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The risky business of too many vendors

February 07, 2023

3 minute read

Category: Benefits Strategy

business meeting

When it comes to vendors working in your organization, more does not always mean merrier. The more you bring on, the more complexity you add to your workflow. This creates potential problems for you and your team.

Keep these risks in mind when it comes to working with multiple vendors.

Larger Administrative Burden

Each vendor you bring on will require a good portion of your time and resources to onboard. Factors like setup costs, training and education, security, and compliance communications will all add more to your plate. Each new relationship is going to demand a lot of your team’s attention. Additionally, you may need to account for different sets of data in different places, several logins, and multiple bills. It’s a lot to keep straight.

With as much as you have on your plate already, is more administrative work really what you need?

Opportunities for Miscommunication

With multiple vendors involved in your processes, clear communication is at risk of becoming muddied. A strong communication strategy is key for successful relationships. Mistakes can arise when that strategy is compromised. Things can get lost in translation when you add people to your communication channels. If you feel lost, imagine how your employees will feel. With several sources of information, will they understand who to go to with their questions and issues? They can be at risk for confusion and frustration if they don’t have a single point of contact.

Less Efficiency

Bringing in a third-party to help is supposed to make your life easier. But think of the phrase, “too many cooks in the kitchen.” Your organization could soon become overwhelmed with too many cooks. Bottlenecks, longer processing times, and lack of ownership are all issues that can arise when you’re working with multiple vendors.

Can you afford to lose efficiencies?

Transactional Relationships

Vendor relationships can often feel like a business transaction, especially when you must divide your attention among several of them. Don’t let your relationships become transactional. You need a strategic partner who can be a consistent, personal presence for you and your employees.

“It never feels like it’s a business transaction. It’s much more like it’s like working with a partner who is looking out for your own best interest.” – Dr. Kevin Carl, Superintendent, Hancock Place School District, Missouri

Single Source for Benefits Administration

You’re stretched thin already and deserve a simpler way.

“If they’re using multiple vendors, get rid of them and go with one. That makes it a lot simpler for the employee and employer.” – Tammy Brown, Benefits Coordinator, Coffee County Schools, Georgia

One bill, one contact, and one vendor who understands your total benefits package — that’s easier. Don’t risk it. Find a single vendor that can do the work of multiple.

This blog is up to date as of January 2023 and has not been updated for changes in the law, administration or current events.

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