As sponsors strive to shore up their struggling pension plans, advice on governance and risk management is in greater demand. “On the risk side, what happened in 2008 was a real wake-up call,” says Stephen Lee, worldwide partner and Central Canada market leader with Mercer. “I think there’s a lot of value that consulting firms can add in helping clients to better understand, deal with and manage risk going forward.”
Employers are also paying more attention to how they communicate with employees. Especially in a downturn, consultants say communications can play a vital role in improving employees’ perceptions of the value of their benefits. “This year, when we’re seeing a number of organizations that are significantly reducing compensation increases—or, quite frankly, freezing compensation levels—the value of all of the other offerings becomes so much more important,” says Beech. “We’re seeing a lot of organizations take a look at communicating the value of those programs.”
David Krieger, president of Krieger + Associates, agrees there’s been more work in this area. “Plan sponsors want to make sure that employees not only understand their benefits but truly appreciate the value of what they have,” he explains. “An awful lot of money is spent on providing group coverage—too much to leave employees thinking that their coverage is substandard or has little value. Multimedia communication programs can address these concerns.”
In some ways, difficult times may actually create demand for a consultant’s expertise. “Has our industry been affected? Absolutely it has,” Lee acknowledges. “Having said that, many of our clients actually need our help now more than ever.”
Role Playing
When employers face greater challenges, do they expect more from their consultants? In a word, yes. In this environment, the onus is on consultants to demonstrate the value of the advice they provide.
Kerry Veldhuis, vice-president, HR, with SMS Equipment Inc., says that while she’d like to say her expectations of her consultants haven’t changed, the truth is, they have. “The reality is that the easier solutions are the first ones offered, and I’m less likely to accept those solutions today because I have more constraints,” she acknowledges. “Therefore, I am pushing [my consultants] to be more creative in their solutions.”
David Smith, vice-president, HR, with Ivanhoe Cambridge, agrees that he’s looking for more from his consultants today. “You’re expecting them to be proactive, you’re expecting them to provide you with suggestions, ideas, trends—more so than ever.”
In particular, employers are asking for detailed and segmented data on their employee base, best practices in their industry and how they stack up against competitors, as well as pension and benefits trends to anticipate going forward. “Plan sponsors want to understand their demographics and, as the demographics evolve, what’s going to happen to their claiming patterns,” explains Michael Worb, president and CEO of Pal Benefits. “Understanding your claims patterns, understanding your benchmarks or best practices—those are key things that we’re hearing from employers every day.”
Aselstine agrees that sharing trends and best practices with employers is an integral part of the consultant’s role. “We should always be in front of them with new trends and evolving thinking, in terms of ways to address issues. I think it’s even more important right now that we share our finger to the pulse—what we’re seeing and hearing—because things are changing so rapidly and the degree of importance of some of the situations that we’re addressing has increased exponentially.”
Delivering on the Promise
The support of a capable consultant could make a real difference during difficult times. Are consultants rising to the occasion?
Walker says she relies on her consultant to help with activities such as getting regular updates from fund managers for the DC plan and, on the group benefits side, handling the renewal process. “They make my life very easy, and I couldn’t imagine managing the benefits any other way.”
However, getting the right consulting support isn’t just a matter of picking a reputable firm. Employers say the true value comes from the relationship they’ve developed with the individual consultant. “A lot of it boils down to the consultant working with you on your particular plan to assist in resolving different situations—the person, rather than the firm,” says Smith. Walker agrees, adding that hiring a consultant is almost like hiring your own internal staff. “The consulting industry is as good as the people in it. It’s as good as the people you’re connected with.”
What qualities do employers value the most in a consultant? Client service is critical. “It all goes back to basic customer service,” says Smith. “Someone who understands your position, who’s responsive and, more than responsive, someone who’s creative and proactive.”
