Using Self-Service Portals to Improve
Benefits Administration Efficiency
IndustryView | 2015
Many human resources (HR) software platforms feature an employee self-service (ESS) portal that allows workers to personally handle tasks related to their benefits administration. Effective use of these portals can save time and improve efficiency for HR staff. Software Advice surveyed HR employees who use software for benefits administration to help other users of this software understand how best to utilize ESS technology.
HR World, an industry-related editorial resource, estimates that HR departments spend up to 80 percent of their time on just two things: administration and paperwork. Benefits administration in particular is incredibly time-consuming for HR departments that handle the process in-house, as software vendor Lyceum reported in a 2012 survey.
Between communicating information to employees, performing data entry and correcting errors, HR departments often spend a large amount of time on tasks that are necessary, but not directly tied to revenue.
Software vendors have recognized the need to lighten the administrative load for HR employees with the introduction of employee self-service portals in HR and benefits administration platforms. ESS allows employees to look up information and complete tasks related to insurance, retirement funds and PTO themselves—freeing up the HR department to focus on other things.
Trish Stromberg, senior vice president of marketing at Infinisource, creator of the iSolved human capital management (HCM) software suite, says ESS has numerous benefits for HR departments.
An ESS portal centralizes employee records, reduces errors, streamlines processes, saves money and improves HR and employee relations. This provides more time for the HR professional to concentrate on workforce issues—hiring, onboarding and training, for example.Trish Stromberg, Infinisource
In order to find out how HR departments are using ESS, Software Advice surveyed more than 150 HR employees who use software for benefits administration purposes. The results, highlighted below, will help HR departments learn how to best utilize ESS for more streamlined benefits administration.
We first asked respondents who use ESS what processes related to benefits administration employees typically manage themselves, allowing them to select multiple options. The top uses are to enroll in insurance (health, dental, vision etc.) and to check allotted PTO, with each cited by 74 percent.
Having to answer questions and explain a variety of complex insurance options for employees can be a daunting task for HR departments. Compounding the problem is that insurance enrollment periods typically only last a few weeks to a few months, meaning that many employees in a large organization may need to enroll at once.
Insurance providers can explain their products on-site in group presentations, fairs or one-on-one meetings, but this involves event planning by the HR department. Moreover, due to rising travel expenses, many providers are hiring independent enrollers to explain their products for them. Because of their loose affiliation with the represented providers, training and quality assurance has become a concern with these enrollers.
Health insurance is complex, and there are a variety of options that may be afforded to each employee, as well as unique scenarios that may be involved. ESS is thus a great way for workers to learn about the plans offered and to select the options that work best for them, without requiring HR departments to invest a significant amount of time and resources.
Emily Rickel is the HR director at Medical Guardian, a medical alert system company that recently implemented the Zenefits software system to allow employees to enroll in insurance themselves. She says switching from a manual broker that required a lot of paperwork to Zenefits’ portal has been a time- and resource-saver.
The point of the portal is for employees to be able to enroll in their health benefits and to take control over their HR needs. It takes out the middleman, and it takes a lot off HR. It allows HR to manage more effectively and not have to manually gather paperwork. Putting responsibility in the employees’ hands saves time for myself, the employees and their boss.Emily Rickel, Medical Guardian
Open enrollment for health insurance in Zenefits
ESS can also help with simpler tasks. Allowing employees to check their allotted PTO and retirement plan information on their own, instead of having to ask HR, frees up more time for the department.
Our survey results also show that ESS is used more often to initially choose insurance and retirement options (an average of 64 percent) than to change them later (an average of 48 percent). Even though initial enrollment only happens once per employee, the time and information exchange needed to complete this process make ESS an ideal way to do so.
To find out where HR departments are gaining the greatest efficiencies through ESS, we next asked respondents whose companies use ESS how much time they save by allowing employees to perform certain tasks themselves.
