The past year and a half has been characterized by marked change. The move to remote work, industry layoffs and the desire for more robust support left plan sponsors and consultants rapidly altering the ways they work together.
Certain trends, such as virtual care, mental-health support, changing retirement needs and industry consolidation have slowly been on the uptick for some time. Yet the coronavirus pandemic accelerated these movements, pushing many to the forefront. And while business may have halted for a moment at the beginning of the pandemic, it soon sped up, leading to deepened relationships and better outcomes for both plan sponsors and consultants.
Read: 2021 Group Benefits Providers Report: Will the rising tide of virtual health-care offerings lift all boats?
“When the pandemic first hit the Canadian space, it was very much a time of stasis,” says Les Marton, managing director of bfinance Canada Inc. “All the industry market participants didn’t really know what was going on. It was a good time to be testing your business resumption planning, your backup facilities and everything else. So not a lot happened for a month or so, but it was remarkable how business picked up. In the May and June timeframe, [plan sponsors] realized the world didn’t end and they still had things to do within their portfolios.”
More Canadians in need of mental-health support
30% of Canadians said their mental health is impacting their ability to function.
28% indicated high levels of self-rated anxiety and 17% indicated high levels of depression.
Among those working or in school, 8% said they’re missing work/school days due to their mental health and 30% said their productivity has decreased.
18% accessed mental-health services since the pandemic began compared to 11% who had accessed these services before the crisis. The number of people saying the cost of service is a barrier has decreased significantly.
Mental Health Research Canada report, April 2021
Indeed, some consultants even noted their businesses are doing better than ever — and that’s likely due to how they adapted to meet plan sponsors’ needs amid the pandemic. “During the first six months of this year, we’ve seen double the opportunities we normally would have seen in the past. And historically, the business is pretty sticky,” says Riley St. Jacques, partner and senior consulting actuary at PBI Actuarial Consultants Ltd.
“I think there’s been a lot more recognition from plan sponsors, especially those who got added value through additional support and strategic advice,” he adds, noting he’s now seeing a number of plan sponsors considering changing their current service provider.
In many ways, these past 17 months and counting have allowed consultants to take a more proactive approach, offering a greater high-touch service to plan sponsors.
“Consultants were given an opportunity to rise to the top and support plan sponsors and employees above and beyond a traditional core consultant model,” says Colleen Baker, People Corporation Inc.’s vice-president of enterprise benefit solutions. “You had the opportunity to make more connections than ever in your lifetime. I spoke to more [human resources] stakeholders in the last year and a half than I have in my career because I wanted to give support.”
Read: 2020 Consultants Report: Pandemic will fundamentally change benefits, pension plans
Gone are the days when consultants and plan sponsors struggled to fit each other into their schedules. According to many consultants, the pandemic has made communication easier than ever. “It’s so much more efficient to be able to run [meetings] virtually, as opposed to the old days when consultants and clients alike we’re kind of road warriors,” says Marton. “We’d spend a lot of time in airports, lounges, taxis, hotels and so forth. This is so much better. You have so much less dead time from this perspective.”
And given this new convenience, he doesn’t think consultants and plan sponsors will be rushing back to old habits anytime soon. “I think there’s going to be much more flexibility of working-from-home type situations because I think it largely works.”
Despite physical distances, some working relationships have become closer than ever, says Rejean Tremblay, chief commercial officer at Aon. “[Plan sponsor] clients have started to look at us as being part of their family.”
At the beginning of the pandemic, plan sponsors did something they never had before, he adds; they reached out to see how Aon was handling health and benefits programs and retirement. They were also keen to hear how the consultancy was working with a remote workforce and managing the transition.
Read: Pension plan committees applying virtual meeting lessons to second year of pandemic
While Tremblay agrees with the ease of virtual meetings, he still thinks a personal touch and non-verbal communications can sometimes get lost in an online world. Instead, he believes working relationships will move to a hybrid model going forward.
Communication has also changed and increased as consultants are forced to find new ways to present information that’s a value-add. For example, some consultants started creating animation videos to convey important information, since in-person meetings were on hold.
“It’s been very effective,” says St. Jacques. “We can create customized education videos for plan sponsors based on the actual details of the benefits plan design or group retirement plans and have those videos for every phase of the employee experience, whether it’s onboarding, an annual review, termination or retirement.”
Others, like Baker, started creating additional thought leadership to send along in their correspondence, then offering an opportunity to discuss that information as needed. “It’s about figuring out what [plan sponsors] need as opposed to selling them a solution.”
New types of benefits
For Josée Le Blanc, health innovation leader at Mercer, one key message she’s kept relaying to plan sponsors is that the definition of benefits is changing.
“We’re increasingly thinking and talking about virtual care, mental-health support, health-care innovation and digital health solutions. As a consultant, obviously we need to adapt our knowledge to consult in those new areas.
Read: Why digital health care is here to stay following pandemic
“The way we deliver benefits used to be based solely on the assumption that people were showing up to the office, they were logging onto the internet, they had everything they needed during the 9-to-5 when they were at work. In the area of health and well-being, it’s 24/7 access that they need.”
That might include virtual access to physicians, physiotherapists and psychologists — types of solutions that have been blooming during the pandemic, says Le Blanc.
More pricing accountability
At the beginning of the pandemic, many plan sponsors became more cost-conscious in terms of compensating consultants for their services. “There were many more conversations around commissions than there were in previous years,” says Redcliffe & Co.’s Christopher Redcliffe.
