David 0:00

It's hard to believe that it's been two years since we talked about voluntary benefits, or as our guest calls them, enhanced benefits. So we thought it was time to check back with our resident guru and find out what's changed, what's new, and what are the new things you should know about. We'll find out on this episode of Shift Shapers.

SPEAKER_02 0:22

This is the Shift Shapers Podcast, connecting benefits advisors with thought leaders and entrepreneurs who are shaping the shifts in the industry. And now, here's your host, David Saltzman.

David 0:36

And our go-to guest for everything enhanced benefits, as he calls them again, is my old friend, the founder of Voluntary Disruption, and the co-author of Breaking Through the Status Quo, and he won't say this about himself, but I will, a great stage presenter, as well as a fellow podcaster, Eric Silverman. Eric, welcome back. Hey, buddy. Thanks for having me, always. Ah, it's my pleasure. So what's new in the entire world of voluntary benefits?

SPEAKER_03 1:00

Oh man, what's not new? There's so much. It's insane. Well, you start where you want to start. I tell you what, voluntary isn't so voluntary. The reality is with the economy the way it is and employers of all sizes, shapes, and forms of all industries and demographics, they are, I think it's no secret, right, David? It's been very hard for employers to attract and retain talent. So what we've been seeing over the last few years, even pre-pandemic, is that employers are paying for quote unquote voluntary benefits, or as I say, enhanced benefits more than ever. And I have advisors and partners ask me all the time, well, how do you get them to do it? I don't understand. They're voluntary benefits. Well, we're salespeople, right? You have to present the case and show them the path, the journey, if you will, and excite them about what it's going to do for them short and long term. And guess what? We're finding that at least, not everybody, but at least seven, sometimes eight out of ten employers, a light bulb goes off and they say, I can do that. I can afford that. And they do it. So no, I mean, voluntary is not so voluntary anymore.

David 2:05

What is the shortcase for it? If I were a broker and I were talking to a client who didn't have these benefits at the present time, what is that short conversation like?

SPEAKER_03 2:13

The reality is you just have to differentiate your benefits package in a way that is completely different and unique than any competitor up the street. And you have to present it to the employer in a way that they understand that a competitor is not just an arch rival competitor. Meaning we're not talking about skilled talent could be for sure. An ASE certified mechanic that is specialized for 10 years on Mercedes-Benz, sure, that's fine. That's different. They're only going to be able to probably go to another Mercedes-Benz dealership immediately. And I don't know, that could be wrong, but that's just my assumption. But when we're talking about, keep going with that theme, a car dealership as an example, what about the non-skilled talent? What about just general salespeople who can move brands all the time? What about the receptionist, the administrative support staff, the lady in the accounting department, the guy in the finance office, right? These are not necessarily quote unquote skilled talent. So they could be looking at a job up the street to work at a plumbing company, for heaven's sakes, to work in the air accounting department, to make the same type of wages. So you have to understand, you have to put into a perspective of the competition is not more, it's more so for unskilled labor than it is for skilled labor, as far as what I've seen in the marketplace. And then you talk about how it differentiates because when you look at benchmarking data, when you look at all the stuff that's out there and you survey the market and the industry and look at geography in the marketplace, most companies they all they already have health insurance, they're already paying for some level of medical insurance, they already have dental envision, they're already paying for some of that, they already have disability in life. Most companies these days, even the smallest of small companies, three, four, five employees, they're already offering quote unquote voluntary employee-funded enhanced benefits, an accident plan, a cancer plan, et cetera. So how do you differentiate? Well, you just completely throw out the window the old way of doing it. So one way we do it a lot of times is through a defined contribution. I don't remember. I might have said it years ago when we first talked, but you know, it's still very, very hot and a big deal. And we call it a shopping spree. You and I are marketing guys. So I use the term shopping spree. And I just tell employers, look, whatever you're spending annually, let's look at last year, whatever you spent annually on your employee benefits as a whole, non-medical, not talking about major medical, whatever you spent, just take that money, divide it up over the employees over 12 months, and that puts together a small budget, and you can allocate that budget to every employee in a shopping spree manner. It puts them in the driver's seat. They become true consumers of healthcare because they have to be educated. It's use it or lose it. They can't just get a pay increase. If they go over their budget, you pay roll deducted. If they stay under their budget, they don't see a deduction at all. And where CFOs love it is it's forecastable, it's predictable. And any CFO will tell you that's music to their ears.

David 5:02

So, what are the top three benefits? And has that changed since the last time we talked?