Overall, a combined 89 percent of respondents say they save a “significant” (44 percent) or “moderate” (45 percent) amount of time on insurance-related tasks as a result. A combined 83 percent say the same about retirement-related tasks, and a total of 79 percent say this about PTO tasks.
These results show that, almost universally, HR departments see time-saving benefits with ESS. All respondents say they save some amount of time on insurance-related and PTO tasks because of it. Nearly all respondents say the same about retirement-related tasks: Only 2 percent of respondents say they save “no time” by allowing employees to complete tasks related to retirement funds through ESS.
Infinisource’s Stromberg says that ESS is important because anything related to insurance can be incredibly taxing on HR departments.
Insurance-related tasks are compounded with medical, dental, vision and optional benefits. This makes it a very time-intensive process when done manually. When you multiply that time by the number of employees, it's easy to see how an employee portal can have an immediate impact on HR departments.Trish Stromberg, Infinisource
Next, we opened our questioning to include HR employees whose companies don’t use ESS. We asked respondents to estimate what type of information related to benefits administration saves, or would save, their department the most time by giving employees the ability to look it up themselves. Nearly half (48 percent) say that giving employees access to information about insurance would accomplish this.
Interestingly, even though respondents whose companies use ESS say it is used more often for checking allotted PTO than checking insurance information (74 percent versus 66 percent), respondents estimate more time is saved by providing insurance information. HR departments looking to deploy ESS should thus consider providing insurance information to maximize the amount of time saved.
But providing information and allowing employees to complete tasks through ESS are two separate endeavors. For example, a company may provide benefits information through ESS, but employees may still have to go through HR to perform tasks such as requesting PTO. To dig deeper, we asked which specific task related to benefits administration respondents estimate they save (or would save) the most time on by allowing employees to complete the task themselves through a self-service portal.
The highest percentage of respondents (34 percent) cited allowing employees to complete PTO requests, followed by employees choosing insurance options (27 percent).
When comparing the responses of those who work for companies that use ESS and those who don’t, it’s interesting to note that both groups estimate requesting PTO saves (or would save) the most time. It seems that when HR departments utilize ESS, expectations align with reality.
Without ESS, PTO requests are often fielded by many players. The process usually involves an employee email sent to a manager, who runs the request by a corporate office or someone in HR. Once the request is approved (or denied), the manager or HR representative lets the employee know through another email.
The HR employee then has to log any time off for recordkeeping purposes. Even if this process takes just 15 minutes per employee request, with an average of 14.5 PTO requests per employee per year), this can amount to nearly three full-time weeks of work in a 30-employee office.
Time-off requests in iSolved’s ESS portal
With ESS software, employees can request PTO to be approved or denied by a manager, eliminating the need to write an email. Once approved, the request will automatically be sent to HR to be logged. The information can even be logged automatically upon approval, if HR departments use an HR suite with integrated payroll, time and attendance and benefits administration applications.
Using ESS to shave just five minutes off this process saves a 30-employee company’s HR department 36 hours of work (based on the average of 14.5 employee requests per year). That’s almost a full workweek that HR departments can devote to other needs.
It’s possible that, if some information provided to employees through ESS is too complicated or not explained sufficiently, employees will end up asking more questions of HR. This could lead to less efficient benefits administration.
To find out if this could be the case in certain scenarios, we asked respondents if there is any information related to benefits administration they think HR departments should look up for employees, instead of allowing them to look it up themselves through ESS. However, the largest percentage of respondents chose “none” (42 percent)—suggesting that all information should be made available through ESS for the most efficient results.
Medical Guardian’s Rickel says that employees should be able to access “any information at all times of the day.” And respondents agree—the more information employees can look up themselves, the better. It’s easy to see why this is the case when looking at how much time is wasted by HR departments looking up information for employees.
According to a survey by BambooHR, in which HR professionals chose the top tasks that take up their time, 71 percent said that employee management (which includes answering questions and resolving issues) consumes more of their time than any other task. Moreover, 48 percent of HR respondents in that survey said they should be doing less employee management.
