Who left the back door unlocked?

All of your revenue from your clients with less than 50 employees will be gone in the next 2-3 years. What percent of your business does that represent? How does that affect your company and your lifestyle?

Those clients will join the fastest organically growing brokers in the US who are ADP, Paychex, and Zenefits. Paychex had the 3rd largest overall growth in the Top 25 of the BI Top 100. 100% of that revenue was from new business, not acquisitions. It's not something that is going to happen in the next couple of years. It is happening right now.

We've been tricked

Everyday the newspapers, websites, and talking heads distract us with threats to sue President (not mister) Barack Obama. We're fearing for our family's lives due to the imminent threat of Ebola or ISIS. CNN and Fox News are both guilty of running these stories repeatedly.

We're so busy memorizing our political party's sound bite that we don't see the real threat to our business. The real threat are the fastest organic growth brokers in the US.

Is your house in order?

What are you doing to keep your small business clients? I ask this question approximately 50X a week. In most cases the answer is: nothing. Sometimes there is even a desire for these clients to leave.

In the Community Rated world of small business, especially in markets like New York, New Jersey, and Connecticut that already are seeing 1% commissions, there isn't a lot of margin for service.

Keep your eye on the ball

Many people thought that "Obamacare" would be the demise of the independent insurance broker. As it turns out, PPACA and its logistical nightmares have not lured many business owners away from their brokers. Yes, the Employer Mandate has been delayed, but who has a success story of their experience on the exchange? