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One of the main reasons why many companies stay with the same benefits broker year after year is because they have a personal relationship with them. Maybe they’re brothers-in-law, golf buddies, or business school friends. There’s a good reason for that – connections are important for business success, they might feel more comfortable being upfront with a broker they know, and sticking with the same broker can give a sense of stability often lacking in a growing business. But at the same time, these relationships often cause businesses to stay with the same broker even after they have stopped providing the highest level of service.

No matter how great, personal, and long-lasting your connection is with your current broker, it is always a good idea to reevaluate the relationship. This does not mean just ditching your current broker because there might be someone else out there who will do more for your business. It simply means taking an honest look at your current broker to see if they are still doing everything possible to help your company grow and succeed. And then, if you have doubts, looking at what competitors are offering to see if you could benefit your business by switching brokers.

If that idea makes you uneasy, we get it. Honestly evaluating your business relationships and potentially changing them can be difficult and sometimes painful. It’s much easier to just let things stay the way they are. But if you do, you will be doing yourself, your business, and most importantly, your employees, a huge disservice. So we’ve broken down the steps that you can take to make sure that your current broker is still the best fit for your business, no matter what relationship you have with them. In this article we’ll explore:
• Why You Should Care About Your Broker
• Risks and Rewards of Working with the Same Broker
• How to Evaluate Your Broker
• What to Do When Your Broker is Friends with Your CEO

Why You Should Care About Your Broker

Many growth-stage businesses treat benefits as a necessary evil and as such, they choose the path of least resistance. This may mean working with their buddy, or it could mean working with a broker who doesn’t push them think about their long-term benefits strategy, even if that means that their employees end up with subpar benefits at a higher cost. But the fact of the matter is that employee benefits are a crucial component to the success or failure of a growing business.

Benefits spend is generally the single largest talent-related cost after base salary. That means that minimizing benefits expenses is extremely important to the financial sustainability of growing businesses, especially given the small margins most operate upon. You want to work with a broker who does absolutely everything that they can to reduce your benefits spend while maintaining or increasing the quality of benefits for employees.

And benefits don’t just matter to your bottom line. They are one of the biggest tools in your arsenal to attract, retain, and motivate top talent. According to Aflac surveys, most employees would accept a job with lower compensation but a better benefits package. And the same survey found that 80% of employees believe that their benefits package influences their engagement in their jobs. Building an effective, motivated team of talented employees is vital to the success of any business. But many struggle to compete for talent against large companies with greater resources. A targeted, intelligent benefits strategy which maximizes impact while minimizing costs can help growing businesses attract the talent that they need.

To have this impact on your employees and your finances, though, you need to work with a benefits broker who understands your unique needs and who is constantly working to update and optimize your benefits package. It’s not enough to set up your benefits package and then forget about it or to work with the same broker year after year without considering whether they’re delivering the maximum value for your business (even if they are your brother-in-law).

Risks and Rewards of Working with the Same Broker

Are there plus sides of working with the same broker, especially if you have a close relationship with them? Of course there are. They might advocate harder for your business because of their relationship with you, provide more personalized service, and serve as a more effective sounding board for your benefits strategies. Plus, it’s nice to do business with someone who you know and like.

At the same time, though, those same feelings that give you pause about the idea of changing brokers can also hold you back from being a fierce advocate for your business and its employees. You might be afraid of damaging your relationship by pushing your broker to provide the most effective, and affordable, benefits package possible. Failing to keep business relationships and personal relationships separate can often lead to sub-optimal business results or even conflict and damage to both relationships.

And it’s not just your attitude that matters. Most brokers, no matter how good their intentions are, will start taking accounts that they feel are ‘safe’ for granted. They’ll focus their time and resources on pleasing their new clients and acquiring new accounts. And no account is safer than one that is secured by friendship or family connection. Your brother-in-law or college buddy might well work extra hard to get you a good deal when setting up your benefits package. But chances are that they’ll start taking your business for granted, especially as the years pass by. The level of service will decrease, your benefits package will get outdated, and you will lose your competitive edge to attract and retain the talent you need to succeed.

How to Evaluate Your Broker

There’s no harm in finding out whether or not your current broker is providing the maximum value to your business. Taking an honest look at your benefits strategy and your benefits broker only helps you improve your employees’ lives and your business’ finances no matter what you decide to do with the information.

