HR outsourcing study on global benefits administration

NelsonHall's latest HR Outsourcing study contains an analysis of vendor positioning and strengths and weaknesses, together with detailed assessments, for the leading benefits administration vendors.

Leading the way are Hewitt with 10.8% market share, and Fidelity with 7.3% of a global market worth $13.66Bn.

Overall, the benefits administration market consists of health & welfare, pensions administration, flexible benefits administration, and Consolidated Omnibus Budget Reconciliation Act (COBRA) services. Growth in these services combined will be 10% CAGR over the next few years, taking the overall global market to over $22Bn by 2010.

This latest study entitled 'Benefits Administration Vendor Landscape' (a companion study to 'Targeting Benefits Administration') identifies four key vendor positioning strategies within the benefits administration marketplace:

Focusing on transactional services, such as COBRA and FSA, which larger vendors do not have the expertise, or the inclination to provide. Vendors within this segment are typically partnering with standalone and full service benefits vendors to provide these niche services

Providing single service benefits administration, e.g. health and welfare administration, or pensions administration. This positioning is dominant with organizations targeting the mid-market segment (companies with up to 10,000 employees) and those operating in countries where healthcare is state mandated

Providing multi-service benefits administration, or service offering 'bundling', with vendors positioned here offering larger organizations a co-ordinated benefits administration approach

Providing benefits administration as part of a wider multi-process HR outsourcing contract.

Hewitt Associates is the global and North American market leader, with 10.8% and 12% share respectively, but retirement organizations such as Fidelity, CitiStreet, VanGuard and Trowe Price are looking to increase their share of the top ten.

Players stronger in mainland Europe include Hewitt in the Netherlands, following their 2005 pensions administration acquisition from Royal Phillips Electronics, and Mercer, who recently purchased Swiss outfit Pendia.

The study contains detailed analyses of vendor positioning by service type and company size, plus analysis of the strengths and weaknesses of 21 benefits administration vendors. The full report is 127 pages, and is published as part of NelsonHall's HR Outsourcing subscription research program.