Employee benefits competition has traditionally been defined by cost – all things being equal, the most affordable provider usually got the enrollment.
But that was then. Now, as health care reform, health care inflation, the emergence of voluntary benefits, and increased cost-shifting from employers to employees changes the benefits landscape, there are new opportunities to make benefits offerings more valuable for employers. Convenience, simplicity, and increased employee satisfaction are some of the values that producers can now emphasize.
To consider how value replaces cost as a factor in purchasing decisions, look no further than your friendly neighborhood Walmart and Target stores. For years, Walmart defined itself by price. Store design and layout was an afterthought, and products were stacked high to the ceilings. The shopping experience basically consisted of saving money.
But then, Target made a push to differentiate itself by making the shopping experience itself a value, with stores that had a more contemporary look and design. Target's brand was still big-box and low-cost, but consumers could enjoy the experience as much as the cost saving. Walmart is still the leader in the big-box market, but Target is a strong second, and Walmart now brings more attention to design and layout to its stores. The shopping experience has become an important value to consumers.
How does that translate to benefits? The enrollment process is a shopping experience that many employers dread because of the paperwork, the complexity, and the strains on HR resources to process benefits from several carriers. But if a broker can make the process easier and less time-consuming for the employer, that clear value may rival cost.
