Summary
Agencies often think they’re saving money by asking account managers to handle translations, benefits portal builds, or other specialized work. However, this approach wastes valuable time, risks costly mistakes, and pulls focus from high-value clients. By outsourcing these tasks and reevaluating fee structures, agencies can protect profitability, improve client experience, and prevent team burnout.
Are you asking your employee benefits account managers to do things they are not specialized in, and are completely wasting time and resources while doing them? In the name of “saving money?”
Probably. Many agencies are.
We hear this all the time, where the insurance agency owners don’t want to hire a specialist to do a project and instead give it to their account managers to “figure it out.” The claim is typically that the specialist will cost hard dollars, and you’re already paying the account managers, so just have them do it.
Like their time isn’t worth hard dollars.
It makes me roll my eyes loudly.
Two common items employee benefits agencies discuss in the “to outsource or not to outsource” decision are communication translations and benefits administration portals. The argument is that if they had to spend money (those hard $$), they’d lose money on the account; therefore, it makes sense to have the account manager do it.
That argument aside, every minute your service team spends on non-strategic tasks is time they’re not servicing and retaining your most profitable clients or helping you secure new business.
What gets sacrificed when you do it in-house?
It’s important to really think about what you’re pushing off to do these things that can easily be done by an outsourced provider, even if they require payment. What gets sacrificed? Name it.
- If you lose a high/mid-profit client because you didn’t hire the specialist and screwed up the translation or portal build, did that $500 expense you avoided save you money?
- If you ask your service team to do a translation or portal-build project that derails them from their critical client work and expect all of it to be done well and on time, will you regret it when they choose to leave?
- If you spend time doing these projects in your off-hours, and you miss your kids’ games, family dinners, date nights, family picnics, friend gatherings, or bedtime reading, were you really successful?
🤔
Getting to the bottom of this decision tree requires doing a book of business analysis and understanding what is really at play. How much revenue are your clients bringing in, and can you afford to service them the way you are or even have them in your book of business?
The bottom 25% of employee benefits clients typically account for 1-2% of agency revenue, with revenue per account of less than $1,000. What’s your hourly rate? What’s your team’s hourly rate? What are your operating expenses and intended profit margin? How many hours do you put into those clients?
When you do some quick math, you’ll probably find that you’re losing money, or at best breaking even on a significant portion of your book, and that only a few clients are carrying the load and subsidizing all that unprofitable business. If you look deeper with time tracking, you’ll probably find a gross imbalance in the time spent on accounts vs. the revenue they bring in.
If the revenue from the clients is not covering the expenses you incur to service them, you’re losing money on those clients – think of it as volunteering your time, rather than servicing clients. Now, how committed do you feel to making all those sacrifices?
How do you regain control?
Making profit-focused decisions starts with placing a value on your time and the skill sets of others.
If you don’t have a hard dollar value on your time, it’s easy to brush things off and devalue the time spent and opportunity lost.
If you don’t understand what goes into a project, it’s easy to dismiss it as something that can be whipped out or slapped together.
Both of these erroneous thought processes put your business in a precarious position. Ask yourself two questions about each client:
- Are they profitable, or is there a path to profitability with them?
- What aspects of servicing the client are best done internally, and which are better done via a partner?
The case for outsourcing
I came across a LinkedIn post on this topic. Industry friend and translation expert, Melissa Burkhart, CEO of Futuro Sólido, regularly posts about how brokers and employers need to hire professional translators and not rely on supervisors, account managers, Google Translate, or AI to get the job done CORRECTLY.
She was writing about the sloppy, lazy translation work agencies are choosing to do with AI. It’s disgraceful. The English version of AI writing is easily detectable and cringeworthy. Imagine what it translates into?
"But we had it reviewed by our bilingual account manager!"
Great. Does this person have a higher degree in a language-related field? Do they have the tools to ensure that "disability" was translated the same way every time it appears and that carrier names like "Guardian" or "Travelers" were not translated at all? (just a couple of examples---we've seen much worse). Do they find and fix the typos in your English originals? (And, equally importantly, don't they have a pretty demanding job already??)
Her points are hard to ignore or argue.
And I can’t tell you how many conversations I’ve had about outsourcing benefits administration portal builds. It’s time-consuming work, especially for people who only do a few a year. The effort it takes a professional to build them is a fraction of what it takes your inexperienced account manager, who is also trying to service the client and get them renewed. Just what they need is another 4+ hour project on their plate.
Some of the greatest benefits of a ben admin portal are in its integrations with other data sources to sync data and avoid rekeying. When you add time to the portal build to figure out and establish the connections, you add layers of complications that can add multiple hours to a build.
As our Friendor, Molly Cullen explains, agencies are often not using the ben admin platform to its full potential, skipping out on carrier integrations. She was so motivated by this realization that she started her own business as an outsourced portal builder, specializing in Employee Navigator. She oversees and manages hundreds of integrations, “saving countless hours of staff efforts and preventing human errors.”
Why would you NOT want that??
Do the math on outsourced services
Let’s say you spend $500 or $1000 on one of these services. Does that send you into heart palpitations about losing money on the client? If so, here are some questions to help you sort it out.
- Have you done the math on the account to know how much you’re making? And what your actual expenses are? Hours spent (x) hourly rate(s) (+) operational expenses (+) intended profit.
- If you’re not profitable with the client, why are they in your book? If it’s an account you want to keep, figure out how you will charge them differently to cover the expenses and profit you need to make to turn them into a legitimately serviceable account. Part of that fee structure should include outsourcing services.
As Melissa points out in our LinkedIn discussion, when translations are done properly,
“…they will generate an ROI. More people enroll in more plans. They use those plans advantageously (consulting a nurse hotline or telehealth, for example, rather than defaulting to the ER), so claims are reduced and renewal costs are mitigated.
If you play your cards right, they will share their positive experience with new-hires and co-workers, so participation goes up even further the following year. Not to mention, when employee experience improves, the broker's relationship with the client is strengthened. What is the risk of cutting corners on English communication? It's the same (if not higher) in other languages.
You can translate this same idea to a benefits administration portal with carrier integrations:
- Reduced account manager’s time spent updating data
- Ease of use and appreciation by employees who share with others, increasing participation
- Options are clearer and have a systematic walkthrough for selection, increasing purchases
Regardless of the service you’re offering, there is an opportunity to find an ROI on the expenses you incur. Think about the dominoes of the impact on the client, and track the time spent (and not spent) by your team.
Are you maximizing your team and their strategic contributions, or are you burning them out?
Content originally published by Q4intelligence.
Photo by New Africa