The CheckPoint HR Blog

5 Ways for Non Profits To Control Employee Benefit Costs

Posted by Paul Jones on Mon, Mar 13, 2017

As not-for-profit organizations are increasingly scrutinized for their finances and fundraising efficiency, many seek to control administrative costs. Since employee administration, including benefits, is among the top expenses for organizations, it should be a key focus area for nonprofits.

Simply cutting benefits is not the solution. It leaves employees with more expensive, lower quality benefits and HR and Operations teams with additional administrative burdens. So, what's left to do? Try one of these five tactics:

1. Complete benefits packages with voluntary offerings

If you decide to offer a health plan with a high deductible or more limited coverage than in previous years, consider boosting your voluntary benefits with low-or-no-cost options. Telemedicine, for example, is growing in popularity, as it gives employees a convenient, cost-effective way to speak to a doctor for everyday ailments.

These benefits are easy to add. Employees appreciate them and they can offer solid additional coverage without adding expenses. With the right online enrollment system, like a comprehensive benefits marketplace, your employees will be able to enroll without your team adding administrative tasks.

2. Use benefits renewal as an opportunity to reevaluate

Often, employers don't strategically plan their benefits renewal process. In fact, they don’t think about it at all until their broker contacts them for renewal. By then, it's too late to make significant changes that could dramatically reduce costs. Instead of taking this approach, use your annual benefits renewal date as a marker for when you should start evaluating your benefit plan. We suggest starting to work with a consultant six months before your renewal date. This way, you can make streategic decisions and obtain competitive quotes from a variety of carriers to ensure you have affordable options your employees will value.

3. Reduce administrative burden with technology

Many of the administrative tasks traditionally associated with HR, Benefits Administration, and Payroll can be completed much more efficiently with today's connected HR technology. If you're manually entering information multiple times in the employee lifecycle, you should investigate the technology that can help you reduce these tasks. For example, an integrated solution might include:

  • Onboarding technology that enables new hires to key in their own employee data
  • Integration that will pull the data from onboarding into your HR system.
  • HR technology with a time and attendance feature, that will directly feed into payroll
  • Online benefits enrollment that will use hire-date for eligibility, include life events, and then send deduction information directly to payroll

In this scenario, employees enters all of their own information, at their convenience, into a web portal. It's captured and securely stored, then pushed across multiple tools for HR to review. The days of working with three or four systems can be left in the past.

4. Selectively outsource key functions

Nonprofit organizations are notoriously lean. For small HR departments and executive directors already burdened with too much on their plates, selective outsourcing can make a lot of sense. Unlike completely outsourcing HR functions, selectively outsourcing gives you the opportunity to decide which functions are best kept in-house, and which can be passed on to someone else. Good areas to outsource might include:

  • Repetitive tasks that take up a lot of time but require little strategy
  • Subject matter expertise for complicated areas, such as ACA Compliance
  • Special projects that can be managed by a strategic outsider

The key difference between complete and selective outsourcing is that in a selective arrangement, you should look for a partner who will work with an existing team, not replace them or make them obsolete. It's not about taking away anyone's job, it's about making everyone really, really good at what they do.

5. Invest in a bundled solution

When you want to save money on your TV, Phone, and Internet, you buy a bundle package -- the ever-popular "Triple Play". When you're looking at employee administration, you can take a similar approach: the more you can do with one vendor-partner, the more you can expect to save.

When looking into bundled solutions, you'll find that software and services (including benefits consulting) are packaged in many different ways. Ideally, you'll be able to have all of the tools your HR department needs in the one system. Consider combining your benefits administration, HRMS, and payroll systems. Adding and online enrollment tool can extend the effects of bundling. If you can get all of these from a strategic health insurance broker, who is constantly seeking ways to save you money and create financial predictability, even better.


What's the big picture for nonprofits? There are many ways to reduce employee administration costs, from bundling, to outsourcing, to evaluating benefits. These options can help your organization without presenting sacrifices in terms of quality and workload to your team. Take the time to evaluate what you're doing now and where you can improve. You will likely end up with the ability to reduce your overall administrative costs and return that money to your greater mission.



 Related Rescource: How KIPP Metro Atlanta  Schools Save On Employee Administration to Better Use Available Funding


Topics: employee benefits, non-profit, not-for-profit