The Millennial Broker’s Foresight

My mother has been a New York State Life-Accident-Health licensed insurance broker for as long as I have been alive, with a career in Employee Benefits spanning over 30 years. She helped her groups survive the tumultuous arrival of ACA and regularly outmaneuvers the likes of shiny new-fangled benefits software and online DIY benefits programs.

As a youngster I grew up hearing about the exotic sounding concepts she regularly detailed with the CHRO or CFO of that moment.  Seeing her expand her knowledge and respect among her peers and within the benefits industry has been the biggest inspiration on my current role as a benefits consultant.

To this day, she’s at the top of her game and as a mom and occasional career coach, we regularly chat – see argue – about benefits. She is the only person who can affectionately make me feel like a little boy walking clumsily in his dad’s shoes once taken to task. Challenge accepted!

As a professional consultant I invariably walk into meetings with clients represented by HR professionals of various titles and areas of proficiency. Once the renewal or sale is negotiated and I’ve designed the client’s health plans, solved their employee contributions to budget and provided an open enrollment timeline, I am reminded that I am at the periphery of a much bigger picture: Total Compensation.

I then take my client to lunch and she’ll casually chat about things that touch upon the margins of my current expertise. How does the benefits program speak to the bigger picture of company culture? Dogs or no dogs? What kind of liability is involved if there’s a bite? Executive medical plan or a bonus for top performers? How can their U.S. division afford to match the luxurious, socialized benefits that their foreign national employees enjoy?  What are the pros & cons of unlimited PTO?

Now she needs to fly to Hong Kong to tie her company’s Asian and American benefits programs together with yet another consultant. As the chat moves away from domestic benefits to broader HR topics, I have less and less to add as her trusty benefits consultant. A respected mentor of mine would call this a “low hanging fruit” of an opportunity.

It’s a cue that to the HR director that my area of specialization is a link in a larger chain and now that the client’s benefits pains have been resolved, it’s only one check mark on the total rewards agenda. The compensation universe is broader than health plans, financial spreads and salaries. This budgetary line item is a critical part of a company’s identity and the metronome of prosperity during a company’s expansion.

As of June 2017, the Bureau of Labor Statistics determined that private employer costs for employee benefits averaged around 30.4% of total compensation nationwide. It’s no wonder why even the most tenured HR experts seek the outside consultation of a broker to navigate this specific area. We’re trusted to advise clients on 30% of their bottom line, but what about the rest of that line? To remain competitive as brokers, we should partner with clients on closer to 100% of the line by diversifying our total offering.

Yes, I understand that benefits is an area of specialization within an area of specialization within yet another area of specialization. Regardless, it baffles me as to why certain schools of thought see benefits as something removed from human resources. Sure, it’s insurance but it’s the insurance of humans.

I have lost count of the number of dinner conversations where I have to explain that I “kinda work in HR but not really”. “It’s insurance,” I explain. “Oh, like Geico?” – No, not like Geico, I handle employee benefits for businesses like medical and dental insurances. “So you’re in Human Resources?” Well, not exactly, not completely.

The mounting influence of benetech/insurtech is increasing pressure on the traditional broker to remain agile as a business partner. History can tell us what happens when an industry doesn’t remain market responsive. Look no further than travel agencies for a tale of caution. The professional travel agent didn’t evolve enough to sustain a demand for narrow services and eventually was left to dance alone.

Millennials have sent shock waves through several industries in the last 10 years with their penchant for emergent solutions over the tried and true. Insurance is no different. There is tenacious appetite for different channels of insurance marketing and sales. Brokers being the conduits of these products would be practical to offer more comprehensive solutions to clients.

One of the hottest topics on the cusp of HR/Benefits are the added services that a broker is now expected to provide. Technology, consultation, market analysis and administration. But how about a bedrock partnership? The next step?

HR consultancies already offer broker services. This is nothing new. However, the velocity of their market consumption is hastening with the advent of newer tech solutions. Where is the skillful response from the great brokerage houses of our era? Why not strategize from the compensation perspective and carve out the larger partnership? Technology will never be a total substitute for human capital management.

The more we innovate and add to our suite of services the more irreplaceable we become as consultants for clients who would otherwise compartmentalize benefits services. If we only touch upon the edges of the client’s needs, the ambitious tech-native consultancies will gladly find a way to code a solution into their offering before the market can respond.

In order solidify our consultative role with clients, we need to understand HR’s goals by knowing how benefits fit into the bigger picture. That bigger picture is designed by the CFO who assigns the budget to HR and it all falls under the total rewards domain.

About Jonathan Mentor

As a licensed Employee Benefits Broker, I consult employer groups of all sizes on how to navigate the complexities of employee health, wellness, insurance and rewards. My professional network and curiosity have taken me across the country in search of disruptive and exacting solutions in response to my clients need to remain on the cutting edge of employee benefits.

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