In concert
y the end of Q1, the majority of
employers had thrown their business projections for the year out the window. They cut production, sent workers home (either on furlough or to work remotely), reexamined their revenue projections, and so much more. But they didn’t question their relationship with their benefits advisor and their benefits strategy. Despite the momentous shifts our country has undergone this year, the results of our annual Employer Survey suggest employers’ trust and confidence in benefits consultants is holding steady.
This year, we heard from an audience made up of HR/benefits managers (50.9%), HR directors (15.3%), small business owners (15.3%), C-suite executives (6.8%), vice presidents of HR (6.8%) and benefits analysts (5.1%). The majority (87.9%) use benefits brokers or consultants, where we continue to see an even split between fee- and commission-based relationships (44.6% and 55.4%, respectively). Let’s take a look at some of this year’s other key findings.
The results of this year’s BenefitsPRO Employer Survey show that not even a pandemic can create discordance in the employer/benefits broker relationship.
By Emily Payne
Design by Chris Nicholls
B
y the end of Q1, the majority of employers had thrown their
business projections for the year out the window. They cut production, sent workers home (either on furlough or to work remotely), reexamined their revenue projections, and so much more. But they didn’t question their relationship with their benefits advisor and their benefits strategy. Despite the momentous shifts our country has undergone this year, the results of our annual Employer Survey suggest employers’ trust and confidence in benefits consultants is holding steady. This year, we heard from an audience made up of HR/benefits managers (50.9%), HR directors (15.3%), small business owners (15.3%), C-suite executives (6.8%), vice presidents of HR (6.8%) and benefits analysts (5.1%). The majority (87.9%) use benefits brokers or consultants, where we continue to see an even split between fee- and commission-based relationships (44.6% and 55.4%, respectively). Let’s take a look at some of this year’s other key findings.
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Respondents are still communicating with their broker multiple times per week (28.6%) or month (also 28.6%), and very few (14%) would consider dropping their broker and going it alone. More respondents this year said they wouldn’t consider a change (40.4%) compared to last year (27%), though cost is becoming less of a reason to switch, and we’re instead seeing more emphasis on better product offerings and better technology. The right technology is still a must-have, and something HR pros discuss with their brokers on a regular basis. The majority are satisfied with that rate of communication. Despite the increasing pace of new HR and benefits technology hitting the market, more than half (58.2%) have not made any changes in their technology vendors or services in the past year.
The employer-broker relationship
How often do you communicate with your broker?
Top factors when considering changing brokers:
Once a day
Multiple times per week
Once a week
Multiple times per month
Once a month
Multiple times per year
Once a year
5%
29%
7%
29%
7%
21%
2%
1. Better product offerings
2. Better technology
3. Cost
4. Better communication
2020
1. Cost
2. Better product offerings
3. More consultative approach
4. Better communication
2019
34%
25.5%
23.4%
21.3%
56%
51.2%
26.2%
23.8%
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Not surprisingly, the percentage of employers offering remote work has increased, with 83.3% of respondents saying they offer it this year compared to 51% last year. Flexible work hours are also gaining ground, with 60.4% of respondents offering them. But despite overall growth of the gig economy, 66.7% of survey respondents say the use of external workers has stayed the same. Paid leave has been another hot topic this year and will continue to be an area of opportunity where benefits brokers and advisors can offer additional guidance. Employers continue to evolve their offerings in this regard (though paid leave for pets remains slow to catch on), and the majority of respondents are offering paid sick leave separate from PTO. And while 42.9% of respondents say their paid leave is on par with industry standards, 16.3% don’t know how it compares. Of greater concern to respondents is whether their paid leave policies are in compliance with state and federal regulations.
The nature of work
Which of the following flex benefits do you offer?
Which factor has the most influence on the design of your paid leave program?
83.3%
60.4%
20.4%
12.2%
Remote
work
Flexible
hours
Condensed
work week
None
Complying with state, local and/or federal regulations
Creating an advantage to recruit/retain new workers
Building a company culture that encourages a strong work/life balance
Other
44%
34%
14%
8%
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Though employers might be tightening their belts in some areas, employee benefits isn’t one of them, with two-thirds of employers saying they won’t be pushing additional costs onto employees this year. Compared to last year, fewer employers reported a significant increase in benefit-related costs (11.1%), and more say they’ve stayed about the same (29.6%) or declined significantly (9.3%). Still, 38.9% say they’ve increased some, despite more discussions about cost-saving strategies such as reference-based pricing, direct primary care and bundling.
Respondents this year also reported they were considering expanding wellness/disease programs, as well as mental health and learning and development. Despite the complications created by online schooling during the pandemic, however, caregiver benefits remain low on the list.
When it comes to health savings accounts (HSAs), the majority of respondents (36.36%) say that 26%–50% of employees are taking advantage, compared to last year where the majority said just 1%–25% were. Whether this trend of increased participation rates continues in future years remains to be seen; 47% of respondents anticipate that changing regulations related to HSAs, flex spending accounts and health reimbursement accounts will impact their benefits planning in the coming years, while 37% aren’t sure.
As employers brace for continued business disruption and look for new solutions to adapt to a changing world, the role of the benefits broker will grow even more essential. Benefits brokers looking to stand apart will need to provide not only industry-leading solutions in core benefits, but also become experts in related areas, such as compliance, HR technology and wellness.
In control of costs
Which of the following cost-saving strategies has your broker discussed with you?
Percent of respondents ranking each of the following benefits as “vital”
Which of the following benefits or programs has your company implemented or considered implementing?
Reference-based pricing
50%
Direct primary care
45%
Bundled payments
30%
Direct contracting
32.5%
Other
37.5%
64.7%
23.5%
18%
Health insurance
Life insurance
Dental
Vision
Short-term disability
Long-term disability
15.7%
13.7%
17.7%
Wellness/disease management programs
More robust mental health resources
Caregiver benefits
Learning and development programs
Other
75.6%
53.3%
24.4%
37.8%
11.1%
As employers brace for continued business disruption and look for new solutions to adapt to a changing world, the role of the benefits broker will grow even more essential. Benefits brokers looking to stand apart will need to provide not only industry-leading solutions in core benefits, but also become experts in related areas, such as compliance, HR technology and wellness.
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