Do You Need to Hire an Employee Benefits Broker?

Prioritizing employees’ wellbeing means fewer sick days, better engagement, and higher retention rates. Offering comprehensive benefits is one way employers show their commitment to employee wellness.

But did you know employee benefits account for anywhere from 25–40% of your total compensation costs? Aside from the cost, making sure you’re in compliance with government regulations around employee benefits like health care can be a real challenge.

Imagine having an expert on your side to help you navigate the complexities, save time, and ensure every dollar is spent wisely. Enter the employee benefits broker—your secret weapon for optimizing this significant investment.

A benefits broker can help businesses attract and retain talent by helping you design a total compensation package that’s appealing to employees and prospects and affordable for your business.

Curious about how an employee benefits broker can help turn a compensation headache into a no-brainer? Read on to learn everything you need to know about what benefits brokers can do for your company—what they are, what services they provide, and how they can help you design the ideal benefits packages for your employees.

What Is an Employee Benefits Broker?

An employee benefits broker is a third-party consultant who helps businesses select, manage, and negotiate benefits packages for a fee. According to SHRM, benefits broker is the accepted term for what used to be different kinds of service providers: brokers, consultants, and advisors. The distinguishing factor used to be whether they worked for a fee, commission, or for free, but the terms are now used interchangeably.

70% of employers use three or more benefits vendors. A broker can help you navigate this web of relationships. These brokers may also have a good grasp on laws and regulations, too, ensuring you remain compliant and avoid paying penalties. It’s not a one-time thing either. They might offer regular support, answering employee queries, as well as helping HR teams manage the process.

What Are the Advantages of Having an Employee Benefit Broker?

Employee benefit brokers bring experience in their field and can help pick the best benefit packages for your organization. If people feel they’re getting a good selection of perks, they may be more likely to apply for a role, stay in the business for longer, and even recommend you as an employer. We’ve listed the highlights below of the benefits they can offer your business.

Craft an Appealing Package to Attract Top Talent

Using benefits brokerage may help to pull in high-caliber job applicants. This could help strengthen your workforce with the right individuals, as well as keep existing employees on board and on-side. A well-thought-out and valuable array of benefits could set you apart from your rivals when it comes to hiring. In fact, a better benefits package is one of the top reasons people switch jobs (26%), coming in second only to higher pay (32%).

Provide Expert Advice on Employee Benefits

As a specialist provider, employee benefits brokers know the ins and outs of this area of workplace organization, the legislation governing it, and the competitive rates different vendors offer. They can help make sense of the wide range of options and features available, ultimately helping you make the right pick for your organization’s needs.

Review and Negotiate Contracts

Brokers often have industry contacts or access to favorable pricing models, meaning the outlay for your organization is‌ lower and you’re able to consider providing a better package for your team. Worried about legal snares? Fear not! Between your legal team and a benefits broker, you should have it all made crystal clear.

Help Employees Access Benefits

A broker can help ensure employees enroll in the benefits programs, understand their options, and provide guidance on how to make the most of them. With any luck, this means less strain on your HR department, as workers can go directly to benefit brokers regarding these programs. This personalized support can help with employee satisfaction, too.

Tips for Choosing a Benefits Broker

So, you’ve decided on hiring a benefits broker. Congrats! But what are the actual steps involved in selecting one? Here are some things to consider when selecting an employee benefits broker.

Plan

Give yourself enough time to evaluate, compare, and find the best options for your business’s needs. Working six months ahead will remove the stress of last-minute scrambles, giving you time to thoroughly research brokers’ expertise and plans—and highlight any potential drawbacks.

Check Contracts

Having time means you don’t need to rush going through contracts. Review them thoroughly and pay attention to detail. If there are any terms you’re unclear about, you’ll have the space to ask the brokers. Worried about hidden costs? Doing things early can help you identify and work through anything you’d like to clarify.

Do Your Research

Beginning well in advance gives you the chance to scope out the credibility of any benefits brokers you’re thinking of engaging with. Are they licensed? Do they have a good track record with legal compliance? What do other companies say about them? Make sure you’ve done your due diligence before committing in any way.

Do I Always Need an Employee Benefits Broker?

As with most third-party consultants, a benefits broker isn’t the perfect fit for every company. There are some reasons why you’d decide to go it alone when it comes to putting together your employee benefits package.

• If you’re part of a smaller business, you may be able to arrange things better yourself
• If your business only offers a basic benefits package, it may be easy to manage without the need for outside help
• Your HR department could be proficient enough at dealing with benefits to the point where external expertise isn’t necessary.

Having said that, getting a benefits broker on board can offer major benefits. You might need a benefits broker if you’re interested in the following, but don’t have the time or resources to invest in doing it yourself:

• You want to offer a wider range of benefits to your staff.
• You’re concerned about compliance.
• You want to offer competitive benefits that’ll be attractive to potential new hires.

Are Benefits Brokers Worth It?

By now, you probably get the sense that benefits brokers can be pretty helpful. But are they worth the price? You’ll have to do a little—or a lot!—of digging to find out for yourself. As with any third-party consultant, you’ll want to make sure you’re bringing on the right talent for your team. There are a few aspects you might want to look out for when choosing a benefits broker, including:

Transparency

Ensure they’re clear about their processes, fees, and potential conflicts of interest. If they’re open and honest from day one, it can help foster trust. Make sure any brokers you consider are comfortable having conversations around prices, contractual terms, and other nitty-gritty details.

Technology and Tools

What is the broker using to find you the best benefits plans? Evaluate the tools they’re using, such as online enrollment platforms and reporting tools. Having these can help you streamline business processes and make the whole thing seamless.

Cost Structure

Some charge a flat fee; some work on commission. Weigh up the pros and cons of each benefits broker’s pricing model and find one that works best for your company’s needs. Look for affordability, value and flexibility so that you can continually refine and adjust as your business—and your employees—require.

Create a Standout Package for Your Employees with a Benefits Broker

Hiring benefits brokers for your business can help you to find the best deals on the market, manage the process, make people want to work for you, and stay compliant with regulations.

By partnering with an employee benefits broker, you can craft a compelling benefits package that not only attracts and retains top talent, but also ensures compliance and saves your HR team valuable time. Investing in a broker can transform your benefits administration into a strategic advantage, ultimately contributing to a happier, healthier workforce.