A new reward landscape requires new types of relationship
I’ve been involved in employee benefits for 20 years now. Recently, I’ve had time to reflect carefully on what’s happening in our industry and what it means for the future of reward.
The employee benefits world is being disrupted like never before. Product innovation, technology and regulation are all changing relentlessly. That rapid evolution should mean employers and employees can embrace the changes and get the best possible deal from their suppliers.
But the current benefits purchasing model is often focused on brokers ‘owning’ the relationship with employer clients. Providers are unable to connect with businesses directly – and that doesn’t always work to the employer’s advantage.
As an example, when was the last time you met directly with your pension provider to hear what they can offer you? Pension providers spend millions on tools that are designed to engage the members of your pension scheme. Better engagement is what you, the pension provider and ultimately the member wants. Those interests are completely aligned. But how many of those tools actually make it through to your employees?
There is a real opportunity here to embrace a three-way partnership of employer, broker and benefit provider that is focused on doing the very best thing for employees. However, creating that three-way relationship requires a level of transparency, trust and collaboration that is very rare at the moment. Why would an employer not want to know about the latest developments and engagement tools that pension scheme members can access as part of a wider communication strategy? But can you say that you do?
Could the relentless pace of change in benefits disrupt the traditional broker-driven model? Pensions changed forever when auto enrolment was implemented, and the medical benefits market is fast evolving with fantastic engagement tools being built by some hugely innovative startups.
But there is often little incentive for brokers to partner with startups across a fragmented market, as it yields little or no revenue for them.
As such, businesses are not always getting a view of the market as a whole and stretched resources in reward teams mean employers are unable to research the fast-changing market for themselves. Taking full advantage of the new reward landscape means building new types of relationship with brokers and providers alike. Ask the right questions, push the right buttons and work out what you aren’t hearing as well as what you are.
Alan Fergusson is Managing Director of beneficia
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