There’s one word to describe today’s benefits administration space: complex.Benefits managers have a number of areas to handle, includingadministration, payroll and compliance, not to mention a host ofdifferent products — from employee benefits offerings to anemerging world of unique consumer-oriented services that supportthe health and financial well-being of the employee. Then there’sthe challenge of gathering a mass of group and employee data andgetting it to the ecosystem of third parties that support theseservices. And, of course, all of this has to be done while tryingto control benefits-related costs.

For an enterprising broker, the challenges faced by a harriedhuman resources administrator present a specialopportunity. Brokers can save the day by offering an array ofsolutions that sort through the maze of the benefits administrationspace, bringing clarity, value, convenience and bottom-linebenefits.

Complexity reigns

Employers consider the management of employee benefits to be anincreasingly complex endeavor. A recent study by Guardian found that nearly 6 in 10 employers felt thiswas an area of high complexity, while 1 in 3 said it was moderatelycomplex. Conversely, less than 10 percent of employers surveyedtermed benefits administration “minimally complex.”

Mid-size firms are the most likely to feel that managingbenefits is an increasingly complex proposition. Nearly 70 percentof employers with between 100 and 2,500 employees struggle tomanage benefits effectively. And, not surprisingly, those offeringthe widest range of insurance benefits were the most likely to seethe benefits administration landscape as complex.

There are a number of “pain points” for benefits administrators.These include communication and education for plan members, theimplementation of new benefits plans, the establishment of anelectronic data interchange, and enrolling employees. Employers arealso challenged to maintain legal and regulatory compliance, toimprove efficiency and to control benefits-related costs.

As a result, employers are seeking new solutions to bettermanage their benefits. According to Guardian’s survey, 50 percentof employers say that expanding benefits web technology is a top strategy toaddress their challenges. This preference underscores theopportunity for advisors and benefits brokers to present solutionsto their clients that reduce the growing administrative burdenassociated with benefits.

Benefits outsourcing on the rise

More and more employers are using outsourcing for their benefitsadministration. In 2016, 75 percent of employers used benefitsvendors, a notable increase from the 67 percent who outsourced in2014. The largest increase in the use of outsourcing vendorsoccurred for large employers with more than 1,000 employees. Thisgroup of employers uses an average of five vendors. However, growthin the use of vendors for benefits administration was still notablefor mid-size companies (100-999 employees).

The selection of an outsourcing partner for benefitsadministration is not something employers take lightly. It’s asignificant task that requires specification of the scope of theservices to be provided and determination of service levels to bemaintained. Relationships with outsourcing vendors tend to belong-term, adding to the importance of making the properdecision.

Indeed, an advisor needs to understand that an employer hascompeting priorities that must be considered when developingsolutions to meet their needs. It’s difficult for a client tohandle an overwhelming amount of change all at once. Significantdisruption to the CFO, the director of human resources, oremployees tend to be deal breakers. On the other hand, customizingevery detail of an effective human resource strategy is not generalscalable for the advisor, nor affordable for any but the largestemployers.

Brokers’ roles in successfulimplementations

Benefits technology systems can greatly reduce the administrative burden on the human resourcesteam. An effective system helps sort through the necessarypaperwork that’s part of the process and allows for seamlessinteraction with multiple third parties, including insurancecarriers, payroll vendors and other consumer products such asHealth Advocate or Teladoc. Technology systems can also enableeasy-to-implement interactive wellness programs.

While many employers currently use benefits technology, not allare realizing success in the form of lower benefits administrationcosts. This may have to do with lack of preparation and ongoingtraining designed for taking advantage of new technologies. Itunderscores how important it is for brokers and advisors to helpclients sort through the complexity of benefits technology, and tothoroughly educate and advise them about the best options so theyknow exactly what they’re getting and are prepared to take fulladvantage.

Learn the market and the technologies

The opportunity to help employers make headway in a complexbenefits administration environment is clear. But how can ambitiousbrokers and advisors exploit these opportunities to thefullest?

The first thing is to understand your target market as anadvisor. Look at your current block of business for commonalities.Do you have a natural niche in a particular industry or do you workwith clients of a similar employer size? Even with a focusedapproach, however, each client and prospect is unique in how theyprioritize their financial and human resources objectives. You’llhave to dig deep to understand the likely needs of each potentialclient.