So how do you tell whether your broker is still the best fit for your business? Here are some key things to ask yourself when evaluating your broker:
• Have they updated your benefits package recently? If your benefits haven’t changed in a long time, it’s likely your current broker isn’t taking a critical look at how to constantly improve your offering.
• Are they working with you to refine your benefits strategy based on your business needs and the needs of your employees?
• Can you demonstrate ROI to justify your investment in your broker?
• Is your broker working with you to develop innovative solutions to maximize value and minimize costs?
• Does your broker identify and address your employees’ real needs? Brokers can conduct employee surveys and health-risk assessments (HRAs) to identify employee needs and adapt your benefits strategy to meet them.
• Is your broker leveraging the latest in benefits technology? Telemedicine, enrollment software, and a centralized benefits administration platform are all tools that can make a big difference for growing businesses.
• Do your employees report a high level of satisfaction with their benefits?
• Have your benefits expenses per employee been going down year over year? If not, your broker might not be doing everything they can to minimize your costs.

If you find that many of these questions can be answered with a ‘no’ and your broker is unwilling to adapt to meet these challenges, then it may be time to do some serious thinking. It isn’t worth staying with a broker who is underperforming and damaging your business, no matter how great your relationship with them is.

What to Do if Your Broker is Friends with Your CEO

One of the worst positions you can find yourself in as an HR or Finance professional is being dissatisfied with a broker who is buddies with your CEO or a board member. You understand what’s best for the business, but your hands are tied by your higher-ups’ relationship with the ineffective broker. How can you go about convincing them that it is time to reevaluate the relationship?

Of course, you can always send them this article. But that in itself may not be sufficient. The first thing you should do is collect as much information as you can. Research the latest benefits and technology, what other brokers offer, and what other companies pay for their benefits. Conduct employee surveys to identify employee needs and attitudes towards the current benefits. It might even be a good idea to solicit quotes from other brokers so that you can provide concrete alternatives when presenting your position to your CEO or board.

The next step is to use this information to craft a business case for switching or reevaluating brokers. Focus on ROI in terms of benefits expense savings and talent acquisition, retention, and engagement. Whenever possible, back your claims up with data. Draw a comprehensive picture of your company’s current benefits package and its performance, and then use your research to show how it can be improved.

If you draft an effective business case you will hopefully convince your higher-ups that something should be done about the company’s benefits. It’s now up to you to show them the path forward. Outline the steps involved in switching brokers (did you know that switching brokers is extremely simple?). If you’ve already gotten initial quotes, you can use these to smooth the transition to a more proactive broker. Not only will explaining the next steps help you make your case, but it also will help ensure that action is taken to remedy the situation. Companies often hesitate to take these kinds of big steps out of fear that they will disrupt the business’s operations. Laying out a clear path forward, along with its costs, savings, and effect on employee experience can make the difference between staying with your current broker and taking the next step to help your business grow and succeed.

Key Takeaways

We’ve covered a lot of ground in this article and reevaluating your relationship with your benefits broker is a highly complicated and charged topic, so we don’t expect you to have it all down right away. Feel free to refer back to this article whenever you need a refresher, and keep in mind the key points we’ve covered:

• Your employee benefits are your second biggest talent-related expense and one of your primary tools to attract, retain, and engage the talent your business needs to grow and succeed. So taking a strategic approach to working with your broker is incredibly important to your business’s health. Even if it means reevaluating your business relationship with a broker who is also your friend or family member.
• Unfortunately, brokers who you have a personal relationship with will often take your business for granted. That means that they will start providing a lower level of service, fail to update your benefits, and not work as hard to minimize your costs while maximizing value for your business.
• It’s a good idea to make an objective evaluation of your current broker so that you can get them to deliver better results for your company and its employees or so that you can find a more proactive broker.
• If you’re ready to change brokers but your higher-up has a relationship with the existing broker, then you need to craft a business case for switching brokers using as much data as you can collect, and you should outline the steps necessary to change brokers.

Your benefits broker has too much power over your business’s long-term success for you to rely on the same broker based on a sense of obligation due to your existing relationship. Reevaluating that relationship will allow you to maximize the value for your business and its employees, whether you change brokers or not.

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