Businessolver Blog

A Pooled Group’s Lament?

A Pooled Group’s Lament?
Posted on Thursday, December 5, 2019 by Seth Hall

In this competitive hiring landscape, benefits matter. But what’s that mean for pooled group administrators?


If you serve a trust or association as an executive director, fund manager, benefits director or in another capacity, you might feel like the “middle man” when it comes to the role benefits play in attracting and retaining talent. After all, your member groups are the ones who decide how much to invest in benefits as part of their employees’ total compensation package.

But in terms of the benefits experience—the act of employees choosing and using their benefits—nothing could be further from the truth.

Benefits by the numbers

Today, benefits account for 31% to 38% of your member groups’ total compensation spend. While that’s certainly someone else’s investment, it’s also a testament to the important role you play in serving your member groups’ needs for administering the employee benefits that help them attract and retain top talent.

From their employees’ perspective, 57% consider benefits a major factor in selecting a new job. Furthermore, 73% believe the right benefits increase loyalty to their employer.

And it’s your job to ensure they have access to the right benefits in the right place and at the right time.

Today’s employee expectations require more innovation

As you strive to meet the needs of the member groups that make up your trust or association, it’s important to take a step back and look at the rapidly evolving expectations of their employees. That is, to attract and retain customers, today’s pooled insurance groups must provide employees with the kind of consumer experience they’ve come to expect from online shopping, mobile banking, rideshare services and nearly every other transaction they encounter in their day-to-day lives.

Think of your favorite retailer. Your loyalty card gives you rewards with one quick swipe. Your online portal has your purchase history and makes returns a breeze. When you can’t find your size on the rack, you can order it online. Emails recommend new products you may like, and text messages alert you to flash sales.

When your customer experience is this seamless, you feel the retailer really knows you. Benefits should be no different.

Of course, this sort of experience requires a certain investment and a commitment to innovate beyond the status quo.

Your experience matters too

With a dynamic economy, four generations active in the workforce and a rapidly evolving regulatory landscape, trusts and associations like yours need flexible and scalable solutions to meet the diverse needs of your member groups. The last thing you need is a benefits administration system that limits your ability to be responsive or one that causes an administrative nightmare.

As a manager of pooled insurance benefits, you have a lot in common with traditional human resources teams, 54% of whom say they want benefits technology that makes their job easier. Like them, you know the advantages technology brings to other areas of life and you want the same advantages throughout your workday. Like your counterparts in the HR world, you want your 5-to-9 to look more like your 9-to-5.

Most importantly, a positive and efficient experience with your benefits administration platform allows you to concentrate on activities that add value to your organization—activities like strategic planning, streamlining business processes and meeting the many other needs of the member groups that make up your pooled insurance group.

Recognizing the barriers

When it comes to providing a modern benefits experience and improving administrative efficiencies, pooled insurance groups face several unique challenges.

Strapped Budgets. For many trusts and associations, a large portion of their revenue comes from public entities that have very little budgetary wiggle room. School districts, for example, must not only abide by their local and state funding rules, they’re also held to a higher level of accountability through board members and taxpayers.

Talent Drought. With a booming economy and historically low unemployment rates, staff turnover is high among trusts and associations. Even the older and more stable organizations are not immune to this trend, especially if they’ve failed to implement succession planning to prepare for the “silver tsunami” of their retiring baby boomers.

Innovation Gap. Any business trying to achieve economies of scale must leverage technology whenever possible. Unfortunately, pooled insurance groups have not historically made this a priority. Many have not sent out a request for proposal (RFP) for new technology in several years, so they don’t know what’s available. Meanwhile, their member groups are encountering new technology in their own workplaces all the time. Unless you innovate or modernize, you risk losing customers whose expectations are constantly evolving.

What’s a pooled group administrator to do?

The short answer is to invest in technology that proves its value over the long haul, is designed with administrative efficiency in mind and helps you stay relevant as customer expectations continue to evolve. While that may sound like a simple recipe for success, it’s a bit more difficult if you haven’t researched available options in a few years. There’s a lot to learn.

But first, the good news.

The technology these days is far more affordable than it was five or ten years ago. And, thanks to advancements in machine learning and artificial intelligence, many administrative processes are far less burdensome than they once were. So, it’s almost a no-brainer to consider your options.

Two paths forward

Depending on your current administrative processes, most pooled group administrators start their search for new technology at the proverbial fork in the road; before they decide to work with Vendor A or Vendor B, they must first decide whether to pursue an insourced or outsourced model of technology and service delivery. Here’s how the two differ:

Insourcing: In this model, the trust or association relies heavily on internal resources to manage the entire benefits administration process, from enrollment to customer service. Most often, the technology used in this model is a basic benefits module that is tacked on to existing software.

Outsourcing: In this model, people, processes and technology are all handled by a third party. Also called a “point-solution” or “best-in-class” benefits administration platform, the technology is robust and the services are tailored to suit each trust or association’s unique needs and culture.

From a cost perspective, the price tag for an outsourced solution may, at first, seem larger than that of setting up an insourced solution. Pooled groups who insource, however, must make additional investments in staffing, and often must turn to consultants for the ongoing maintenance of their platform. Outsourced solutions, by contrast, have a more predictable cost structure and lower overall cost of ownership.

As such, most pooled insurance groups choose an outsourced model. If you’re leaning toward insourcing or still not sure which model is best suited to the unique needs of your trust or association, read our guide, Why Trusts and Associations Should Outsource Their Benefits Administration. In it, you’ll find 10 questions to ask yourself to help you predict your total cost of owning one solution over another, including:

  • What services do I need?
  • Will my platform support my member groups’ future benefits strategies?
  • Which compliance issues should I consider?

Read it below.