5 Common Mistakes to Avoid When Hiring a Benefits Broker
Finding and hiring a new benefits broker is a tricky process. Hire the wrong benefits broker, and your small to midsize business may end up with lower quality benefits, waning employee engagement, and a low ROI. But we've got you covered with this guide to recognizing (and avoiding) common mistakes when hiring a broker.
As a small to midsize business owner on the hunt for a new employee benefits broker, you might be tempted to approach the search similar to how you might hire any other vendor. Review several benefits broker’s credentials, meet for an interview, pick one that seems the most qualified, and hope for the best.
But hiring a benefits broker is just … different. (Way different.)
That’s because your choice of benefits broker impacts a lot, from the quality of your benefits package, to your ROI and budget, to your employee satisfaction. Not to overhype this, but the stakes are high – and it’s all too easy to make a broker hiring mistake and end up with the wrong fit.
While changing your broker is always an option (and you can make that change at literally any point in the year), it saves time and money to get it right on the first try. Many of our clients have been in your exact situation and suffered massive oversights that cost them in the long run.
By avoiding some of these mistakes, you can ensure the success of your benefits offerings right from the start.
Mistake 1: Not understanding your employees’ benefits needs first
Your employee benefits broker should offer a level of service that can flex to meet your employer’s unique needs. But before you can get there, you need to know what those needs are in the first place.
Here are some questions to answer before you move forward:
- Offering medical, dental, and vision benefits is table stakes for any employer – but what levels of coverage would offer your employees the most value?
- What types of ancillary benefits would be best suited for your employees’ needs?
- Which benefits funding strategy are you pursuing (and are you sure it’s the right one for you?)
- What are your company values, and how do you want your benefits to support them?
- What budget can you allocate to your benefits?
Then what about your additional perks and "goodies" greatly enhance your team's everyday life. This, in turn, boosts morale and workplace culture! To get started, identify what areas need strengthening and pinpoint where your next broker can really shine.
Not sure what your employees need from their benefits? Ask them! Employee surveys are a great way to start.
Mistake 2: Hiring based on price alone
You know what they say – you get what you pay for. Hiring a broker strictly based on their lower price can end up costing you more in the long run.
Your benefits broker is an investment in your business and your employees. Choosing a broker with the right tools and experience can result in big long-term savings for your company – both in terms of time and budget. Trust us, your wallet (and your employees) will thank you later.
One big thing to keep in mind here: All brokers have access to the same pricing for the same insurance plans — so their value really comes in how they build offerings and support your team.
In short, don’t just look at the price tag. Consider the full value they’ll bring to your team.
Mistake 3: Not vetting your candidates with other HR pros
The HR community is your best resource when determining which broker is worth your time. After all, a great broker should be a close partner to their clients’ HR teams – so you shouldn’t settle for anything less than a broker who seamlessly supports your HR friends year-round.
Reach out to your HR friends (or turn to virtual HR communities) for their opinions. If they don’t have great things to say about a certain brokerage, you should probably take their word for it.
Mistake 4: Choosing a brokerage based on its size or name
Bigger doesn’t always mean better — especially when it comes to benefits brokerages.
Larger brokerages may offer a wider range of services, but they can also be impersonal and less responsive to your needs. On the other hand, smaller brokerages may provide you with more personalized attention.
On top of that, small to midsize businesses have very different benefits needs than larger employers. So if you’re choosing a brokerage for an SMB, then you need a partner who understands your unique needs. The right benefits broker for small businesses will know how to make the most of your smaller budget and will be proactive about providing you with support year-round.
Mistake 5: Going with a traditional brokerage with outdated tools or processes
The brokerage space has been slow to innovate. For this reason, many traditional brokerages still use outdated and inefficient tools.
When you're making big decisions, accurate and real-time information is key. Look for a broker who knows their tech stuff to help you navigate the benefits landscape and save precious time, money, and bandwidth.
Above all, remember that brokers aren’t one-size-fits-all.
When it comes to finding the right broker for your small to midsize business, it pays to do your homework and make sure you get the most coverage and best bang-for-your-buck benefits.
After all, this is an important decision affecting your greatest asset: your employees.
But no matter what route you take, just know that avoiding bad broker behavior is the first step towards smooth sailing and successful benefit implementation.
Ready to start your search? Schedule a free benefits assessment with our experts today.