There are many ways to save money, improve value for money and deliver better employee benefits. Consider reducing the high commission paid to your broker, ensuring that your benefits are appropriate for the business and its employees and also, that you obtain the most competitive product rates.
Saving money on your benefit spend
Generation Employee Benefits were appointed by a private equity company to review its significant suite of employee benefits including pension, medical, life, disability, dental, gym, employee assistance and cycle to work.
The reason for engaging further help was due to unsatisfactory service provided by the current broker; the personal touch had been lost due to numerous account managers working on the account over a short period of time.
Our initial audit is always designed to ensure that the benefits are appropriate for the business and valued by its employees. The audit showed that the benefits were indeed appropriate to the business, the products were with the right providers and generally benefits were appreciated. The audit did however identify two issues – in addition to the original service issue highlighted by the client.
Commission – Many clients still think that commission on non-investment products is just something they must accept. Although commission can be an appropriate way to pay for services, unfortunately the standard rates of commission are set by the product provider and are not generally set at a level appropriate to the work undertaken by the broker.
In this particular instance the commission payable to the holding broker was in excess of £30,000 more than the fee quoted by Generation Employee Benefits to manage the account.
Engagement – An issue was also identified with employee engagement; many employees did not know that a number of the benefits existed. To overcome this problem Generation Employee Benefits recommended benefits management software, however due to financial constraints the agreed solution was the production of a mini booklet of benefits that was emailed to employees annually.
The intervention improved employee engagement and resulted in a significant cost saving for the clients.
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