Benefits administration market to surge to $144.7 billion by 2028
Benefits administration market to surge to $144.7 billion by 2028 | Insurance Business America
Benefits
Benefits administration market to surge to $144.7 billion by 2028
Rising adoption of automation and cloud solutions to bolster growth
Benefits
By
Kenneth Araullo
The global benefits administration service market is projected to grow by $144.7 billion from 2024 to 2028, according to a report by Technavio.
The market is expected to expand at a compound annual growth rate (CAGR) of 3.09% during this period, driven by an increasing focus on employee wellness and the rising adoption of automation in benefits administration.
However, the high costs associated with software acquisition and implementation present challenges for the market.
Technavio noted that the benefits administration service market plays a crucial role in helping businesses manage employee benefits programs efficiently. These services include claim processing, record maintenance, and ensuring regulatory compliance.
By outsourcing benefits administration, companies can save time and resources, allowing them to focus on core business activities while offering competitive benefits packages to attract and retain talent.
Additionally, these services provide access to advanced technology, economies of scale, and specialized knowledge, which can enhance overall operational efficiency.
The market is seeing significant growth, particularly among large businesses aiming to streamline their employee benefits programs. Self-service portals and HR outsourcing partners are becoming increasingly popular, enabling HR teams to manage benefits packages and employee eligibility through 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 advancements, the market faces challenges related to the high cost of implementing benefits administration software. However, cloud-based solutions are gaining traction due to their flexibility and cost-effectiveness, allowing businesses to customize and automate HR-related tasks.
Small businesses and startups, in particular, benefit from subscription-based pricing models, while medium and large enterprises often require more advanced features like self-service portals, mobile solutions, and compliance support.
Employee wellness remains a central focus, with digital solutions providing real-time access to benefits information, which improves employee experience and engagement. While some companies continue to use on-premise software, many are transitioning to cloud-based alternatives that offer streamlined processes and reduce manual errors.
Multinational companies and technology firms are particularly drawn to advanced HR information systems (HRIS) and HR systems for managing employee entitlements and global compliance.
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