Let’s be honest: The benefits RFP process stinks.
It’s time-consuming. It’s confusing. And it’s hard to tell when brokers are being genuine or simply trying to make the sale.
But it’s also worth it — because if there’s one business decision where you shouldn’t compromise, it’s on your employee benefits. And a great benefits offering starts with a great broker partner.
So we’re making the RFP process easier. Nava Benefits recently teamed up with SHRM to share expert insights and guidance to make your RFP easy as ABC.
What goals can an RFP accomplish?
We know what you’re thinking. “I already have a broker — why would I go through the hassle?”
We’ll answer your question with another question: When was the last time you scoped out the benefits broker space? If it wasn’t in the last 2-3 years, you might be missing out on something big.
Here are just a few reasons why you might want to RFP:
- Get a pulse check on the market. It doesn’t hurt to shop around — and with the rate that the benefits marketplace is changing, it’s just good practice to weigh your options regularly.
- Evaluate the support available to you. The sad fact about the broker space is that there’s no universal standard for client support. In other words, “good service” for one broker might be “average” for another.
- Find the benefits your employees want and need. To put it lightly, it takes work to analyze employee data, determine which benefits you’ll need, identify the right vendors for the job, and then roll them out to your employees. You’ll need a great broker partner to guide you every step of the way — or take it off your plate entirely.
- Lower your healthcare spending. Do you know how much your broker makes? Under new legislation called the Consolidated Appropriations Act (CAA), employers now have a full view into their brokers’ compensation structure and services. This means RFPs just became that much more cost-transparent.
“There’s no one-size-fits-all solution when it comes to selecting benefits for your company,” Nava’s Senior Manager of People Operations, Ilana Mauskopf emphasized. “And it’s one of the most important decision that an HR team owns. It’s so important to have the right partner with you to help you navigate through this process. And therefore the RFP process is super critical.”
Why should I RFP now?
Benefits have taken on a new level of importance. But we don’t have to tell you that — you’ve probably heard it yourself from your employees. In the Great Resignation, 43% of employees cited benefits as a reason they left their jobs.
Plus, the benefits landscape is changing by the day. Every year, hundreds of new vendors are bringing innovative solutions to the table. It’s moving too fast for one HR leader to keep up with it.
At the same time, healthcare costs are skyrocketing for small to midsize businesses. In 2021, the average cost increase form SMBs was 9.6% — the highest in a decade.
“If you were ever to focus on a year where it is the time to really reevaluate and level up your benefits offering, this is the year,” Nava Benefits CEO Brandon Weber pointed out. “It’s more material to retaining talent and keeping your workforce and your teams happy and productive.”
The stakes are higher than ever. And you’ll want a great partner in your corner as you move forward. Enter the RFP.
What does an effective RFP launch process look like?
Here’s Ilana’s tried-and-true four-step process to go from zero to RFP.
Step one: Determine your goals.
What’s the ideal end game here? Are you getting a pulse check on the market? Are you hoping to find a new broker entirely? Or are you just seeing what’s out there?
The sooner you figure out your goals for the RFP, the easier it will be to develop a plan.
Step two: Get your internal team aligned.
Start by talking to your leadership team to determine what matters most to them when selecting benefits. Try asking open-ended questions to get to the heart of their priorities.
Then define ownership. If you won’t be running the show here, who has the bandwidth to take the lead? You’ll want to take the guesswork out of the process with clearly defined ownership for each stage.
Step three: Narrow down your broker list.
Before you can send the invitations to your party, you’ve got to make a guest list.
How many RFP responses will you need to be confident in your decisions? Based on feedback from our network, the sweet spot seems to be 3-5 brokers.
Be sure to do your research on who to include — and we recommend casting a wide net. Try asking around in your HR communities, dropping a message into some HR slack groups, and checking out who associations like SHRM recommend.
Step four: Set your timeline.
Eight weeks is all it takes. Here’s your week-by-week breakdown:
- Week 1: Align internally, customize RFP questions, and narrow in on your list
- Week 2: Issue RFP
- Week 3: Sit tight and be prepared to field clarifying questions
- Week 4-5: Receive responses and begin reviewing & scoring
- Week 5: Notify finalists and schedule presentations
- Week 6: Finalist presentations and scoring
- Week 7: Conduct reference calls and socialize decision internally
- Week 8: Select broker and sign BOR
Yep, that’s it. It’ll go by faster than you think. And who knows — eight weeks from now, you could be rockin’ and rollin’ with a great new partner and a leveled-up benefits offering.