News >> Browse Articles >> HR News

Managing HR Cost in this Economy

THE HR COST-MANAGEMENT PROCESS

Three basic components should be included in any process to identify and implement cost-reduction opportunities. These components include a comprehensive “audit-like” review of all areas under the HR blanket, a rapid assessment, and an independent and coordinated approach with other departments.

Employers that have gone through this process of identifying items to consider often prefer an audit-like approach. This includes gathering information about the programs offered, including summary plan documents, HR policy statements, open enrollment materials and other employee communications needed to understand employee offerings. Employee offerings include, but are not limited to, the following:

— Pension or retirement plans
— Health care programs including medical, dental, vision and prescription drugs
— Life insurance
— Disability plans
— Paid-time-off programs
— Other leave programs such as family medical leave
— Employee assistance programs
— Special pay programs
— Employee awards
— Workers’ compensation.

Employers that are in the best position to assess opportunities also have easy access to annual cost information for each individual employee program. Cost information should include annual gross costs as well as costs covered by the employee. Employee census and enrollment information by plan can also be useful and important information.

Employers should also collect vendor contracts to ensure an understanding of what services are being provided to employers and the costs associated with those services. Vendors include health plan claim administrators, pharmacy benefit managers, pension plan administrators, payroll processors, benefit plan administrators and other supportive vendors. Costs associated with the outsourced administration of the HR function should be captured and measured against best practices to determine areas for improved efficiencies and service delivery.