What Would Cause An Employer to Switch Benefits Brokers?

Employers are constantly impacted by emerging trends that can cause significant shifts in business strategies and goals.

Human resources is no exception, especially when it comes to workforce trends. Employee benefits is one example where offerings, technology, and expectations change routinely.

This can cause headaches for smaller employers who may not know how to adapt to these changes and remain competitive with employee benefits. That’s why keeping up with the latest trends and data is so important for business leaders and brokers alike.

Recently, we highlighted SHRM’s 2019 Employee Benefits Survey, and now BenefitsPRO has released their annual benefits survey.

HOW ARE EMPLOYERS APPROACHING EMPLOYEE BENEFITS?

BenefitsPRO’s 2019 employer survey was taken by over 150 benefits decision makers at companies of various sizes.

Technology and the role of brokers were two areas of focus in this survey. In general, 95% of employers said technology is a “must have” or “very important” for everyday success.

Looking at brokers, the results show how much employers want to communicate with their advisor when it comes to technology:

• 78% said they are satisfied with how frequently they speak to their broker about technology information
• 50% said they speak to their broker at a minimum of once a year, sometimes multiple times per year.

However, opportunity exists for brokers to be seen even more as a trusted advisor. 19% of employers want to talk more frequently with their broker while 24% never talk to their broker about benefits technology.

The survey results also breakdown how often employers talk to their brokers about benefits technology:

• Weekly – 8%
• Multiple times per month – 11%
• Once a month – 8%
• Multiple times per year – 35%
• Once a year – 14%
• Not at all – 24%

EMPLOYERS AND THEIR BENEFITS BROKERS

The importance of benefits brokers continues to grow as benefits administration becomes more involved for business owners to manage themselves.

That’s why it’s not too surprising to see that 90% of employers wouldn’t consider removing their broker and administering benefits on their own.

But that doesn’t mean a business owner wouldn’t consider switching brokers. In fact, the survey revealed a few reasons why employers would look to change brokers:

• Cost – 51%
• Better product offerings – 46%
• More consultative approach – 24%
• Better communication – 22%
• I wouldn’t consider changing brokers – 25%

These are important factors for brokers to consider when interacting with clients to avoid losing them to competitors such as direct-selling professional employer organizations (luckily there is a partnership that can help with that!).

With costs being the main reason why clients switch brokers, it makes sense to explore how brokers can help their clients reduce costs – and that’s the next part of the survey.

Employers were asked about the cost-saving strategies that benefits brokers have discussed with them:

• Reference-based pricing – 56%
• Direct contracting – 34%
• Direct primary care – 35%
• Bundled payment – 29%
• Other – 19%

WHAT ARE EMPLOYERS SAYING ABOUT BENEFITS?

Next, the survey dives into employee benefits trends such as the most important benefits, associated costs, and more.

Employers were asked to name the benefits that employees consider the most important. Health insurance was the overwhelming number one response with 81%.

Even though employers had said that cost savings is important, the survey showed that they don’t want to pass increased costs to their employees. 54% said they do not expect employees to pay more for their benefits in the coming year, and 81% have not dropped spousal coverage.

Next, the survey lists additional perks and the percentage of employers that are either already offering or considering them:

• Retirement plans – 78%
• Wellness programs – 66%
• Financial wellness program – 64%
• Remote work – 51%
• Flexible hours – 49%
• Condensed work week – 16%

For more results from the BenefitsPRO report, click here to view the full survey.

WHAT CAN EMPLOYERS AND (BROKERS) DO TO BE READY FOR EMERGING BENEFIT TRENDS?

With 2020 getting closer, more benefit trends will emerge as we move into the new year. Employers of all sizes, including small businesses, will need to keep up with employee expectations around benefits in order to retain and attract talent.

And for brokers, being able to offer the most in-demand benefits and perks along with providing assistance around employment law compliance are a must to be seen as a trusted advisor.

For both small employers and their brokers, exploring a partnership with a broker-only PEO could be the perfect solution!

Not all PEOs want to take clients away from brokers. Broker-Only PEOs look to partner with brokers to help protect and grow their book of business. Download our eBook to learn more about Broker-Only PEOs, how they operate, and what this partnership could mean for you.