As a result, the firm implemented its own national disclosure of compensation practices. “. . . Having some kind of accountability has created innovation and an entrepreneurial spirit in the way people are providing their services. The traditional models are being revamped to provide greater value to plan sponsors and members.
And, as employees dealt with the effects of physical distancing, social isolation and working from home, providing mental-health support has become an ever-increasing priority. “From personal finances to workload, managing personal and work relationships and balancing work and life responsibilities, employees continue to experience stressors like never before,” says Baker. “Add to this the uncertainty and complex challenges that come with managing the effect of a global pandemic and supporting the health and well-being of employees has never been more important.”
Joanna Gomes, manager of benefits and wellness programs at Bimbo Canada, says she’s leaned heavily on her consultant for support with wellness strategies, virtual offerings and mental-health support over the past year and a half. “They’ve partnered with us to provide more information to our [employees] and more offerings to our [employees] at economical pricing.”
Read: Webinar: Coronavirus and workplace mental health
During the pandemic, the producer and distributor of bakery products replaced its employee assistance program with an enhanced EAP offering that’s largely focused on virtual health-care services, including a digital pharmacy, virtual doctor care and online counselling services, with the latter at a much cheaper rate than it would be to see an in-person psychologist.
For companies that offer these services, some had been researching innovate health solutions for a number of years, yet they still had to act very quickly in March 2020 when the pandemic was declared by the World Health Organization.
For example, Mercer was implementing telemedicine within 24 hours. According to Le Blanc, a plan sponsor would reach out in the morning, they’d set up a 30-minute call, educate them on the program, narrow down a few vendors and send a report that night. The plan sponsor would then make a decision the next day.
“Knowledge was definitely key because there was a feeling of urgency coming from the top down. We had to be fast, not only on how we delivered, but also how we collaborated.”
Looking beyond retirement
Benefits aren’t the only aspect of total rewards that had to be reimagined since the onset of the pandemic. As retirement income becomes less of a guarantee for many employees and as some need that money sooner to reach other life goals, retirement and pension plans are also changing.
Aon is evolving its conversations with plan sponsors, from focusing on retirement income to being more pragmatic about plan members’ needs, says Tremblay. “The conversations are more around, ‘Can we help employees save enough to buy a first house?’ or ‘How can we help them pay for higher education for their kids?’ So our expertise with retirement income could be applicable to different needs.”
Read: How RBC is fitting debt payment into employees’ financial journeys
Jillian Kennedy, defined contribution and financial wellness leader at Mercer, says the firm is also moving away from pre-pandemic thinking when it comes to pension, retirement advocacy and income replacement.
“We need to move with the lifecycle of our employees. Maybe that means not just focusing on pensions, but thinking about the total rewards spectrum and offering more flexible arrangements that allow employees to get access to money now, not just when they retire. If [employers] don’t think through a total reward spectrum or a total benefits spectrum and how all the pieces move together, they may actually lose the opportunity of adding value and resiliency to the workforce.”
For example, some employees may not believe retirement exists for them, while others close to retirement may fear they won’t be financially secure. Before the pandemic, these conversations tended to focus more on decumulation.
• With the rise of virtual meetings, consultants and plan sponsors have more opportunities to connect than ever before.
• The definition of benefits is changing. Consultants have had to adapt to plan sponsors needs around virtual care, mental-health support and overall employee well-being.
• More and more consultancies are consolidating, with firms offering a unique or niche approach poised to stand out.
“The interesting thing about retirement is that, whether we like it or not, we have to think about investments because investments are important,” says Kennedy. “And I think that, regardless of what happens with the pandemic and vaccinations and how we recover as an economy, we’ll probably see financial impacts to markets. We’ll see a lot of volatility within the markets, whether it’s inflation, negative interest rates — you name it, we’re going to have to deal with it. And that means we’re constantly going to have to rethink how we help employees make good decisions and how we package those decisions.”
Consolidation on the rise
Long before the pandemic, consolidation was a major theme to emerge in the consulting space. In July, a proposed merger between Aon and Willis Towers Watson — which was announced in March 2020 and received shareholder approval in August 2020 — was called off to put an end to an antitrust suit filed by the U.S. Department of Justice.
With larger organizations looking to consolidate, smaller, niche firms say consolidation can help make them stand out in the crowd. “Overall, for us and our business, we think it’s good, competitive-wise, because there’s less competition,” says St. Jacques. “The smaller niche firms can show our strength and services for those niche clients a little stronger because that’s where we specialize. And it looks like it’ll continue.”
Read: Aon, Willis Towers Watson call off proposed merger
Christopher Redcliffe, principal consultant at Redcliffe and Co., believes consolidation has its benefits and drawbacks. In particular, he believes it’s a good thing for advisors who are in the later years of their careers and are looking for an exit strategy. “It provides them with a very lucrative strategy and provides some continuation of service standards to clients.”
Redcliffe also points out that, as more advisors leave the industry, fewer are joining. “I think the number of advisors entering the industry is much smaller than the number of advisors who will be retiring. It will create an enormous opportunity for people who want to get into the advisory side of the business. But, in the interim, there will be a lack of high-calibre talent in the consulting and advisory side. The industry didn’t plan for the sheer number that are going to be retiring.”
Leah Golob is a Toronto-based freelance writer.