SPEAKER_03 5:06

Traditionally speaking, I would say it hasn't changed much. The benefits that employees still seem to, at least perception-wise, need want value are, of course, non-medical, of course, uh, disability, dental life, vision, the accident criticals, hospitals of the world are still popular. But the reality is we're seeing a ton of traction on non-medical benefits and actually non-insurance, non-traditional insurance. So one specific benefit that we're using to really drive the journey to the destination is engagement. Or for engagement is pet benefits. I don't remember the number. I think if you look it up, there was multiple millions, tens of millions of pets adopted during the pandemic. And people are realizing very quickly now that they're really expensive. They're really super duper expensive. And how are they going to fund that? Those veterinarian visits. So pet benefits, as much as I hate to admit it, as an insurance professional, it drives me bonkers, but people are more excited about pet benefits. They're more apt to go into the enrollment portal. I still do a lot of self-serve. In fact, I do 100% self-serve. They're quicker to go into the portal to complete their enrollment and become educated to learn about pet benefits than they are to go in and learn about disability or life. And it's sad but true, employees would quicker put money in pet benefits than they would in disability in life and other benefits. So the reality is, is it as good for them as a human being? No, not at all. But it's a hot button, it's a trend. HR people and business owners continuously ask about it. And all we need as advisors is them to go through the enrollment, complete the enrollment, waive benefits or elect, it doesn't matter. We need them to go through the enrollment. Pet benefits has become a ridiculously easy way to help drive engagement more than I've ever seen with any other benefit.

David 6:57

Well, you know, they become four-legged members of the family, and you want to look after them like your kids. And so two things. A, what's the burden on employee communication? If you go into a firm and they've never had these kinds of benefits, how do you communicate what they are and why they're valuable? And what kind of appreciation do employers see on the back end?

SPEAKER_03 7:16

So communication when it comes to the way that we're doing it is through getting the employer to be a true partner and getting them on video and using video technology and using the remote control of everybody's daily life in the year 2023 and it has been for years. And that's their mobile device, their cell phone. So, you know, communicating with employees via, and frankly, 95 plus percent of the market brokers still do it this way, using only email, going like it's you know, 1997 or 2014, going in person and doing a big dog, excuse my pun, doing a dog and pony show, right? Doing a group meeting and hoping and praying people are paying attention and not throwing your brochure away when they leave the meeting. Those days, I don't want to say they're gone, but oh, I'll say it. They're long gone. I mean, it's just when I present this strategy to employers, it's very rare, if ever, that they ever push back. In fact, they're relieved that they don't have to worry about the hustle and bustle and hassle of assembling all their employees into a big room where barely anybody pays attention. So one of the key components is we just get the employer on video a few times during the enrollment. The first video is, and they just record using their iPhone or their Android device. They record on Zoom or Teams, it doesn't matter. They send us the video, we make it look fancy, we put captions on it, we put their logo, we clear up the audio a little bit, and we blast message that out via text to all the employees at the company. And look, nobody wants to see my ugly mug on video. Nobody knows who I am anyway, or the broker. So having the CEO, the CFO, the COO, the HR person on video, whereby it literally just says something to the effect of, hey guys, it's open enrollment. We're super excited. Here are some quick updates. Here are the changes. We need you to go through open enrollment. Thanks for your help. If you need, if you need anything, let us know. That's it. We blast it out. They post it on their internet, they put it on their Slack channel, their Teams channel, whatever it is they're using. That's just one additional form of communication in addition to email, in addition to any other things that they may be doing. And recently we've been putting QR codes on the one-page flyer, and the employer is then posting those around the office if they have a physical location. Most actually don't nowadays. So that's kind of irrelevant, but it's still nice to have.

David 9:26

Absolutely. So the the back end of this is what kind of an employee appreciation is? Is it just another ho hummet's medical insurance, or is it, hey, this is really cool, and I get to pick and choose things. And is the ability for them to control, especially in a money purchase environment, is that something that really resonates and makes them feel good about how they do this?

SPEAKER_03 9:46

Yeah, I mean, the employer has to be passionate and involved. And I'll be honest, 15 years ago, Eric, 10 years ago, Eric would have laughed because I wouldn't have walked away from much. But nowadays, I mean, I've been doing this almost 24 years. I'm not rich. I just make poor decisions. And I don't know, I hope it's not a poor decision, but the reality, I've walked away from groups where I'm meeting with an employer and everything's going well. They love what we're talking about, but they refuse to record themselves. They refuse to even record audio because we could just use audio and make it a what's called an audiogram. They're just, they're fighting us every single time we mention a strategy, a best practice to really drive engagement and move the needle. And I've walked away. Uh, even larger groups, multiple hundreds of group uh employee groups, I've said it's just not a fit. I mean, we're not going to be able to satisfy what we promise, and you're not going to be happy. Let's face it, between you and I, we know if they're that hard in the beginning and we haven't even signed the deal yet, culture's important to me. I have a really big team of awesome rock stars. I'm not going to put them through the aggravation of having a group that is that terrible.