Once you have a sense of your target market, you need to becomea student of the benefits technology space. Ideally, you’d startwith a set of market-proven technologies that provide a nice mix ofhuman resources and administration tools and then choose the onesthat offer a broad set of combined capabilities, since no singletechnology solution has everything.

Gain an understanding of the capabilities offered by each vendorand platform. Does the technology offer carrier connectivity sothat there’s ease of integration with the benefits carriers youtrust to support your business? Learn about the cost model todetermine if the program can even work for the client. If thebroker is absorbing the cost initially, how can it ultimately beshared with the client? And remember that customization itself hasa cost.

There are labels in the marketplace that can be misleading.Terms such as “private exchange,” “benefits administration” or“HRIS” create impressions that may or may not be accurate. You needto understand what each technology platform does and what it hasthe potential to do.

At first glance, the lines between products can appear blurred,and it can seem like they offer similar features. But they’re notall the same when you get into the details. For example, oneexchange may differ from another in the defined product it offers.Alternatively, some benefits administration platforms may offermore flexibility than others. HRIS systems may offer some of thesame things but have limitations in other areas, such as minimalvoluntary benefit options. Ultimately, you’ll see that differenttechnologies emerge to service the various niches.

In your quest to learn as much about the market as possible, youcan gain knowledge from various resources. Take counsel from thosewith experience, other agencies with whom you have a relationship,and industry networking events where the topic is explored. Yourown agency may have an in-house expert who is well informed aboutthe benefits technology space. Lastly, talk to your top carrierpartners. Much like you, the progressive insurance carriers areevaluating the market and pursuing solutions and integrations thatsimplify benefits delivery for you and your clients.

Capitalize on your role

Given the number and types of available solutions in thebenefits technology environment, it can be challenging to figureout the role you want to pursue so you can add value and ultimatelybuild and protect your revenue stream. As a broker, do you want tobe a consultant for a particular model? Do you want to try toconnect people and be a facilitator? Do you want to brokerservices? Or perhaps you want to be a provider of services andinclude that offering as part of your value proposition.Ultimately, where do you see your role going forward?

Once you’ve determined your place in the benefits administrationworld, be prepared to distill the ABCs of your knowledge into aninitial conversation that brings you from a presenter of partnertechnology options to a point where you’re recommending one thatthat’s the best fit. This discussion sets a consultative tone fromwhich you can build a trusting relationship.

Your skill as a broker and your ability to help your client willbe enhanced if you can quickly discover priority needs anddetermine what’s appropriate for your client. Knowing capabilitiesand what makes for the best fit can help create a better employeeexperience, more engagement, higher levels of participation andultimately increase your revenue stream.

Partnerships are increasingly important

According to Guardian research on broker technology trends, 85percent of brokers expect to partner with a third-party providerover the next three years to better support their clients’ needs.The likely partners include benefits administration providers (38percent), enrollment services providers (32 percent), group generalagencies (21 percent) and private exchanges (17 percent).

If your agency doesn’t have the capital to support multiplepartnerships, you’ll want to pick one partner and focus yourresources. This requires that you have the discipline to do thepreparation necessary to understand the situation rapidly, quicklyevaluate the fit, and then be objective as to whether or not youcan help.

Your best advice might be recommendingothers

You may find that you can offer solutions for certain types ofclients but are unable to help others. It’s also possible that yourpartner or partners may not be appropriate for your prospect. Whenthat’s the case, you may benefit most from having theprofessionalism to admit that to the benefitsadministrator.

For situations when a broker or advisor is unable to provide theappropriate solution for a prospect, they are well served bycreating partnerships with other agencies towhom they can refer business. By creating a network of referralrelationships, a broker can monetize prospects whose needs don’tmatch what they can offer.

By admitting when you can’t help a client and referring them tosomeone else who can, you’re also demonstrating the highest levelof professionalism. You not only profit through your businessconnections but you also build a brand of trust. Ultimately, youdon’t need every possible combination of options to win the trustof a customer.

You can then confidently ask for referrals and returns from theclient who ended up going elsewhere for their needs. In essence,you can be a kind of mass marketer by creating referrals when thereis no fit.

The new benefits industry and the benefits technology area areclearly complex. Brokers who are the best schooled in the space,can provide options, create confidence and shoulder the complexityare most likely to win the technology race. It’s truly anever-changing marathon that requires pace and nimbleness, not asprint.