When offering perks to your employees, you want to make sure you’re choosing the ones that’ll have the most impact. After all, what’s the point in providing cycle to work schemes if most of your staff are more interested in workplace nursery schemes?
This is where a benefits broker usually comes in. A benefits broker can help you select the perfect benefits package for your team. But does your company need one?
Read on to learn more about how benefits brokers work, if they make sense for your business, and what your other options are.
What is a benefits broker?
A benefits broker is someone who is dedicated to reviewing your current benefits offering, obtaining quotes to get you a better deal and providing guidance on products to add to your package.
Let’s say you’re thinking about offering life insurance as part of your benefits package. Group life cover usually pays an employee's family a lump sum if they pass away while working for you, and the payout is typically a multiple of the employee's salary. A benefits broker can step in to offer advice on a suitable percentage and help you compare quotes to get the best policy for your company budget.
How does a benefits broker work?
The beauty of benefits brokers is that they have in-depth knowledge of the market and which perks matter most to workers, so they’re well placed to help you create an attractive employee benefits package.
You’ll start by helping them understand your business and employees’ needs. They'll then provide advice about suitable products (mainly insurance, like income protection and life insurance), obtain quotes and help you to review them so you can find the right deal for your company.
They’ll also help to review your benefits at renewal stages and negotiate policy terms. For example, maybe you want to keep offering a generous pension, but you think you could get a cheaper price from a different provider. This is where a benefits broker can provide value.
If you’re wondering how they get paid, benefits brokers either charge a fee per service or a percentage of commission. In a fee for service structure, brokers charge a fixed fee so they’re more likely to offer impartial advice as they do not have any preference towards a particular provider. Brokers who work on commission, on the other hand, may recommend a provider who offers them a higher commission payout.
Pros and cons of using a benefits broker
Deciding whether to work with a benefits broker depends on a lot of factors, including your budget, your knowledge of the benefits market, and how much time you have on your hands. Here are some of the pros and cons to help you make an informed decision.
Advantages
To start with, benefits brokers know the market inside out, so they’re familiar with the providers on offer and can bring you the best deals.
For an HR team, contacting providers and getting quotes can be time-consuming and might not be high on your priority list, so a broker can save you time with this.
They’re also likely to save you money, as they have access to policies from across the market and deals that you might not otherwise know about.
Plus, insurance policies often contain confusing terms and industry jargon. A broker can help you understand what you’re getting yourself into and explain the difference between various policies to help you make the right choice.
Disadvantages
As we mentioned earlier, brokers who work on commission might be more inclined to present you with more expensive options depending on what will provide them with more money, so be wary of this.
While they’re useful for securing policies in the first place, they can’t help with the actual administration of benefits once you’ve got them on board. So monitoring the use (and success) of each benefit is something HR will need to do.
How a benefits platform can help
A benefits broker might tick a few of your boxes, but a benefits platform might be just what you’re looking for. Did you know that a robust benefits platform does all the communicating with brokers so you don’t have to? It’s sort of like the middle man, saving you time so you can focus on more important things.
With a platform like Ben, all of the steps needed to offer employee benefits are managed in one place. We’re not just talking about working with the broker, but the admin as well. We work with a variety of third parties to bring the perfect benefits to your team (we can offer a wide range of benefits, not just insurance products). Then, your employees can view a whole catalogue of benefits all in one place, making it easy to opt in and out of the benefits they wish to spend their allowance on.
Once you’re up and running with your benefits, we automate away all the tedious ongoing bits. Think automated enrolment request approvals and easy to set-up connections with your accounting and payroll software. Plus, with built-in insights and reporting, Ben shows you exactly how and where your benefits are being used, so you can make sure your staff are making the most of their work perks.
It’s up to you whether you work with a benefits broker or all-in-one platform, but there are a lot of steps involved in setting up a benefits programme yourself, from getting buy-in to creating a proposal (don’t say we didn’t warn you).
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