One of the most thankless tasks a benefits or HR manager faces is plan administration.  Recordkeeping consumes a great deal of time and energy.  Though an essential function, administration takes up resources much greater than the real value it adds to an organization.  From an objective perspective, most employers would be better off outsourcing plan administration — freeing up internal resources for more worthwhile endeavors.  Wouldn't they?

Not necessarily.  Outsourcing isn't free.  And, though recordkeeping is drudge work, it's performed by your own people, which means the cost is measured in "soft dollars."  That's much better than dishing out cash to an outsourcer, isn't it?

Perhaps.

The problem is — no one really knows for sure.  In most cases, the true costs of plan administration are hard to measure.  As a result, choosing between internal recordkeeping and outsourcing is as difficult as comparing, well, apples and oranges.

Until now.

Introducing The SelectSource Savings Calculator
One of our favorite clients, SelectSource, recently asked us to help create a tool for assessing administrative approaches.  The goal was to develop a way to quantify the real cost of internal recordkeeping — and, by extension, measuring it against the cost of outsourcing.

The challenge seemed like a win/win proposition.  A "level playing field" would let employers evaluate the economic impact, whether positive or negative, of outsourcing — in scenarios specific to their business situation.  Finally: a way to make an informed decision about benefit and HR recordkeeping, based on measurable outcomes.

The result of these efforts is the new SelectSource Savings Calculator. 

Here's what the interactive platform will allow the user to do:

• Input user-specific information, like number of employees, turnover rates, COBRA, plan invoice and data reconciliation, annual and new employee benefit enrollment, ongoing data management (e.g., life event changes, new addresses) — even time spent providing employees with answers to questions about benefits, eligibility, and other concerns.
  
  
• Compute the cost of continuing to administer programs internally — as well as that of setting up and maintaining an employee portal to outsource these services.  (Both scenarios reflect three-year projections to provide a realistic idea of ultimate expense levels.)
  
  
• Determine the "ROI" (return on investment) for moving from internal to external plan administration.

In the end, you'll get clear, practical information you can use to make objective, informed decisions about HR and benefit administration.

If, for example, the ROI for outsourcing is high enough, you may want to speak further with SelectSource about an employee portal for your company.  (The company also has robust resources for your HR and benefits staff, so they can do a better job with time they'd otherwise spend on plan administration.)  On the other hand, if the ROI seems too low, you can feel better, thanks to objective data, about continuing to manage plans in-house.

Either way, the SelectSource Savings Calculator is well worth your time.

Always Something Good at SelectSourceOne.com
The SelectSource Web site is a great source of information for employers and HR and benefit managers.  One of its sections, "Clients," provides links to such resources as a COBRA fact sheet, a benefits and HR glossary, and a comprehensive list of helpful HR, benefit, and health care sites.

The plan administration calculator is being fine-tuned and readied for posting.  Watch for more information, coming soon.

But don't let this testing stop you from exploring the SelectSource site now.  You'll find a lot of good things there, and may want to add the site, SelectSourceOne.com, to your "Favorites" file.