It’s no secret. A request for proposal (RFP) process is hard work. Whether you’re conducting or an responding to an RFP for employee benefits, it requires several hours of your and your team’s time. From preparing for meetings, managing logistics, aligning with leaders on a decision and then potentially making a partner change and beginning implementation, there are a lot of pieces that can make – or break – a positive experience.
When you conduct an employee benefits advisor/broker RFP, you’re selecting a partner to manage what is typically your second most expensive line item, next to your employees’ salaries. This illuminates the importance of conducting your RFP process carefully and thoughtfully.
There are many ways of doing an RFP. Some involve a formal questionnaire. Others rely instead on personal interviews and building relationships to steer the decision. Being intimately involved in this process at First Person, I always recommend the latter. However, some organizations may require written responses due to more stringent procurement requirements or board involvement.
I’ve come across many benefits RFPs – some well done, others not – and can offer these five ways to execute a great process that sets you up to pick the best partner for your needs and creates a positive experience for all.
Tip #1: Have a clear benefits strategy
You likely wouldn’t get into your car without knowing where you’re going. It will be challenging to pick the right partner to help you achieve your benefits and total rewards goals if you don’t know what those goals are. Perhaps you want your future advisory partner to help you put this benefits strategy in place. At a minimum you should be clear about your organization’s overall goals so that the right partner can help you create a benefits strategy that supports these objectives.
Tip #2: Ensure decision-makers know what your organization wants and needs out of a future partner
Often this involves knowing both what is and isn’t working about your current partnership. Conducting an RFP purely for a market check on pricing and services will run the risk of selecting a partner that still isn’t providing exactly what you need.
Be clear on what role you want this partner to play. For example, is it important to you that a benefits advisor also has expertise in compensation or HR strategy? Do you want to outsource administrative work to them? What role do you need an advisor to play today versus three years from now?
These are the types of questions to answer. Also note, that while each decision-maker is entitled to their own perspective on these topics, what matters is the team consensus and who, at the end of the day, as the authority to make a final decision.
As you think about your answers to those questions, let’s examine the two types of benefits partners you’ll often come across:
- Traditional model – A more transactional approach to benefits where the broker markets and secures benefit plans and provides you advice to select the coverage you need and have a smooth Open Enrollment. This model tends to be more “hands-off” throughout the year, outside of renewal and Open Enrollment.
- Consultative model – An advisory approach, like First Person’s, in which the broker takes a more holistic view of your total rewards strategy to consult year-round on how your programs are – or aren’t – helping you achieve your people and business goals. A true benefits advisor. It’s often we talk with our clients about things some may say are not related to employee benefits. Yet, our total rewards approach helps us see the connection and ultimately help find the solutions our clients need – whether that’s leveraging our benefits and well-being expertise or one of our other partners in the market.
Tip #3: Provide respondents enough information to get to know you and your benefit plans
In short, the more information the better. I recommend sharing data that allows respondents to see not only the current state of your benefits but also historical data such as claims reporting, typical renewal experience and overall cost trends. Be sure to share any significant recent changes you have made, any less common and innovative programs, as well as the reasons or philosophies as to why. In addition to benefit plan information, it’s also helpful to share higher-level organization details such as the structure and key players of your human resources team (or whomever would serve as a primary benefits contact), important population demographics and overarching organization details such as mission, years in business and more.
Each of these things helps a future partner get to know you early in the process, and a small detail that may seem insignificant could make a difference in what and how services are proposed. Also, be available to answer questions throughout the process, if your RFP process allows you to do so (some organizations such as government entities are often not permitted to speak to respondents outside of formal milestones). In the best RFP experiences I’ve been a part of, the employers not only allowed for follow-up questions via email, but were also happy to jump on a phone call to make sure we understood their needs and tailored our response as such.
Tip #4: Let the things that matter drive your decision
Don’t let the RFP process itself dictate your decision. Formal RFP questionnaires and selection criteria or rubrics are meant to guide toward a decision – not dictate the decision in and of themselves. How do you get at what really matters?
If doing a formal questionnaire, consider a narrow question set that only asks respondents what you care about. Avoid downloading an RFP template and sending it out without wordsmithing the questions in a way that makes sense to you and eliminating questions that won’t impact your decision.
Spend time getting to personally know your future advisor’s company, the account team that would serve you, the full suite of service options, and how you would work together. While I typically consider a formal questionnaire as an optional component of an RFP, in-person interviews are non-negotiable. Allow for candid conversation and Q&A outside of a formal sales pitch. Landing on the final partner will almost always take more than one discussion. Don’t rush this part of the process.
One employer recently conducting an RFP chose to only hold interviews with no formal written response required. In their opinion, they would rather go directly to the discussions that matter rather than spend time reviewing pages and pages of materials – which they recognize is also cumbersome for potential partners. They liken this process to hiring an employee. Seeing a resume is one data point, but the relational aspect of an interview to gauge the personality, working style and culture fit is critical.
See the big picture and make your final decision by factoring in all sources of information. Consider the objective facts: the capabilities the advisor can deliver, associated fees and breadth of the advisor’s reach (e.g., national or local). And, also the subjective information: the dynamics of the relationship as you have gotten to know each advisor, information gleaned from references about their experience, and the quality of the deliverables and presentation styles up to this point. Both hard facts and intuition are important.
Tip #5: Consider the logistics of the RFP process to create a smooth experience
Remember, that as you are evaluating potential advisors in an RFP process, they are also evaluating you. Be respectful of everyone’s time and contributions to this process to build the best relationships from the start. For example, an employer currently conducting an RFP encouraged their incumbent broker to spend less time documenting services the client already knows about and uses, but rather focus on any new services or products, saving the incumbent broker’s time while allowing them to showcase anything new of interest.
Here are a few other logistical aspects of the process that can make it a positive experience:
- Use electronic methods for delivery and submission. In our ever-increasing digital world, the days of sending and returning hard copies are gone.
- Allow for ample time to complete a formal questionnaire. I recommend no sooner than three weeks from the date of its release.
- Similarly, give finalists enough notice to adequately prepare for an in-person meeting.
- Establish a realistic timeline for RFP milestones and decision dates and stick to it. RFPs often seem one-sided in that potential advisors are held to strict due dates while the organization can delay the decision due to poor calendar planning or failing to make the RFP a priority.
Follow these tips to help make sure that the next RFP you conduct will land you a long-time, mutually beneficial, true consultative partnership you need and deserve! Take the first step and learn more about what makes a successful RFP process with our partner selection guide here.
Are you contemplating an employee benefits advisor RFP soon or already have one scheduled? Do you need help crafting a timeline or strategy for evaluating partners? If you’re looking to make a change, feel free to contact me directly with your questions, reach out here or tweet at us. We’d love to hear from you!