Um not yet! How many brokers and technology providers are taking a deep breath and/or sitting back saying “See I told you this would not last!” Some are even enjoying the downward-spiral show, Parker is out, state insurance regulation violations, new CEO, internal misconduct, lay-offs, another new CEO, another major layoff, and so on. We are all waiting for the next “shoe to drop.” I must say I have thought and verbalized the “I knew it was too good to be true,” and “this is not a sustainable model” spiel. We all know the obvious challenges. They are straddling two very complex industries and they have not defined their market discipline which leaves them without a rudder. They have a lot of skin in the game and many invested in their success. It is far from over for sure.
Don’t sit back and watch or find relief in the Zenefit’s story. Why? Because they changed the market. Regardless of their challenges or what you think of them, I say again, they changed the marketplace. They created a market for Zenefits like organizations as well as created a market of technology providers that distribute their product to brokers as a defensive measure to protect agency’s business. There are many new and somewhat new entries to the market place that execute the Zenefits-like model such as Gusto (previously ZenPayroll), GoCo, and EaseCentral. I heard others say they are really a small market solution. Not really, many of these providers are pushing up market and even if that were true you have others who have entered that are focused on the mid-market such as Namely and JustWorks. And don’t forget there is still ADP, Paychex, and BenefitMall who have and still do actively prospect your business.
What should you do? Partner with a Maxwell Health, Employee Navigator, Flock, or some other broker friendly solution. No! I am not saying these are not good, viable solutions and you should not partner with them. Here is what I am saying is:
1. Don’t wait! Embrace the change today, Amen Alan! As Alan Katz stated at the end of 2015, “Technology use hits a tipping point.” We still have agencies hoping the landscape will change. It is not going to change…it is becoming more competitive than ever. From technology platforms that deliver value such as benchmarking and collaboration tools to the client expecting you the help them navigate their HCM Solution decision.
2. Develop a technology strategy! Do not have a knee jerk reaction to a competitive situation. It will take time, it is difficult, if it were easy everyone would have one. This could take 3-6 months, if not more, to develop.
3. Think like a client! They are your best resource for the answers. What do they want? Probably choices and a best fit for them but you won’t know until you ask them.
4. Don’t put your eggs in one basket! Partnering with a single solution is no different than you partnering with one carrier to deliver health coverage. The best fit for all your clients cannot be found in a single offering.
5. Be proactive! Don’t just develop a strategy, go to market with passion and conviction. This is a real challenge in the marketplace. Business are struggling with technology, with 40% of businesses looking to change or improve the solutions they use today. Lead with it! It will differentiate you.
Don’t count Zenefits out, they may be down but not out. The new market will continue to grow, competition is here…what do have you say about it?