David 10:50

Yeah, I mean, it's it's the old adage that, you know, when you're dating, everybody's on their best behavior. If it's not good to start with, it's only going to get worse later on. So, you know, that's the wisdom of being at this for a number of years. I know there are a couple of things that are really important to you. One of them is what you call the journey versus the destination. What do you mean by that?

SPEAKER_03 11:07

So I had an epiphany a few years ago. I think it was after we recorded in May of 2020. And the epiphany was, yeah, I'd done fairly well. At that point, I was 20-something years in the business. I would hop on a call with a broker or a business owner. I would say we did fairly well. We'd we'd probably uh get six or seven out of 10 deals. Sometimes we win, sometimes we lose. But I was boring them to death. Hopefully, not like I'm boring folks right now listening, but I was absolutely just product dumping, feature driven. Everything you would tell me I'm screwing up as a marketing guy. And I did it for all those years. I didn't realize it. And what I ended up, a light bulb went off, and I figured out very intensely that the journey is the communication, the engagement, the technology, everything that we do on the front end with the employer group for the employees to get them fired up and excited about benefits, not just during open enrollment, but during the year-round communication strategy that we lay out. That's so much more paramount. The journey is so much more paramount than the destination. The destination, while very important, I tell employers all the time, don't hang up on me. The destination's important, but it's not nearly as important. The destination is just the product, the service, the carrier, the rates, the rate lock. Will it pay? Do they answer the claims? Do they answer emails? Do they pick up the phone? Very important. Don't get me wrong, but let's just be honest with each other. Anybody listening, please don't fool yourself. Carrier A to carrier B, it's all a commodity these days. It's all build the best product and race to the bottom line. I'm not trying to bash my industry, our industry, but that's commodity driven. It really, truly is. It's relationships and commodities. So the destination is not nearly as important as the journey. And what I found is when I spend, no joke, the lion's share of my first meeting with an employer and a broker talking about the journey, they get so fired up and excited. And they actually get aggravated because they're like, you know what? You're right. We spend insane amounts of money on medical benefits. It's the second largest expenditure on our PL each and every year. It's not predictable, it's not forecastable. And yet, if we do an exit interview and we ask about benefits, nobody understands our benefits. So we get them fired up about getting the education, the communication, engagement done, partnering together. And then, oh, by the way, we need to adjust and tweak a couple benefits, and here's what we do. At that point, they're so excited about what we already talked about that they don't care about the current carrier or benefit they have in place. They just want the magic that we talked about in the beginning for the lion's share of the meeting.

David 13:41

Well, and that's a perfect example of what we tell our marketing clients, which is if you don't build a story that has an emotional trigger, you're never going to get to the end point. So you have to understand the client's need, you know, on a very deep psychological level. And there's a great book called Thinking Fast and Slow by a PhD named Daniel Kahneman. And what he proved was exactly what you're talking about. And I wish more brokers would adopt this kind of mindset, is that we think that we make decisions with our prefrontal cortex, with the reasoning part of our brain. But in point of fact, we make almost every decision that we make with the limbic system, the old fight or flight piece, the little piece in the brain called the amygdala. We've just gotten really awesome over thousands of years at instantly justifying that decision with our prefrontal cortex. So if you sell the emotional piece of it, the rest follows. Nobody cares how the watch works. What they care about is wow, that'll look really good with my blue suit. Emotional decision. And that's what that's exactly what you're talking about. I know something else that you're concerned about is what you call responsibility creep. What is responsibility creep? That's not your broker, right? His name is not the responsibility creep.

