While uncertainty exists in many aspects of today’s business and employment landscape, one thing remains certain: Workforce benefits remain central to employers’ value proposition in the competition for talent. However, strategies that worked in the past may not align with the needs and preferences of today’s employers and their workers. As such, benefits advisors, carriers, and other players in the employee benefits ecosystem must remain vigilant to ensure that their sales and distribution strategies are in-step with a changing market.
Changing needs
According to recent LIMRA research, more than 7 in 10 employers cite benefit costs as having a significant impact on their benefits strategies and as such, have taken actions to help them manage their programs. More than half negotiated with their benefits providers for better terms, lower premiums, and other cost-related factors. These steps ensure a benefits program which meets the needs of workers in a cost-effective way.
Top Recent Actions Taken by Employers to Manage Benefits Programs(percent of employers)
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As costs and other environmental factors influence benefits decisions, employers are also exploring different approaches to connect workers with the coverages they need, including:
• Introducing wellness programs
• Integrating and coordinating insurance, health, and retirement savings offerings
• Offering workers personalized or customized benefits
• Bundling multiple benefits products with a single carrier or provider, or addressing multiple needs through one product
• Using data to inform strategy, enhance the employee experience, and make data-driven decisions.
These changes require benefits providers to re-align and adjust their approaches to better connect with today’s employers.
Service for success
In an unpredictable environment and an evolving benefits landscape, the conversations that employers are having with advisors, carriers, and others with whom they may work is changing. According to recent interviews conducted by LIMRA, benefits advisors are experiencing first-hand the rapid pace of change. Brokers express that their employer clients are more demanding and focused on the economic value (i.e., ROI) of their workplace benefits programs.
They are also finding that employers are expressing a need for broader support services beyond traditional benefit offerings. Many cite the assistance needed by employers to help vet benefits technologies. As client demands increase, benefits advisors are raising the bar on the services they require from their partners to be successful. Our research reveals that successful benefits advisors leverage a range of support services provided by carriers and other partners to better connect with and meet the needs of their clients. Across all categories of services, carriers find implementation and onboarding support among the services they provide which are most valued by the advisors with whom they work. Other valued services include product training, support from sales representatives, employee education and meeting support, and enrollment technology systems support.
While carriers are aligned in many ways with changing needs, advisors feel that there is room for improvement and opportunities for carriers to differentiate based on their support model and deliver “best-in-class” service. And while there are pockets of success, advisors feel that overall product innovation is lacking. However, they are encouraged by organizations leveraging digital and data-driven solutions in innovative ways (e.g., claims integration, utilization reporting, etc.).
New market opportunities
While advisors and traditional employment models dominate the workforce benefits market, there are growing segments of the workforce which may demand a different approach. Employers are increasingly relying on freelance and temporary workers to meet their talent needs. Contracting these workers allows employers to be nimble in meeting their staffing needs, while managing labor costs. The expansion of the freelance and gig workforce is a potential growth opportunity for benefits providers that can develop innovative strategies to supply benefits to these workers, either directly or indirectly.
At the same time, workforce benefits providers are exploring other go-to-market strategies that provide access to new markets and desired worker segments. These include direct-to-employer models, professional employment organizations (PEOs), multiple-employer plans (MEPs) and pooled employer plans (PEPs), associations, and partnerships with non-insurance providers. These approaches will increasingly be part of the conversation as organizations look for new avenues of sustainable, profitable growth.
Keeping pace with change
It is clear that while the marketplace is changing, workplace benefits remain critical as employers look to attract and retain workers. However, the needs of employers are changing as are the benefits they provide for their workers. To be successful requires a proactive approach to identify, understand, and respond to these changes. Organizations that can remain vigilant and leverage their competitive advantage will be best aligned to deliver meaningful value to their clients and their employees.
Patrick Leary is Corporate Vice President and Director of LIMRA Workplace Benefits Research.
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