As benefits brokerages search for ways to set themselves apart, a new battleground is emerging: finding and retaining key people. The battle for talent has always been an issue for brokerages, and now it’s also a problem for their clients.
Too often, human resources departments are mired in the day to day instead of long-term planning.
Companies such as ADP handle day-to-day HR tasks and provide advice on client-specific problems.
These services free HR departments to work more strategically on long-term planning.
But it’s a battle many companies are losing because they don’t have the time to figure out what makes their employees tick and how to keep good talent on board.
“The war on talent has never been stronger and more in the forefront,” says Bruce Whittredge, vice president of sales for major accounts at ADP. “This is actually the first time we’ve had a shortage of qualified talent in some of the white-collar industries.”
The challenges of finding and keeping talent provide human resources departments an opportunity to lead. But at many businesses, HR is mired in a day-to-day tactical mode, administering payroll, taxes and benefits instead of engaging in the strategic planning it takes to position their companies for success.
That’s why human capital management, or HCM, is evolving into the next big thing. Companies such as ADP and others can take over the administration of day-to-day HR tasks or provide advice on problems specific to individual companies, which can free HR to work strategically.
Anne Burkett, national practice leader for HR technology at USI Insurance Services, says many clients her company encounters are still struggling with manual entry of data into multiple systems—recruiting, payroll, benefits administration—and the transferring of data that entails is time consuming and prone to errors. The introduction of automated systems such as ADP offers consolidates data and makes it ease through the system.
“What I’m typically getting from a recruiting standpoint is they are either manually handling that or they have all these little workarounds in Excel or whatever they are using that is tied to their payroll,” Burkett says.
“Typically what we see is all of these manual keystrokes. It starts with recruiting, and then you’ve got to get background information and on and on. And then you take a client from a typical picture to here’s what it should look like with all of those being automated, and then there’s very little requirement on the HR staff. It’s certainly fun to watch their eyes light up.
“One of the most important things I hear continuously from HR is ‘I’ve got to be more efficient,’” Burkett says. “I have to automate in every place that I can, in a manner that is cost effective. You can’t be strategic if you are too busy entering data. We hear that from probably every client we talk to.”
Among the top strategic issues needing attention? Figuring out how to find and keep key talent. It turns out there’s a big difference between what employers believe workers think about their job and what those employees actually do think.
The war on talent has never been stronger and more in the forefront. This is actually the first time we’ve had a shortage of qualified talent in some of the white-collar industries.Tweet
A recent ADP Research Institute study, Fixing the Talent Management Disconnect: Employer Perception versus Employee Reality, found several such disconnects in midsize U.S. companies. Among the more crucial: most employers don’t have an accurate handle on how many of their key people are thinking about leaving.
Consider this: 24% of employees said they were actively looking for new jobs, and another 42% said they were passively looking for new jobs. This means two of every three of an employer’s workers are open to leaving. Yet employers overestimate how many of their employees are actively searching (38%), and they underestimate how many are passively looking (21%). For brokerages, helping employers see these risks more clearly could be their new differentiator.
That emphasis on human capital management is new for brokerages that for years have tried to position themselves as a client’s resource for the right technology to remain in compliance with the rules and regulations associated with the Affordable Care Act and other government regulations. Whittredge suggests that, while technology and compliance are still important considerations, today’s clients are more worried about managing their people.
“We are trying to help brokers understand that they are almost a step behind because they are still trying to push technology as the win,” Whittredge says. “We need to get to a place where brokers see how valuable they can be in helping their clients solve for a major gap—finding great talent and putting that talent into roles where they will stay for a long time. Then, the broker’s benefits play becomes even more valuable when coupled with technology, compliance and the rest of the things that we’ve done historically.”
As baby boomers complete their journey through the working years—10,000 boomers retire each day—the number of experienced executives in the workforce dwindles. At the same time, the rise of social media makes it easier for workers to browse for open positions elsewhere, which increases the number of employees actively looking for other jobs.
According to the ADP Research Institute’s Workforce Vitality Report, job hopping/switching is at an all-time high. About half a million American workers left one job for another in the fourth quarter of 2016, up from 406,000 in the fourth quarter of 2015. Key findings from the report indicate employers need a better plan for attracting, engaging and retaining top talent.
The report suggests that employers at midsize companies in the United States don’t realize how important factors such as the work itself, work hours, the cost of the benefits package and flexibility are to employees.
The differences between what employers think is important to employees versus what employees actually value are stark. These data contain vital information that brokerages could leverage to gain business and retain existing customers.
Some of the key findings include:
- Expectations play a key role in employee satisfaction. Of employees who were satisfied with their job, 85% agreed that their expectations were met through their job experience. Of the employees who indicated they were not satisfied, only 49% felt their expectations were met, and 60% said they have walked away from a job that did not meet their expectations.
- Employees also said they are more likely to stay with a company if their experience aligns with the expectations agreed to when they were hired—and if they understand how their role helps to achieve company business goals. The things that attract employees are the same things that retain them.
- Employee satisfaction is also related to a sense of purpose. Some 83% of employees who were satisfied at work indicated they feel purposeful. Of the employees who indicated they were not satisfied, only 36% felt purposeful.
- While employers generally understand the top factors in attracting employees, focusing more on the day-to-day duties of the job and providing work/life balance and a path for meaningful career development will help better capture talent.
The ADP study found that employers almost universally underestimate the importance of the work itself, hours, time off and relationships with direct managers. It suggests employers focus on meeting a broader set of needs targeted at employees’ personal growth. Currently, just one third of U.S. employees give their companies high marks on career performance, compensation or learning management, onboarding, succession planning and recruitment strategies.
Typically what we see is all of these manual keystrokes. And then you take a client from a typical picture to here’s what it should look like with all of those being automated, and then there’s very little requirement on the HR staff. It’s certainly fun to watch their eyes light up.Tweet
Both employers and employees believe workers must leave their current job to make more money or receive a promotion. Company executives need to consider what this means for talent management when even the people in charge say workers need to leave to advance.
Whittredge says these kinds of insights can help brokers redefine their sales tactics. He says changing the way they communicate with prospects and clients about current HR trends and issues helps them become better advisors.
“One of the questions I try to have brokers ask their clients or prospects is, ‘What are their HCM strategies and goals for next quarter or 2017,’” Whittredge says. “Often the brokers were afraid to ask because they didn’t have the answers. But because we have all those tools and resources to support them, now they can ask better questions. They can be more contemporary, and they can be more strategic in the way they go about their sales process, because when the answers start going down the path of talent or the path of recruiting or associate engagement, we have those tools and resources.”
Patten is a contributing writer. email@example.com