The Innovative Workplace

Implementing value-added programs

For agencies that use these tools well, here's how they do it

By Don Phin

Over the last eight years, I've had the opportunity to watch how agencies utilize the "HR That Works" program to help differentiate them from the competition. Of course, we're not the only such program used by agencies. There are other programs such as Compliance Check, Zywave, and Benergy, BizAssure, wellness programs, technology programs (such as Agility), on-staff nurses, payroll, HRIS and other "value-added" services. Given my catbird seat, here is what I see distinguishing the agencies that use these programs successfully:

They have a plan and everyone follows it. There is a plan as to why they have the program in the first place. Is it simply to get a broker of record (BOR)? Is it to stay in touch? Is it to help manage data? Is it to build a strategic relationship with the client? Is it to keep the competition away (including companies like ADP and PEOs)? Depending on the answers to these questions, an agency needs to take a distinct approach.

For example, if the goal of the program is to help get a BOR, are the brokers trained on how to use it and are they required to use it? Unfortunately, as was mentioned in my article, "Managing Change" in the November 2010 issue of Rough Notes, most people don't like doing something new because it puts their meager existence at some kind of risk. When agency owners tell me their brokers are reluctant to use new programs, I always ask them, "When did they get the choice?" If you're going to go down this road, then everyone should go down it together—no exceptions.

They charge for the program so they can fully support it. As one advisor to the insurance industry told me, "Where's the value-added in a program that your clients are not willing to pay for?" Perhaps this is one of the brokers' greatest challenges because they view "value-added" as something to give away. They are not comfortable selling anything other than insurance. Perhaps instead you should consider it an extension of your risk management services. Then you'll think about it differently.

If you don't charge to support it, then you'll end up going skinny on the support…which is a big mistake. The only agencies I see getting away with not charging are the ones who land larger accounts, where they get $20,000 or more in commission. Throwing in $1,000 per year or more to provide support for such a client makes plenty of sense. It doesn't make as much sense if it's a $5,000 commission account.

If their clients won't implement the value-added services, the agency either does it for them or establishes a coaching program for them. The challenge to both agency and client alike is to go from abstraction to action. Not just getting the importance of doing something, but then getting something done. In Psychology 101 we all learned that when people are watched and monitored, they are more likely to engage in a desired conduct. For example, physicians who know there is a camera in the emergency room are much more likely to wash their hands.

Chances are that you have a direct relationship with the CEO, president or CFO of the company. If the point person you're dealing with at the program implementation level (HR executive, administrator, safety officer, etc.) doesn't use and implement the valuable, risk-reducing, bottom-line enhancing strategies and tools you've provided, then you certainly have to find out from them why not. If that person offers nothing but lame excuses, don't give up.

Your relationship is with the owner, not with the person who won't take action. To help monitor and support the implementer, you should include individual or group coaching. If that's still not the answer, then you can literally "do it for them" or find someone else who will. Brokers who are truly committed to their clients don't give up when a program doesn't get used.

Fact is, employers will pay for these programs or services if you are able to show an ROI. Therein lies one of the real challenges. Administrative tools that manage the data of benefits and personnel aren't used to generate a profit. For example, I don't buy QuickBooks to become more profitable; I buy it to better manage financial data and save some time. You don't run an agency on Applied or AMS to create a profit, but to better manage data and save some time. So, it will be difficult earning decent fees simply by offering an administrative solution, even if it could benefit the company.

I pay bookkeepers, programmers, graphics people and others to do things for me. Could I train one of my folks to do these things? Sure…but why? It's not our core strength, so I'd rather outsource it. Especially if it is administrative. You can use the program for them if they won't use it for themselves. If you state your case properly, you can and should charge them for these efforts. It's no different if you or I are willing to pay for a QuickBooks expert to manage online bookkeeping.

We will also earn fees by engaging in strategic activity that helps grow the bottom line. So, for example, I pay my tax attorney well to advise me on financial strategy. I pay lawyers well to advise me on corporate strategy matters. I join Mastermind Groups for strategic reasons. If my risk were a large enough concern, I'd gladly pay for an expert to help me prevent it and insure it.

One of our partners, The Flanders Group, in upstate New York, goes so far as to have its implementer, Linda Rees-Murray, go into the client's HR That Works Web site portal and assign the desired training directly to the manager. She doesn't wait for the client's HR person to do it. She then monitors to make sure the safety, discrimination, and other training have been completed. She then supplies the proof of that training to the broker when he or she goes back to market, where they are now in a better position to negotiate a risk reduction discount. She does all of that for them. That is being a strategic partner all the way.

They eat their own dog food. Of course, it's nice to be able to have integrity and be able to say you use the program, too. This not only gives you a good story to tell; it makes you credible. Smart agencies have their assigned implementers use tools in house—without excuse too.

They do a good job of marketing their programs and services. Last, but not least, they have a process for marketing the value proposition both before and after the sale. They position the programs on their Web sites, social media and marketing literature. They include it in their sales scripts. They have a robust "onboarding" process. Then they send reminders about the value of the program on a regular basis. They gather success stories and testimonials. And, they even pick up the phone!

The ways that successful agencies make use of value-added services should make plain common sense. Here's hoping you can do it too!

The author

Don Phin is president of the Employer Advisors Network, Inc., and the author of the "HR That Works" series of compliance and management products. He is the editor of "Employment Practices Liability Consultant" (EPLIC) published by IRMI. He can be contacted at www.donphin.com.