As brokers quickly shift gears from open enrollment to selling season, now’s a great time to take a step back and assess every client you met with to ensure your relationships are solid and none are at risk of leaving. We all know that from now through late summer, producers will be determined to acquire accounts from incumbents that didn’t deliver great experiences during open enrollment.
Those that stand out will use technology as a lever and really differentiate themselves by showing their compliance and human capital management (HCM) expertise. Nowadays, brokers are not only trusted advisors on all things HCM but should also consider themselves the “hunter-gatherers” of resources, charged with bringing the best solutions to the table.
It’s more important than ever to provide your clients with the best tools and resources to excel in HCM, while also managing your own client acquisition costs. So how can you make sure you’re bringing clients the right mix of HCM technologies and expertise while keeping your costs in check?
The two most prominent ways benefits brokers expand their HCM offerings are:
1. Adding internal resources. This could mean either hiring a producer with HCM knowledge, or partnering with athird party to acquire their expertise.
2. Partnering with an organization. Specifically, one that brings HCM technology and expertise to the table and provides revenue-sharing streams for your role in a referral.
Both options have pros and cons. Recommending a partner firm’s technology adds an element of service and risk the broker would then be responsible for taking on. Hiring producers can be tough when many firms are already struggling to find the right talent to begin with. Further, hiring traditional producers from other firms usually requires a minimum guaranteed salary before they’ll bring in a single piece of business. Then, you also need to consider that the average annual revenue per new client is usually low when compared to the salary that new producer is paid.
According to business coach Kevin Trokey, when you consider the first-year costs associated with new business written by a typical producer, it can take anywhere from three-and-a-half to six years for a typical account to become profitable!
What’s the solution?
The traditional benefits broker may not be relevant for much longer. Firms that only focus on traditional benefits and don’t touch on the broader technology conversation will be gobbled up by firms that do. Brokers need to “un-think” their traditional approach to client acquisition. At the end of the day, it is the innovative firms that will disrupt the market and the approach they take around advising and consulting with clients in a cost-effective way that will drive new revenue streams to help them grow and evolve.
To continue to build trust and provide value for existing clients, be sure you’ve scheduled an open enrollment post-mortem meeting to re-evaluate HCM strategies and discuss challenges and opportunities for growth. You want to get in front of your clients quickly so you aren’t forgotten until next enrollment season.
Before that meeting, ask yourself if you can answer whether your clients are dealing with any of the following situations:
Key leadership changes in the C-suite
Key personnel changes in HR, payroll, or benefits administration
The potential of disruption through a merger or acquisition
Looking for recommendations for an HR consultant
Compliance concerns regarding FLSA, ACA reporting, audits
Expansion to another state or international growth
Big spike in hiring or recruiting
If you’re uncertain whether your clients are experiencing any of these situations, you may have been too caught up in the tactical aspects of enrollment and failed to look at the broader business landscape that your clients are encountering. Mistakes like that can be costly.
A word to the wise: Always be on the look-out for triggers that can disrupt your client relationship and try to shake things up at your next meeting. Instead of conducting a traditional debrief, discussing whether employees ID cards got there on time, make time for conversations on overall strategy alignment and evolving client needs. Whether or not your firm currently has the capabilities to serve your clients’ growing needs, it’s better to identify those opportunities now than be caught off guard when your client leaves.
Now’s the time that your clients are reevaluating your performance during open enrollment, so strike while the iron’s hot! Quickly get in front of them to find ways to enhance your relationship and avoid being left behind.