Benefits pros come together to move the industry forward

The National Football League is a financial juggernaut in part because of a revenue-sharing model in which a team in tiny Green Bay can compete with those in major markets like New York and Los Angeles. By contrast, the structure of Major League Baseball too often fosters an “us-versus-them” environment in which large-market teams typically dominate while those in smaller markets struggle.

The benefits industry has also leaned into a large versus small mindset at times when it comes to advisors and brokerages, rather than enabling a rising tide to lift all boats.

“I have noticed this on occasion and it’s interesting, because when I first started in the industry, I had the opportunity to join a lot of meetings with experienced sales reps where I learned the good, the bad and the ugly,” says Heather Garbers, senior vice president, voluntary benefits, for HUB International. “The biggest lessons I learned are that the most successful people always sell their solution because it is the best and because they believe in it. They don’t sell against their competitors; that’s a bad look. Insurance is a small community and your competitor today may be your coworker or client tomorrow.”

Lester Morales, founder and CEO of Next Impact, has also seen this David and Goliath mentality at times.

“Some of this is warranted, because the two models are drastically different,” he says. “There are amazingly talented people at both large and small brokerages who make it their daily mission to do everything in their power to add value to employer clients and their employees.

There are also people at both large and small brokerages who try to do the least amount of work, get paid the most compensation, and who add very little value to their employer clients and employees.”

In other words, it’s the quality of people, not the number of them, that makes all the difference. “Both types of institutions have the opportunity to deliver first-class advisory and support around human capital, total rewards and all things employee benefits,” Morales says. “The value provided to an employer is 100% predicated on the team. Whether at a small or large broker, they must have the employer’s best interest in mind, a mindset of collaboration and innovation, and the desire to work hard and drive value for that employer in order to achieve success.”

But the size discussion sidesteps a more important issue, according to Taylor Lindsey, vice president and advisor for Employee Benefit Consultants.

“I believe the biggest challenges are the business models themselves, not the size of the agencies,” he says. “Typically, but not always, the larger and publicly traded firms have obligations to increase shareholder value. The way revenues are generated can be stagnant and might not align with the client and the results they generate for the clients. This can create misaligned incentives that go against increasing shareholder value.

“Although there are exceptions, the smaller and independent firms are often nimbler and more willing to adapt to strategies that serve organic growth and are more mission-aligned. But no matter the size, it all comes down to the alignment of the compensation and the business model.”

Defining a business only by the employee headcount can lead to preconceived approaches; but all too often, one-size-fits-all strategies end up fitting none.

“There isn’t a single carrier that I would say is the only carrier to work with or a single product or technology that I would say is the best in the marketplace,” Garbers says. “Taking a consultative approach to identifying and providing solutions for your clients’ needs is the very core of our job.”

Lindsey takes it a step further.

“We believe that a one-size-fits-all approach is what has driven health benefits into the mess we’re in now,” he says. “That’s not what the clients want and definitely not what they deserve.”

What if, instead of looking for a competitive advantage based on their size, large and small brokers learned from each other’s strategies?

“I absolutely believe that we should all work together in some capacity,” Garbers says. “I learn so much from my ‘competitors’ (I call them friends) and am grateful that I can call them and ask if they’ve ever run into a certain situation, what they think of a new vendor, or how they are addressing a new piece of legislation. Broker advisory boards are a great way to show this concept in action. Carriers often bring in a group of ‘competitors,’ present potential new solutions and request guidance on issues, and then take that feedback and put it into action.

Oftentimes in those meetings, we find that we are not isolated in our theories and struggles, and we brainstorm ways to overcome them together.”

Lindsey agrees.

“We believe in innovation and total transparency,” he says. “It’s up to the benefits advisors to shape the shifts that this stagnant industry needs and that the employers deserve. Forget about your competition; do what is right by your client and focus on the outcomes you can provide.

“The time has come for the industry to band together to overhaul massive change. The early adopters of value-based benefits design face challenges around adoption. When more and more employers adopt these strategies, it becomes more comfortable, easier to adapt and fine-tune, and even easier for providers to align themselves with the true payers of health care, the employers.”

Again, it comes down to shifting the conversation away from the size of the broker and focusing on the client.

“I’m not sure that we have two clients doing the exact same thing,” Lindsey says. “There are several employers using a similar approach for their benefits, but each client is different. Our goal as a benefits consulting firm is to address each client’s needs, build a custom solution for them at that time, and uncover what needs to be tweaked along the way to achieve their goals.”

Morales takes the same approach.

“It’s all about the employers’ challenges, goals, objectives and employee makeup,” he says. “A white-collar, highly paid professional services company has different needs than an agricultural company. Why would they offer the same benefits? And your service provider partners can’t be the same for 100% of your clients either. Partners have varying levels of expertise in types of programs; specific geographies and industries; and the personality differences between key members of the employer and service partner teams make a huge difference in the program’s success.

“In my opinion, education is the way we will create the most significant impact. A client might not be ready to run in the crawl-walk-run mentality, but rolling over is better than lying dead and expecting things to change.”

Read more: The change & disruption of 2022, as opportunities grow heading into 2023

Unlike professional sports, cooperating and deploying the proper strategies enables every benefits advisor to be a winner.

“As an industry, we will thrive if we work well together in the community,” Garbers says. “I think the us/them mentality in many cases holds our industry back and makes it stagnant. But working together toward a common goal fosters innovation.”