These are interesting times in the world of healthcare insurance. As organizations tiptoe into complying with the requirements of the Affordable Care Act, there are still many questions that employers need to consider.
At the heart of most of these questions should be why do we purchase benefits the way we do?
And a common response is the worst possible answer for a businessperson – because that’s how we’ve always done it.
However, for some, there is a new awakening that the rote practice of accepting what’s offered as a benefits approach is not good for the bottom line. Virtually every organization in America is horrified at the escalating cost of benefits, but feels helpless. There is an emerging movement focused on turning benefits from business pain into corporate purpose.
That requires a significant shift in approach. Historically, employers have used benefit consultants who are good salespeople, but who don’t offer much in the way of added business value. These salespeople rely on creating relationships with decision-makers to build their book of business, an approach that ignores business realities.
In an era in which everyone needs to maximize business value and look toward the bottom line, employers need to get more value out of their benefits program. Healthcare benefits are a significant cost for employers and they cannot be making this critical business decision based upon who’s “friendly.” You can’t have friends, when it comes to making decisions about benefits.
As CFOs gain greater control of what happens in the benefits sphere, the true business impact is (finally) being measured. And that means bottom-line oriented people are questioning some of the long-held practices in the benefits consulting space. They’re looking for value, not tickets to a sporting event or a night on the town.
What it ultimately means is that the benefits consulting industry’s commission-based sales environment is going to evolve over the next few years. A model focused on sales commissions is about sales, and a sales focus is not what’s best for the client. What the client needs is smart advice that comes from an understanding of the wider impact of a benefits program on an organization. As time marches forward, you’ll see a diminishing focus on commission-based sales.
Let’s face it, as benefits consultants, we’re selling a commoditized product. Our clients don’t need sales people who all sell the same thing; they need partners who are going to help their business succeed… who are going to provide value-added services and advice.
In my view, the future of employee benefits will be advice-centric, with the predominant focus on the consultative aspect of consulting. Wrapping benefit services and advice is what smart employers will demand in the very near future.
This future vision promises a seismic shift in how employers purchase benefits. It will very likely leave behind most benefits consultants, but provide tremendous value for employers.