Flexible Benefits Administration Category Procurement Intelligence Report

The market for HR Services and its sub-segments such as Flexible Benefits Administration are at an interesting intersection. New locations and vendors are emerging as cost effective suppliers of Flexible Benefits Administration, offering an opportunity to widen the supplier base and gain further negotiation leverage with incumbent suppliers.

Suppliers are increasingly offering a 'bundle' of services which is marketed as a cost saving option. The bundled offering often includes services that are not required by the buyer or are charged at a much higher rate than an A la carte option with another supplier.

With the influx of millennials in the workforce and increasing diversity at the workplace, companies are struggling to design pay and benefits processes that are uniformly relevant for the lifestyles of such diverse groups.

Trends like these and many others discussed in this report are necessitating a relook at the way Flexible Benefits Administration is procured and the procurement cost saving opportunities that exist.

As market conditions become more dynamic and procurement practices get more sophisticated, category managers need to be cognizant of the best practices that work for their Flexible Benefits Administration category procurement. The report offers a succinct analysis of Flexible Benefits Administration procurement best practices.

For example, Besides shortlisting potential suppliers based on services offered and cost, they also need to be evaluated against several other critical parameters. Some examples of these parameters are compliance with laws and regulations, capability to protect personally identifiable information and technical standards adopted (e.g. user interface, user exchange standards, data exchange standards). RFPs soliciting the above information ensures competition among suppliers and facilitates efficient evaluation.

Buyers should promote competitive bidding scenarios and supplier competition to gain cost and value benefits. Bids should be invited from a substantial pool of service providers that can meet their requirements.

Category managers should track and measure suppliers' performance against a predefined set of KPIs that are agreed by both parties during contract negotiation. Results of the metrics can be linked to the employee satisfaction achieved in managing employee services and cost saved by successfully integrating various HR services with such administration.

Flexible Benefits Administration procurement managers also need to proactively identify and mitigate potential risks that can arise in the supply chain or contracts for Flexible Benefits Administration procurement. Some examples include: