Benefits agencies have been riding a wave of innovation that was created in the 1940s. But, that wave has since crashed on shore and is now viciously pulling people out to sea with it as it retreats. Its time to reinvent the independent agency.
Offering group benefits was the brainchild of some creative people during WWII. Businesses needed to hire more employees but were limited on what they could pay, due to wage and price controls. They got resourceful by taking advantage of tax benefits, and thus, fringe benefits were born.
At that time, employers faced a challenge and needed immediate solutions to a pressing problem: attracting employees. They acted with urgency and created a pioneering solution that was attractive the people they wanted. Benefits agencies have been reaping the rewards of that initial innovation for 70 years and are now facing a similar dilemma. Agencies want to become more attractive to the people they need to attract: employers.
The innovation is long gone and agencies are at a crossroads. Sell the agency? Or commit to independence and find new ways to build new success? Every benefits agency that has seen its business slow, stall, or slide backward should be moving with urgency to find and act upon a new solution.
Independence is my vote, and Ill share some ideas to get started on that path. For inspiration in shoring up the agency model, lets look back to its beginning and do an analysis using the why, how, what process.
Why are you in the business?
What was once an innovative benefit to attract workers is now, for many, required by law. Your opportunity here is to help clients focus on that original why from the 1940s finding and keeping good employees who help build a profitable business. That goal still holds true, but its much more complicated to execute it, which is where you come in.
A quality benefits package is still critical to employment, but its now surrounded with many new complexities that businesses need help executing. Selling only medical/insurance products is not good enough anymore. Businesses will eventually move to those advisers who help with the entirety of attraction and retention, and not just benefits.
To do tip: Craft your why statement. Example: Helping employers create excellent work environments to attract and retain talented employees.
How can you help clients?
As an industry, weve taught employers to rely on brokers solely for benefits products, rather than as consultants to help with managing employees as a critical business function. This shift in thinking must become a foundation for agencies committing to independence. It starts by developing a model focused on your why, and then moves into a marketing and sales process designed to re-educate clients and prospects on a new way to see their own businesses and evaluate a broker.
In commodity-selling models you simply pull products off the shelf; however, in consulting businesses you focus first on understanding the client needs before offering any solutions. How you deliver on this abstract model is by having a defined process where you identify client needs and opportunities, develop targeted solutions, and then help implement to ensure execution and results.
Products and services can always be duplicated; the differentiator and competitive advantage is in how you conduct the process and use the products and services to help your clients achieve goals. And I dont mean a goal of a single-digit premium increase. I mean company goals like growing revenue by 25% or increasing client retention to 90%. Companies cannot achieve goals like this if they have a revolving door of unhappy employees.
To do tip: Outline a process for how you will analyze a client business and implement solutions.
What do you deliver?
The ways you can help employers attract and keep employees are unlimited, including:
- Onboarding program
- Ongoing benefits communication and education
- Internal corporate communication
- Performance coaching
- Recruiting potential employees
- A great benefits package
Dont let your current lack of knowledge hold you back I promise you can develop the new expertise. You didnt know the Affordable Care Act a couple of years ago, and now youre advising clients about it, right?
To do tip: Identify your client needs and potential solutions.
Dont throw in the towel, but rather rethink how your agency works within your community. What do employers need most to attract and retain really good employees? Each community has individual needs, so look to others for ideas to spark your own, but not to copy. Create your own model. Help your local community become a thriving business hub where people want to come to work.
Look back to our innovators of the 1940s for inspiration and a sense of urgency to solve a challenge facing benefits agencies today.
Keneipp is a partner and coach at Q4intelligence in the Seattle area.
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