Benefits Brokers are More Valuable to HR, when their Role is Viewed from This Angle
Voice on the Phone: We haven’t talked in a while, so tell me – how’s your new venture coming along?
Me: Its moving in the right direction, I feel like I’m gaining momentum, but a little slower than I expected!
Voice on the Phone: What was it that you’re trying to do again?
Me: I’m trying to start conversations with employee benefits brokers on why their attract & retain strategies should be linked to a recruit & hire solution.
Voice on the Phone: Sounds like a good idea, so what’s the problem with that?
Me: My view of the Industry is from a different angle than most brokers. And what I see – is that brokers are overlooking a huge opportunity to better help their clients and help themselves, as a result. It’s a huge opportunity because it involves the same values that are very important to brokers, such as retaining their clients, getting more BOR letters, and maximizing the revenue from their book of business!
Voice on the Phone: And?
Me: In order for the brokers to see this opportunity, they will have to visualize the employee benefits game, from the angle that I see!
Voice on the Phone: So, what’s your angle, again?
Me: I started my career in the insurance industry, and after a few years I transitioned to the recruiting Industry. And guess who I specialized in recruiting for over two decades?
Employee benefits consultants!
So, I understand how both the attract & retain and the recruit & hire parts fit together; and I also understand the impact on how technology is affecting traditional methods of doing business.
Here’ what I want the brokers to visualize in order to see this opportunity.
The first thing that I want them to visualize – is a circle. That circle represents one of their clients.
Their client’s main objective is to grow their business. And their best method – is to hire talented employees for every job vacancy, in order to be the dominant competitor in their marketplace.
The second thing I want brokers to visualize – is a vertical line that is directly in the middle of the circle. That vertical line separates the two most often used strategies for hiring talented performers – attract & retain and recruit & hire.
The left side represents the clients attract & retain strategy, and the right side represents their recruit & hire strategy. What’s interesting is that both strategies are under the direction of the same HR leader.
Attract & Retain
The attract & retain strategy is executed by the broker. The broker uses group health insurance, voluntary benefits, wellness & disease management vendors – along with ingenuity to enhance the overall benefits to the employees and reduce the cost of providing those benefits to the employer.
Recruit & Hire
The recruit & hire strategy is executed by a recruiter. This function can be accomplished either in-house or outsourced to a recruitment agency, but most employers chose the in-house option because they believe that it’s the cheaper route. The inhouse recruiter uses job aggregators like LinkedIn, Indeed or Zip Recruiter to create an immediate pool of job applicants for each job vacancy. And, he/she also uses an applicant tracking software to screen and select the most qualified candidates to be interviewed, from typically hundreds of job applicants.
The Imaginary Wall
The vertical line is the most important. It represents the imaginary wall that separates the broker from the recruiter. It’s like that big beautiful wall that America will build and Mexico will pay for. Its huge – it blocks the broker and recruiter from seeing what each other is doing. The wall prevents them from being aware that they are both on the same team and they both report to the same HR leader.
Voice on the Phone: Interesting!
Me: Here are the problems that the imaginary wall is causing for the HR leader, and why I believe it creates a huge opportunity for the broker. The broker is successfully executing his attract & retain strategy, but the recruiter is not executing on the recruit & hire strategy. If this was a football game, it would be like the Defensive Unit is consistently providing the Offensive Unit with great field position, but the Offensive Unit is consistently unable to convert those scoring opportunities into points-on-the-board. Make sense?
Voice on the Phone: Yeah, but do you know why the recruiter is not successful in executing the recruit & hire strategy?
Me: Of course, the recruiter is using outdated methods for screening and selecting qualified job applicants. The best example, is pouring a gallon of water into a small cup. The volume of job applicants from each job vacancy is too overwhelming to be properly screened-manually, and it’s almost impossible when the recruiter is trying to screen applicants for multiple job vacancies, at the same time.
Voice on the Phone: So, what problems does the wall cause for the HR leader, again?
Me: Are you kidding me – they are continually making a lot of bad hires. It is bad hires that cause high employee turnover, not the millennials. Bad hires also cause poor productivity, loss of customers and it balloons talent acquisition costs – especially when they have to keep filling the same job vacancies on a recurring basis. I’m not putting the blame on the in-house recruiter, it’s the outdated screening process that is to blame. Also, it takes way too long, many qualified applicants end up falling through the cracks, and very often – finalist candidates exit the interview process because they accept offers from other employers. Or, they will accept the offer and later decline it – after they receive a counteroffer from their present employer. When this happens, the in-house recruiter has to start the entire process all over again – and a lot of times, may end up with the same results. Those are the problems that are keeping HR leaders up at nights.
Voice on the Phone: Wait. The broker is on the other side of the wall, how’s this an opportunity?
Me: Good question! Since the broker is typically paid by the insurance carrier, and not from the HR budget – s/he remains unaware of the huge fees of the HR budget that is spent on the recruit & hire side. Or, the additional fees s/he could generate from recruitment vendors.
It’s a no-brainer decision for the broker because s/he doesn’t need to be licensed in recruiting, or be an expert on recruitment issues, or is expected execute any hands-on recruitment functions. The only expectation is to incorporate a recruit & hire solution just like any additional employee benefits offering.
Recruit & Hire Solution
Interestingly, this technology was developed by a veteran employee benefits consultant. It was designed to do all the manual, repetitive applicant screening type work. Its function is similar to the spam filter from the typical email provider – it automatically detects any unsolicited emails and forward them directly to the junk mailbox folder. The applicant spam filter automatically detects unqualified job applicants from a huge pool of job applicants. It identifies the best applicants, as they apply to a job vacancy.
Another benefit – is that it can revolutionize a simple employee referral program into a super referral program. It encourages more participation from employees, by converting the referral process into a fun game and an easier way to refer others. Instead of additional taxable income to the employees, the referral reward can be allocated into an additional employee benefit, such as an employee wallet or a flexible spending account or funds to pay student loans.
Voice on the Phone: Sounds very interesting. So, how do you make money with this?
Me: Employers will pay an annual subscription fee to leverage the span filter applicant screening capabilities. In addition to that, our revenue model is to sell qualified job applicant leads ($199/lead) to employers for their job vacancies. We generate qualified leads by using artificial intelligence technology to curate multiple job applicants from multiple job vacancies and then use a machine learning matching algorithm to link the right job applicant to the right employer’s job vacancy. Those applicants are recommended as possible leads, similar to the method Amazon and Netflix use to recommend products and movies.
So, when the broker links her/his employee benefits strategy to our recruit & hire solution, s/he is also helping clients, hires talented performers for every job vacancy and also building their own pipeline of cultural-fit, interview-ready candidates. Their clients will never run-out of qualified candidates to interview, and it’s a lot faster and cheaper than having to start the entire process all over again.
Voice on the Phone: So, why don’t you approach the in-house recruiter instead of the broker?
Me: The short answer is that the recruiter will simply view this technology more as a threat to her/his own job, than a better solution for his employer. But if presented correctly, the broker will view this technology as method to solidify and expand he/his role/relationship as a trusted advisor to clients.
Voice on the Phone: Sounds great – good luck with that!
