If you've ever wanted to be a fly on the wall when two benefits brokers are discussing client strategy (and I admit it, I have), then keep reading. In an exclusive to Employee Benefit News, Jack Kwicien, co-founder and managing partner at Daymark Advisors, recently sat down with fellow adviser Beverly Beattie, founder and CEO of Selden Beattie Advisors, to do just that - specifically, a case study involving a Selden Beattie client. Not to worry, no state secrets are spilled, no confidences broken. But the Q&A does offer benefits pros some food for thought to chew on as they plan their next meeting with their own benefits adviser. -from the Editor

Kwicien: Describe the initial client circumstances and their relationship with Selden Beattie.

Beattie: We have worked with this client for many years; although, for the past five years, one of the large national brokerage houses - that promised more resources, capabilities and expertise - took over the BOR on the medical. We maintained a cordial relationship, providing service on ancillary benefits and the retirement plan, and of course, we were approaching them regularly with a productive/service offering sales approach.

Kwicien: So, what changed?

Beattie: Well, in the last two years, we have become much more strategic in our approach with clients. About nine months ago, we approached the client about creating a benefits strategic plan. Both the head of HR and the CFO were intrigued. They wanted more information about the process - what it would entail and what we would accomplish.

We offered to facilitate a strategic planning meeting with their top four executives and to create a benefits strategic plan for them that would act as a road map for all their major benefits decisions. It would be the starting point for all the tactical decisions affecting their benefits program over the next three-to-five years.

The client had an a-ha! moment; the CFO realized that they had a plan for managing every other aspect of their business except for their benefits program. With benefits being such an expensive line item, generally about 9% to 11% of total operating expenses, he wondered out loud how they had overlooked something so obvious. The client appreciated our approach and wanted us to work with them.

Kwicien: So, why did you bring in Daymark to co-facilitate the strategy session?

Beattie: We thought that the client would appreciate having a team of subject matter experts involved.

Kwicien: After that four-hour session, we jointly had about 15 pages of notes! The executive team was eager to talk about what seemed to be working, what they were trying to accomplish with the money they were spending, and what apparently was broken or at least problematic.

Beattie: Yes, once they got started they really opened up and told us all about their human capital management issues and the role benefits should be playing in their total rewards program. We learned all their pain points and what they really wanted to achieve over the next three-to-five years. It's what every employer should expect from their adviser.

Kwicien: As we know, the overwhelming majority of employers are exactly in that position - having never discussed their benefits from a strategic perspective, let alone having a written benefits road map.

Beattie: I thought that it was quite remarkable. And ultimately, there was consensus - imagine how much of a relief for the vice president of HR that all the issues were out on the table, and that the CEO, COO and CFO all were in agreement with the overall strategy that was developing. It was a thing of beauty to see it all unfold, and the information we gathered was insightful, established critical needs and set priorities. It truly was a road mapping session.

Among the needs we uncovered were:

  • "Despite having a very "rich" benefits program, employees perceived the employer's benefits program to be average or less than average.
  • Employees hadn't been provided a formal methodology for providing feedback about their benefits program or any future enhancements that they may wish to see.
  • Benefits communication needed to be improved and to be more consistent.
  • Employees lacked understanding about how to be intelligent users of their medical insurance program, which was leading to excessive usage of the plan and plan selections with lower deductibles.
  • 401(k) participation was not as high as the employer expected.
  • The benefits enrollment process lacked structure, and only about 60% of the employees participated in group meetings - even though, theoretically, participation is mandatory.
  • While there are a few voluntary benefits offered, a short-term disability plan and a permanent life offering needed to be streamlined.
  •  During the contingency planning phase of the discussion, the CFO acknowledged that generally the organization is risk averse; however, the firm should evaluate what a self-funded option would entail.
  • The employer was seriously considering evaluating for the first time a more state-of-the-art benefits administration system.
  • The CEO and CFO are looking for better benefits accounting.

It was quite an experience. The client truly appreciated that this was very much a client-centric, consultative, needs-analysis approach to understanding and articulating their needs.
Kwicien: Armed with that information, we then developed strategies and action plans to address each of their issues.

Beattie: Within a matter of three weeks, we delivered to the client a written plan document that outlined all the critical issues and our strategies for dealing with them, including contingency plans.

Kwicien: How did you feel about the interaction and what we learned?

Beattie: It was just a very enlightening experience all around. Even though we worked with this client for a number of years and handled some of their ancillary group coverages, we learned so much about their business issues, their human capital management challenges and what they wanted to accomplish strategically with their benefits program. It was really eye-opening, not only for us, but for our client as well.

The information and insights that were developed are invaluable, and we could not have achieved that level of interaction with our client in the normal course of our day-to-day interaction. We had their undivided attention and "mind share" for the entire time, and we came away with a number of critical issues directly impacting what they were trying to achieve with their benefits program or that wrapped around their benefits offerings.

Kwicien: Well that will make your life easier, since you walked away with your "marching orders" and a clear direction for each major initiative that we discussed. And you have documented where the benefits program is today and what they want to accomplish in the future. Not everything can be implemented in the first 30 days following client approval.

Beattie: Correct. In fact, some of our recommendations will be implemented later this year, while others will be addressed in 2012 and 2013. And if circumstances change along the line, which inevitably they will, we will make appropriate course adjustments and document the changes or new initiatives to be responsive to the new business needs.

It's all really quite methodical, which increases a client's confidence level in the process and the validity of the recommendations.

Kwicien: While we can't get into all the detail included in your final recommendations, can you capsulize some of the major goals that were articulated in your plan?

Beattie: Perhaps I can succinctly summarize a few categories that we addressed. Among them were:

  • Plan redesign.
  • Wellness plan integration and optimization.
  • Expense management and cost containment.
  • Contingency planning.
  • Improved benefits communication strategies.
  • Strengthened benefit enrollment process.
  • Intelligently integrated voluntary benefits.
  • Improved management information.
  • Enhanced some existing benefits offerings.
  • Recommended state-of-the-art technology enhancements.
  • Advocated HR consulting solutions.

As you can see it was quite encompassing. And each major initiative had its own action plans and timelines associated with it. So it really provides a detailed road map for the client and our team. - E.B.N.

HR puts stronger emphasis on pay More than 40% of senior human resources professionals at financial services firms identified a stronger focus on pay issues over the next 12 months than on other HR changes, according to a poll conducted by Towers Watson.

The survey respondents noted risk adjustments to financials or incentive pools as the most expected shift in pay policies, and a focus on pay issues rather than other changes, such as linkage of deferred vehicles to business unit performance (16%) or longer vesting periods (15%).

More than a third of the 130 respondents noted pay issues as the most important HR priority, followed by talent acquisition (23%) and the redesign of the employee value proposition or "deal" (20%). Further, two thirds of the group believe that public officer executive base salary levels have not yet stabilized, while there was general agreement that base salary levels for lower-level employees have stabilized.

The survey respondents noted their views on the likelihood of regulators increasing the degree of global coordination in approaching industry regulation, with just over half believing they would.

Chris Fabro, global co-lead of Towers Watson's talent and rewards financial services practice, said, "The financial services industry is beginning to reshape itself in response to altered business environments and strategies. Many of these organizations need to fundamentally align their talent management and workforce practices to shifts in the business environment. Top of mind will be pay strategies that reinforce the desired culture; ensure market competitiveness; differentiate among people's roles, skills and performance; and deliver the right employee behaviors at a cost the organization can afford."

Pat Speer writes for Insurance Networking News, a SourceMedia publication.

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