SPEAKER_03 14:46

No, that could be. No, look, and I can't, I don't even know who I'm going to quote in a minute. I don't know if they created it or not, but I never heard of the term responsibility creep. I'll give a shout-out to my good friend and colleague who focuses not on the enhanced benefits and voluntary, but more on the ancillary, employer-funded life DI stuff. He's incredible. He's a good friend. Happens to be in Maryland, but he's a national firm. And that's Kevin Curin, one of the founding partners and owners of Salt Margin. Be a great guest for you. Hint hint. But anyway, listen, I heard him say the words responsibility creep when I had him on my podcast, the Rockstars Rocking Podcast. And I was like blown away when he explained it. And all it is, it makes total sense. It's no different than any business. Brokers and advisors and consultants have been tasked and asked by their HR clients and their business owner clients to do more and more and more and more and more and become experts in areas in a million years they never wanted to be or thought they would be an expert in or try to be an expert in. That's responsibility creep. They're getting asked to do more, much more, and get paid the same or typically less. And for a broker, here's where it really kicks in, and this is where they really get irritated because it's true. Every broker that started as an advisor back when you started, let alone even in the last 10, 15, 20 years, they wanted to be in the medical world. They wanted to build a strong health insurance plan. They wanted to make money for their family and do right by their client. They didn't join the industry so they could learn how to build technology, enrollment technology, and videos and marketing material and write copy for text messaging and emailing and all the various things that we've already talked about. It was never on their radar. So they either quickly figure out how to do it and do it internally, or they better outsource it to a firm like mine. And there's other firms like mine that do it. And that's responsibility creep. And frankly, it's no different than when McDonald's was founded. They didn't have premium salad. They didn't have premium coffee. Come on, get out of here, right? But McDonald's as a company realized that if they didn't offer high-class salads, if they didn't offer premium coffee, they're not going to capture as wide of an audience to come in and patronize their business. Brokers and advisors, we as humans are no different in any business.

David 16:55

Well, the trick is to do that in a way that boosts your margin. Or you know, that brings it to the bottom line. The problem is that brokers have to learn all this stuff and have to know all this stuff, and they don't get paid for it. Right. And so, you know, your time-to-value ratio goes to hell in a handbasket, and you're doing lots of work, and you're taking on liability. And beyond that, your EO doesn't cover some of this stuff.

SPEAKER_03 17:17

Bingo.

David 17:18

So clients are expecting answers and results, and you're going, if I I gotta be really careful how I say this, and even then they might misunderstand it. It's not, you're right. It's not what a lot of us signed up for initially, but it's the world we live in today. So we've got a minute or so left. Where do you see the trajectory of voluntary benefits or enhanced benefits? I love that phrase, by the way. But where do you see the trajectory? What do you see happening in the short term and maybe a little bit longer out?

SPEAKER_03 17:43

Well, I feel pressure here because I listened back to our show in 2020, and I literally in the last minute said, you said, you probably always do, you know, what do you think's happening in the future? And I said in 2020 that groups would be doing more and more and more self-serve with less and less in-person one-on-one enrollments. And guess what? I was right. Here we are a few years later. And that's exactly what it is. It's been bigger and better in that capacity. The technology's only gotten better. Yeah. And where do I see the next three years before I come on again? Maybe sooner, maybe later. I think it's going to continue that trend. And I also believe that you're going to start seeing a line in the sand drawn where brokers are getting more and more fed up with responsibility creep. And they're going to start collectively telling their employer group clients and prospects, that's not my area of expertise. Here's why I'm good for that. Although very important, we encourage you to outsource that to X, Y, Z firm, et cetera, et cetera. Because I've just, I've talked to so many advisors and brokers and they can't handle it and they have no interest. They know what they're good at and they want to stay in their own lane. So I think the smart advisors at least are going to start outsourcing what they're not experts at and internalizing and doubling down on the things that they are experts at.

David 18:59

Okay, I'll extend another minute. Do you think they're going to take a piece on the back end of that? Is there going to be a financial incentive for them? If I refer somebody to your firm, is there a little kicker that I get for doing it? Or do you think it's just going to be get me out of here, please?

SPEAKER_03 19:11

I think it's going to be 50-50. It could be even 60-40. For instance, if a broker and advisor were to introduce a firm like mine, and again, I'm not the only one. There's tons. They're great. The reality is there is a kicker because we do share revenue, and that's important to us. In fact, I turn down cases where a broker tells me, no, you keep it, you keep 100%. We don't want to get appointed. We don't want to do. I actually won't do it. And the reason being is I need them to have and I want them to have skin in the game. And then there's going to be those brokers who they don't want to do it, they don't care about it, and they're just going to outsource it, and that's okay. They're probably not going to be ones that I work with.

David 19:46

And that's a great place to end our conversation for today. Eric Silverman, speaker, author, voluntary benefits, expert, rack on tour, man about town, and most importantly, my buddy. Eric, thanks so much for sharing your expertise with the audience.

SPEAKER_03 20:01

Absolutely. Thanks everybody for listening. Thanks for having me.

Announcer 20:05

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