By allowing employees to look up all relevant information themselves through ESS, HR departments can focus on other, more meaningful tasks. For example, according to the BambooHR survey, HR professionals would rather be focusing on professional development, training and overseeing company culture.
Rickel adds that ESS also allows for more employee accountability. Because all of the information is made available through ESS, employees can’t claim they didn’t know something.
“Before, I would have to go around and pick up their paperwork,” Rickel says. “Now, if they miss open enrollment, it’s all on them. There’s no excuse. Same thing with PTO. They can’t say they didn’t know how many days they had left.”
Ultimately, do those who utilize ESS find that their benefits administration is more efficient? Slightly so, according to our survey: 93 percent of respondents who use ESS describe their company’s benefits administration as “efficient,” compared to 88 of those who don’t.
A wider disparity exists in those who describe their company’s benefits administration as “extremely efficient” (19 percent of those who use ESS, versus 11 percent of those who don’t).
Though nearly nine out of 10 respondents still experience efficient benefits administration when using software without ESS, but it seems that self-service provides an extra boost. Other studies on ESS and HR automation—the process of moving paper-based HR tasks to software for managers and employees to manage themselves—highlight more of these efficiency gains.
According to HR outsourcing firm HR Works (in an article for the Rochester Business Journal), HR automation reduces HR cost by $9 per employee per month. Moreover, The Society for Human Resource Management (SHRM) Foundation reports that the HR headcount can be reduced by up to 25 percent when organizations implement ESS.
The benefits of ESS are plentiful, but this means nothing if the technology isn’t utilized in the first place. According to our survey, only about half (49 percent) of respondents who use software for benefits administration have an ESS portal, and use it. The rest say they have ESS and don’t use it, don’t have ESS at all or aren’t sure whether or not their software has ESS.
As expected, ESS seems to be more of a pressing need for larger businesses. Only 31 percent of respondents from companies with less than 100 employees say they use ESS, compared to 85 percent of those with more than 1,000 employees. However, Stromberg says small businesses shouldn’t discount the efficiencies that ESS offers.
“Employers struggle with staffing, budgets and just keeping up with the work demands, which means it’s even more critical for small employers to utilize employee portals to gain efficiencies and time,” Stromberg says.
While ESS usage is lower among small business respondents, it is still a desired functionality among benefits administration software buyers. In fact, according to a recent Software Advice report on small-business buyers of this type of software, it is the most desired capability.
Employee self-service portals have clear time- and cost-saving benefits for HR departments, albeit in some areas more than others. Tasks related to insurance are performed through ESS most often and save the most time, while tasks related to retirement funds show less clear returns. Perhaps the biggest benefit of ESS is that employees can look up all information related to benefits administration themselves, allowing HR departments time to pursue other important activities, such as recruiting and training.
But not every company that uses software for benefits administration is realizing these advantages, either because they aren’t using their software’s ESS capabilities or their system doesn’t offer this functionality. This is particularly common among smaller companies.
However, Stromberg says more HR departments are starting to realize that ESS is critical to operations.
HR professionals are recognizing that a comprehensive workforce management platform with ESS is critical to create efficiencies and save time, so they can focus on strategic items that contribute to company growth and profitability. With ESS, the employee is empowered to manage benefits and request time off quickly and securely, providing the HR professional time for person-to-person contact when necessary.Trish Stromberg, Infinisource
As more companies realize that ESS is beneficial for even the smallest organizations, HR departments will be able to streamline the benefits administration process, empower employees to find necessary information themselves and focus on more fruitful tasks.
To find the data in this report, we conducted a seven-day online survey of 16 questions, and gathered 151 responses from random HR employees in the United States. We screened our sample to only include respondents who use software to administer employee benefits. Software Advice performed and funded this research independently.
Results are representative of our survey sample, not necessarily the population as a whole. Sources attributed and products referenced in this article may or may not represent client vendors of Software Advice, but vendor status is never used as a basis for selection. Expert commentary solely represents the views of the individual. Chart values are rounded to the nearest whole number.
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