify any workarounds up-front. Workarounds = manual processes, and manual processes = more room for error. Certainly, some vendors are more flexible than others, but if most or all of the vendors are telling you your needs are outside of their best practices, you may want to consider changing your rules rather than trying to force them into technology that can't naturally support them.
✅ Check references. Your vendor candidates should be able to offer you at least a couple of references of a similar-sized company within your industry. Try to secure feedback outside of references provided by your vendor as well - after all, they're only going to provide references from companies whom they feel will speak highly of them.
✅ Don't be afraid to have several meetings and demos with your key vendor candidates. You may have started this phase with 5-10 vendor options, and have narrowed it down to 2 or 3 favorites. Spend a lot of time with these finalists, ensuring you're comfortable with the technology, support and timeline.
Phew! You've gone through a thorough discovery and shopping process and you're ready to move forward with a decision! Congratulations! Key milestones here include:
✅ Notify your winning and losing vendor candidates. Of course you're going to notify the vendor to whom you've awarded your business, but be sure to also take time to provide feedback to the vendor candidates who didn't win your business. They have invested time and resources into your project, and hearing a bit of detail around the decision is a good practice and will only help them become better.
✅ Finalize pricing as your requirements and list of needs may have been fine-tuned during the selection process and may necessitate revised pricing from your chosen vendor. Be sure you understand the pricing and when additional fees may be charged. To be safe, budget 20% more than what you think your annual spend will be. Pricing is almost always negotiable, but this is most certainly a case of "you get what you pay for."
✅ Review and negotiate contract and be sure to include your attorney(s). The contract is the framework for your relationship with your new vendor partner and outlines the delivery and functionality of the system being provided. The contract should account for things like security provisions, implementation obligations, payment terms, data protection, exit terms, updates, upgrades, length of contract, ownership of data, service level agreements (SLAs), liabilities and more. Don't hastily sign a contract just to move the project forward. Contracting can easily take a month and don't be surprised if it takes longer.
✅ Plan for your implementation. Implementation timelines for benadmin software typically range from 6-12 weeks depending on the complexity of the project. Add a few weeks to whatever your vendor tells you their standard timeline is. Review and meet with key internal stakeholders who will be involved in the implementation project. Gather all of your relevant documents. Notify your insurance carriers and understand any limitations they have. Understand this is a time commitment for you and your team, not just the vendor.
You may feel like it's been a long road to get to this place, but the truth is the hard work is just beginning! A deliberate, collaborative implementation process is critical to a successful project. It's really hard to turn around a bad implementation. These steps will help things stay on track:
✅ Define what "go-live" means to you and your vendor. Does it mean that the system has been thoroughly tested? Have carrier connections been established and tested? Is the payroll integration set up? "Go-live means different things to different vendors, so understand what it means to your vendor early-on, to save yourself from surprises later.
✅ Be a good partner and understand implementation is shared responsibility and the success of the project does not rest squarely on the shoulders of your chosen vendor. Provide complete and accurate information on time, and understand that if you miss a deadline, it will impact the overall timeline. Participate in the scheduled calls. If you feel there is an issue, raise you concern early. Designate appropriate time and resources to the projects. Attend all of the calls and trainings. Spend a lot of time testing the system.
✅ Accept that things will go wrong. No technology implementation is without issue, and prepare for problems to pop up during implementation and beyond. Have a realistic expectations and goals. Understand what issues are critical (i.e. an employee being shown the correct contribution amounts) and which issues are less of a priority.
✅ Prepare for your new way of working and prepare your employees too. Your work isn't done at "go live" - it's just beginning. Remember all of the things you envisioned for your desired future state of working and for your company - you now have technology to support that! Acknowledge that you will have to adopt a new way of working and let go of some old processes. And remember that change is hard for everyone - your employees, your colleagues in payroll or the C-suite - even when the change will ultimately be an improvement to previous ways of doing things. Early communication is key, highlighting the efficiencies that will be gained and reasons behind the change.
As the employee benefits landscape continues to increase in complexity and employees are expecting consumer-level technologies in the workplace, the right benadmin software is critical to administering employee benefits programs effectively. Our biggest takeaway for you is to TAKE YOUR TIME AND BE THOROUGH. I have never seen a rushed selection and implementation process result in success. A thoughtful, planned process is the best way to make your benadmin software dreams come true.