We know that HR directors, benefits managers and C-suite executives are horribly frustrated with employee benefits - not simply with the high cost of the medical, but perhaps most with their lack of control over the process.
Employee benefits planning (such as it is) has become a thoroughly reactionary process. From the effective date, all parties involved hold their breath, awaiting delivery of the renewal notice. My broker clients tell me no task is more unpleasant than delivering a high renewal. I joke that I always know where to find brokers at renewal time (no, not at the bar!); they are at the Army-Navy surplus store, buying a helmet and flak jacket before they go into their renewal meetings.
Shoot the messenger
Once a high renewal has been delivered, clients generally go through two phases. First is anger, often irrationally directed at the messenger (hence the value of the helmet and flak jacket.) The anger derives in part, of course, from the fact that the high renewal requires more work - making changes to the benefits plan.
The second reaction to a high renewal most often resembles the frenetic chaos of a Chinese fire drill, as the client and broker scramble under severe time pressures to cobble together a somewhat-coherent and workable solution to managing the renewal.
Once a new benefits plan finally is developed, the whole sad cycle begins again, and the dread returns to hang over all parties until the next renewal.
No one is driving the car
This annual, insane ritual occurs because no one is driving the client's benefits strategy. As in the Chinese fire drill, no one is willing to take the wheel and drive the car. The reactionary approach to benefits planning is simply the default because there's a leadership vacuum. This presents a tremendous opportunity for brokers looking for a way to become more consultative.
Driving the benefits strategy means helping clients develop an intentional and forward-thinking plan for benefits. The need for a proactive approach to benefits planning isn't just obvious, it should be glaring.
Business owners, and specifically CFOs, have a plan for managing every aspect of the enterprise, except benefits. Most successful companies use strategic planning to set priorities and goals for the future. The CFO or controller uses the strategic plan like a road map for operational direction. The CFO will inform HR that the enterprise strategic plan requires that the medical renewal come in under a certain percentage increase or plan changes must be made to keep total benefits cost below a set dollar amount.
While the enterprise strategic plan seems to guide management's every move, in almost all cases, neither the CFO nor HR has in place a strategic plan to deal with a high renewal. There is no road map for benefits decisions if changes to the plan are required. This leaves HR making critical and costly benefits decisions in a haphazard and rushed fashion with little or no consideration of larger or long-term strategic goals. Again, that's because, at most companies, no one is driving the benefits strategy.
Benefits strategic planning
A benefit strategic plan is like the enterprise strategic plan, but with outcomes specific to the company's benefits plans. By embracing benefits strategic planning, you can take control of your client's benefits strategy and develop a relationship with the C-suite executives, all while making your HR contact look like a hero.
The cost of employee health care clearly has become one of the most significant costs for organizations today, comprising 9% to 12% of total operational expenses. In the face of consistently rising health care costs, companies must adopt a long-term strategy supported by tactical plans to control these costs. By implementing a benefit strategic plan, organizations can make decisions regarding benefits and health care with a more intentional, long-term view and with significantly less stress. No more Chinese fire drills.
Moreover, at the conclusion of the benefits strategic planning process, the organization now has a benefits plan that is aligned perfectly with the enterprise plan, supports and advances the overall business strategy, and has complete buy-in from the C-suite leadership because they were party to the process.
With benefits strategic planning, you guide and facilitate the creation of a three- to five-year plan that anticipates and plans for all contingencies that might occur with the benefits program.
By introducing benefits strategic planning into an organization, you help HR and the company move from a reactive to a proactive posture, keeping one step ahead of the rising cost curve.
Tuning into WII-FM
Now let's tune in to everyone's favorite radio station, WII-FM, and answer the ever-present question, "What's in it for me?" By helping your clients implement a benefits strategic planning process, you:
* Differentiate yourself and your practice from the competition
* Improve your client retention
* Create chances for new revenue
* Elevate your role beyond that of a mere salesperson
Brokers tell me that one of their greatest prospecting challenges is differentiating themselves from the competition. Let's face it, everyone has access to the same health plans with the same rates, and government regulation is imposing increasing conformity on plan design. The old days of shopping carriers and carrying quotes to get the business are history, and even plan design expertise has limited value. Offering benefits strategic planning makes you not just different, but uniquely better. Wearing a bow tie makes you different; helping your client take charge of the benefits planning process and align the benefits plan with the enterprise strategic plan - that makes you better.
Want a powerful approach to use with a new prospect? Don't ask if she's interested in hearing what you can save them on their medical; that lacks credibility. Instead, try asking, "Are you happy with your broker's benefits strategic planning process?" You'll enjoy the look of confusion on her face. Because, of course, her broker doesn't have a benefits strategic planning process . . . doesn't even know what benefits strategic planning is. Now ask for 20 minutes to explain how benefits strategic planning can help HR become a partner with the C-suite. You'll get your appointment.
Bake yourself into the plan
One of the most exciting aspects of benefits strategic planning is that while you are helping the client create that three- to five-year plan, you're building yourself into it. You not only have provided the framework and many of the specifics of the plan, you also have signed a non-disclosure agreement so that the CFO can share with you the company's financials, goals and growth strategies for the coming years. You have baked yourself right into the organization's three- to five-year benefits strategic plan and have become indispensable to the company for the foreseeable future.
Plan more revenue
While you are helping the client plan for such contingencies as a renewal that exceeds the increase allowed by the enterprise strategic plan, you will need to provide plan design options that almost certainly will involve new benefits, specifically voluntary benefits. The cool aspect of this is that your introduction of voluntary benefits is intentional and strategic as part of a contingency plan, for the purpose of managing a possible high renewal. You're not just pitching products, but are integrating them into a comprehensive plan design that will achieve a consensus goal of controlling benefit costs.
And notice the word "consensus" above. The HR director as well as the CFO will have signed off on offering the voluntary benefits if a renewal triggers the contingency plan. There will be no hesitation once the contingency plan is implemented. And more products mean more revenue for you.
Moving from transactional agent to trusted adviser
Finally, and perhaps most important, your role in introducing and facilitating the benefits strategic plan moves you far beyond the broker's usual transactional role of salesperson. You are now sitting on the same side of the table as the CFO, privy to the company's most closely-held plans and goals. Simply put, benefits strategic planning helps you move from mere salesperson up the ladder to the valued role of trusted adviser. With competition for clients increasingly more brutal, aren't you ready to differentiate yourself from the rest of the pack? Using benefits strategic planning to drive the client's benefits strategy, you can take control of your accounts and help manage their benefits plan for their - and your own - long-term success.
Griswold is a leading authority on consultative selling and cross-selling voluntary. Reach him at 615/656-5974, firstname.lastname@example.org.
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