Right now, there are approximately 28 million small businesses operating in the U.S., according to the U.S. Small Business Administration. These are businesses that each have fewer than 100 employees, and at some point, nearly all will face the challenge of bringing affordable benefits to their workforce.

Balancing benefit cost and value is a dilemma that has small business owners seeking information and guidance. For brokers searching for growth opportunities, this market can be lucrative and rewarding. It also presents a great opportunity to build loyal and long-lasting relationships in an underserved market. But in order to do so, brokers must understand the challenges that drive the decisions of small business owners.

Employer challenges

When it comes to benefits, small businesses share some common pain points, such as:

Employee recruiting and retention challenges
Offering affordable yet attractive benefits
Finding the time to shop for benefits

In fact, the 14^th annual MetLife Employee Benefit Trends Study confirmed that employee retention and cost control top the list of small business concerns. While these are not new concerns, when coupled with the regulatory requirements of the Patient Protection and Affordable Care Act, they leave small business owners looking for expert advice from brokers.

“Small businesses are confused about what their regulatory responsibilities are with ACA,” says James Reid EVP, Regional & Small Business Solutions at MetLife. “They need help understanding those responsibilities and how they can meet them while providing attractive benefits that help them with employee retention.”

At the same time, with the rising cost of health care, employers are shifting more out-of-pocket costs to employees and considering whether to reduce or eliminate essential benefits like dental and vision. It's a move that could impact employee retention. While medical benefits are still the most sought after, dental and vision are also on the list of employees' needs, says Reid. With the MetLife study showing 70 percent of employees wanting customizable benefit options, Reid says that's creating opportunity for brokers. “Small business owners need simple, affordable options that can help them attract and retain talent,” says Reid. “Increasingly, they're turning to their brokers to help them explore non-medical options.”

Reid believes the smart broker can become a trusted resource for small business owners, helping them understand the regulatory landscape and recommending options that meet the budgetary needs of both employees and employers. “This is the perfect time for brokers to further position themselves as an expert resource,” he adds.

Broker challenges

Despite the opportunity, many brokers have yet to discover a simple way to serve the small business market. One challenge is the legwork needed to source right-sized benefits. The transactional nature of the small business market can sometimes make locating coverage options or even carriers that are dedicated to the small business market a time-consuming and challenging process.

In a diverse small business market, brokers who are able to identify a niche, establish their expertise, and build a set of solutions that make adding and administering benefits simpler, gain credibility. Small business owners who are often protective with their time and trust are more open to building a relationship with advisors who understand their business and take the time to get to know their short- and long-term challenges.

Broker opportunity

It's within these challenges that brokers can find opportunity. Technology, along with carriers that have committed to the small business market, are helping brokers optimize their small business client relationships and differentiate themselves in the small business space.

“By providing simple benefit packages that are easy to understand, that are improving through technology and automation, and are easy to administer, brokers can help small businesses focus on what matters most to them – growing their businesses,” says Reid.

Carriers dedicated to serving the small business market should offer simple packages that are tailored to employee needs and employer budgets. Reid says a carrier that builds preset plan designs helps brokers find and recommend the right-sized options for small business clients. Employers, he says, get affordable, easily managed packages; brokers stand out in an increasingly crowded market and build a strong book of business in one of the largest underserved segments in insurance.

Increasingly, small business owners are turning to their brokers for more than just benefits selection. These employer clients appreciate expert guidance and as such, are willing to forge a relationship with a small business broker who understands their challenges and their business. The small business market, says Reid, offers brokers a wealth of opportunity to create long-lasting relationships that can foster a growing small business niche for brokers. “If brokers and carriers work together to make sure that we allow small business owners to have more time and use their money wisely, there's no greater value that we can create.”

For more information, please visit http://www.MetLife.com/smallbusiness.

Instant Insights /

Simple & affordable: How benefits brokers can create small business market appeal

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