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Managing HR processes efficiently is a priority for any organization, but when it comes to benefits administration, a one-size-fits-all solution may not be the best approach. Many businesses face the choice between using a human capital management (HCM) system with a built-in benefits module or outsourcing benefits administration to a specialized provider.
While HCMs offer broad HR functionality, they may not provide the depth of expertise and customization needed to navigate the complexities of benefits administration, compliance, and employee engagement. Understanding the key differences can help HR leaders make the best decision for their workforce.
HCMs serve as all-in-one HR solutions, covering:
However, while HCMs provide convenience, their benefits administration capabilities often lack the depth needed for managing complex plan structures, regulatory compliance, and seamless vendor coordination.
A specialized benefits administration provider focuses exclusively on benefits, offering:
Before deciding, HR teams should evaluate:
For organizations that prioritize benefits administration, outsourcing provides greater flexibility, automation, and compliance support than an HCM benefits module.
A dedicated benefits administration partner can:
Looking for a benefits administration partner that integrates seamlessly with your HR system? WEX offers industry-leading expertise, automation, and compliance support to help HR teams simplify benefits management. Learn more here.Â
The information in this blog post is for educational purposes only. It is not legal, tax or investment advice. For legal, tax or investment advice, you should consult your own legal counsel, tax and investment advisers.
WEX receives compensation from some of the merchants identified in its blog posts. By linking to these products, WEX is not endorsing these products.
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