Following GRiD’s recent article identifying that only 26% of employers seek advice from an Employee Benefits Consultant and know all of the employee benefits available on the market – and that there is a concern this could lead to them potentially missing out on new and emerging services that can support their staff and organisation.
We have highlighted below some of the common issues we find when we begin working with a business for the first time who has previously worked directly with their Employee Benefit insurers (and not used an Employee Benefit Consultant):
This is usually because the insurer cannot provide advice on the policy and therefore will typically ‘order take’ – based on the instructions of the employer. Without full knowledge of how the policy operates and how it will interact with your other business processes/entitlements, the policy can be in conflict or not achieve what you were hoping it does.
In worst case scenarios, the policy is actually unfit due to a compliance issue or direct conflict.
We regularly hear business owners or senior management declare that they don’t really know how the Employee Benefit works. This is obviously concerning as it may mean it is not being used when it is needed (i.e. a claim should be made).
Therefore the business is incurring a cost for an Employee Benefit that may not be used!
Like most insurance policies, the premium is usually reviewed each year (or every 2 years) by the insurer. They will take into consideration:
Typically the premium will increase each year – however if you are not doing an open market exercise, it is difficult to determine if the price increase is fair or if a suitable but lower cost alternative is available. Often, the existing insurer can be negotiated with.
Mainly due to point 2, the staff also have little understanding of your Employee Benefit package. If the Employee Benefits are not regularly promoted to staff or if information is not easily accessible, then employee many not know what great Employee Benefits you provide.
This is dangerous because you are incurring the cost of the benefits but without the benefit of it retaining and attracting staff.