Rising utilisation of automation and cloud solutions to support growth
Technavio predicts that the global benefits administration service market would rise by $144.7 billion between 2024 and 2028.
During this time, the market is predicted to rise at a compound annual growth rate (CAGR) of 3.09%, owing to a greater emphasis on employee health and increased usage of automation in benefits administration.
However, the high costs of software procurement and execution pose obstacles to the sector.
According to Technavio, the benefits administration service market is critical to helping firms manage employee benefits programs efficiently. These services include claim processing, record management, and regulatory compliance.
Companies that outsource benefits administration can save time and resources, allowing them to focus on core company activities while providing competitive benefit packages to attract and retain talent.
Furthermore, these services offer access to modern technology, economies of scale, and specialised knowledge, which can improve overall operational efficiency.
The market is expanding rapidly, especially among large organisations looking to streamline their employee benefits plans. Self-service portals and HR outsourcing partners are gaining popularity, allowing HR staff to manage benefits packages and employee eligibility via user-friendly interfaces.
In the manufacturing sector, there is a growing adoption of software platforms for benefits administration, facilitating automated compliance tracking and plan customization. These self-administration portals offer features such as plan selection, enrollment, eligibility verification, and reporting, all accessible in real-time. The integration of AI and automation is also emerging as a key trend, helping to reduce overhead costs and ensure data security.
Despite these developments, the market still faces obstacles due to the high cost of deploying benefits administration software. However, cloud-based solutions are gaining popularity due to their flexibility and cost-effectiveness, allowing organisations to personalise and automate HR-related processes.
Small firms and startups benefit most from subscription-based pricing structures, whereas medium and big corporations frequently require more advanced capabilities such as self-service portals, mobile solutions, and compliance support.
Employee wellness is a top priority, with digital solutions enabling real-time access to benefits information, enhancing employee experience and engagement. While some businesses continue to utilise on-premise software, many are switching to cloud-based solutions that provide streamlined operations and decrease manual errors.
Multinational corporations and technology organisations are particularly interested in advanced HR information systems (HRIS) and HR systems for managing employee entitlements and worldwide compliance.
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