For public sector finance and HR leaders, “doing more with less” is a daily mandate. While cost-cutting usually focuses on premiums, a significant “hidden” drain on the budget often goes unnoticed: manual administration.
Manual processes, such as paper forms, spreadsheets, and disconnected payroll systems, not only slow you down but also create a measurable financial burden. According to the International Foundation of Employee Benefit Plans, manual benefits administration costs public sector organizations an average of $175 per employee annually in staff time and resources.
For a school district or agency with 2,000 employees, that is a $350,000 annual “inefficiency tax.”
The Anatomy of an Inefficient Dollar
Where is that money actually going? Research from EY (Ernst & Young) highlights that the cost of manual HR tasks is rising steadily. As of late 2025, every “manual touchpoint” carries a specific price tag:
-
$20.32 to obtain or provide information about benefit plan changes.
-
$23.27 to manually compare benefit plans for an employee.
-
$12.85 to manually record Form W-4 or other tax data.
-
$17.54 to verify the accuracy of a single employee timecard.
In the public sector, these costs are amplified. Bureau of Labor Statistics (BLS) data from June 2025 shows that total employer compensation for state and local government workers averages $63.94 per hour—nearly 40% higher than the private sector average. When highly compensated HR professionals spend hours on “clerical” data entry, the ROI of your human capital plummets.
The “Error Multiplier”
Manual data entry isn’t just slow; it’s risky. In a study on the real cost of payroll errors, researchers found that:
-
1 in 5 payrolls contain errors due to manual intervention.
-
The average cost to fix a single payroll error is $291.
-
Failing to enter a new hire correctly into a benefits/payroll system can cost upwards of $635 per incident in administrative correction time and potential compliance penalties.
Efficiency: Reclaiming the Public Budget
Automation is the only sustainable way to close these gaps. Organizations that shift to integrated, self-service platforms like Bentek see immediate results:
- Reduced Inquiries: Self-service portals can lead to a 62% reduction in administrative inquiries during open enrollment.
- Payroll Accuracy: Eliminating “double-keying” between benefits and payroll software removes the #1 source of deduction errors.
- Cost Suppression: Administrative cost reductions of 20–40% are common once intelligent automation is applied to the revenue and benefits cycle.
Calculator: What is Your Manual Process Costing You?
Use these 2025–2026 industry benchmarks to estimate your organization’s annual leak.
Manual Admin Cost Calculator
Based on 2025-2026 Public Sector Benchmarks
Estimated Annual Loss
$0
Estimated Breakdown:
- Direct Admin Labor: $0
- Payroll Error Leak: $0
*Calculations based on $175/employee labor burden and a 20% manual error rate ($291/correction).
Example: A city government with 1,000 employees is likely losing $175,000 in labor and an additional $58,200 in error-correction costs, totaling over $233,000 per year in preventable waste.
Conclusion: From Paper to Productivity
The “True Cost” of manual administration is more than just a line item; it’s the opportunity cost of what your HR team could be doing if they weren’t buried in paperwork. By leveraging payroll integration and benefits automation, public sector leaders can redirect hundreds of thousands of dollars back into the community and their workforce.
Want to see how Bentek can help eliminate manual benefits administration and reduce costs? Schedule a demo today!
