What is Benefits Administration?

Definition and examples of Benefits Administration
By Abhishek Kathpal Updated 28 July, 2022

Employees receive all sorts of compensation. Part of their compensation packages is benefits. However, these benefits need to be created and managed by the company's HR department according to the roles and positions occupied by the employee. The process of doing this is titled benefits administration.

What is Benefits Administration

Benefits Administration meaning and definition

Benefits administration is the full range of activities involved in designing, creating, and managing an organization's employee benefits program. This is crucial as such a program is vital to attracting skilled employees. The process determines which employees deserve what benefits and to what extent.

Example of Employee Benefits

  1. Health insurance

  2. Vacations

  3. Paid leave

  4. Sick leave

  5. Retirement benefits

Importance of Benefits Administration

  1. It can help an organization attract the best candidates for its positions. There are not many skilled employees roaming about unemployed, and companies find themselves in competition for the available ones. Effective employee benefits administration can give companies an edge when recruiting employees.

  2. It encourages employee participation and engagement. Benefits help a company show appreciation for its employees. This, in turn, allows employees to grow confident enough to contribute, participate and engage. The positive, efficient atmosphere created by such engagement positively impacts employee retention in the long term.

  3. It helps companies save money. Good employee benefits administration includes a healthy bit of research about industry benefits standards and trends. Such an evaluation of existing practices helps a company's HR department make educated financial decisions and optimize its benefits program.

Roles of a Benefits Administrator?

The benefits administrator is a particular HR employee in charge of the administration process. Such a person is knowledgeable about government guidelines on benefits (such as EBSA-protected benefits). In addition, such a person develops the program, ascertains employee needs, determines relevant benefits, and implements the program.

About the Author

Abhishek Kathpal

Abhi is the co-founder at Longlist.io. Funded by US based OnDeck, Longlist is currently enabling 50+ businesses to increase their candidate and client reach outs, automating the workflow across stages.

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