There are so many unknowns in terms of health care reform and its eventual impact, but there is one certainty: the Minimum Loss Ratio provision of the bill is going to change the way benefit producers get paid. No longer will you have the luxury of getting paid for the placement of a product; you will now have to get paid for the value you create.
This isn’t necessarily bad. Getting paid for the placement of a product gives you no opportunity to differentiate yourself from the competition. As a result, everyone is getting paid the same amount. If you feel you add more value than your competition, that should be unacceptable. Unacceptable or not, that will no longer be an option.
In the not so distant future, assuming you want to continue to get paid, you are going to have to compete based on the impact you have on the business of your clients. That impact will have very little to do with the insurance products that make up their benefit program and will have almost everything to do with generating a return on the investment into human capital made by your clients. The more strategically you can align yourself with the goals/objectives of your clients, the greater a return you can help drive, the more critical you become, and, therefore, the more you will be able to earn. However, before you can assume this new role, you need to understand exactly how you can create that alignment. Start thinking about how organizations plan strategically as well as how HR can/should be the driver towards those strategies and you will be on the right track.
Making an impact
As businesses continue to become leaner run organizations, they need HR to be a strategic driver more than ever before. However, before HR can effectively become that driver, it is critical to identify where those opportunities exist within the organizational strategic plan. Once all of that is established, our opportunity to make an unbelievable impact with our clients grows exponentially.
It may be over simplifying, but businesses make strategic decisions in four key areas: innovation, implementation, optimization and outsourcing.
Innovation – These decisions are built around creating a separation between the business and its competition through some form of differentiation. Those organizations that consistently innovate within their market/industry will consistently outperform their competition.
HR’s role:
- The attraction/retention of top talent
- Bringing resources that allow for proper due diligence during M&A activity
- Making an impact in the areas of optimization and outsourcing to allow for the re-allocation of resources (both financial and human capital)
Implementation – These strategies focus on an organization’s ability to execute on their strategies for innovation. This is about speed to market and being able to make quick, confident decisions as an organizational team. Those companies who have a culture that allows them to move quickly and in unison will always get a greater return for the investments they make into their business.
HR’s role - Building the culture of the organization through:
- Training
- Cohesive management strategies
- Leadership development
- Employee engagement
- Effective communication
- Team building
Optimization – In this area, business are focused on how to create cost advantages over their competition. This tends to be the more commoditized part of the business, and the only sure way to protect the bottom line here is to lower the cost of doing business.
HR’s role:
- Lowering turnover
- Presenteeism / absenteeism
- Improving employee productivity
- Maximizing return on benefit investment
- Maximizing return on human capital
- Employee engagement strategies
Outsourcing – Companies have to regularly ask themselves, “What are we doing today that we shouldn’t be doing tomorrow?” Primarily focused on processes, anything that can be done as well by someone else should be outsourced so that internal resources can be re-allocated in a way that creates greater value.
HR’s role - By eliminating the following process-driven responsibilities, HR will be able focus on delivering the more strategically focused responsibilities identified in the first three areas.
1. Compliance
2. Administration
3. Training (the more process focused aspects of training)
Although businesses have largely been focused on the tactical issues they need to execute in order to survive the recession, it is time for them to start thinking strategically once again. Knowing how HR can be a significant driver and making sure HR has access to the necessary solutions to effectively execute will enable the business to achieve their strategic objectives bigger, better and faster than those companies who relegate HR to a purely administrative function.
Maximizing investments
Being realistic, most businesses will not be able to execute on this internally and will need to partner with someone who will bring them the vision, plan and resources to truly connect HR to the corporate strategy. This is our opportunity and our new role; a role that has us not only maximizing the return clients get on their benefits investment, but also maximizing the return they receive on their people investment.
Your future role is to:
- Know the strategic goals/objectives of your clients
- Identify the opportunities for HR to be the driver towards those strategies
- Evaluate the barriers in the client’s way
- Develop a plan for how you will assist the client to take advantage of the opportunities and eliminate/mitigate the barriers
- Have access to the solutions necessary for execution
Reinventing yourself isn’t necessarily easy, but it will not only ensure your survival, it will create more opportunities than you have ever imagined. You just have to ask yourself, “How badly do I really want it?”
Originally published on Zywave.
Content provided by Q4intelligence
Photo by nito500
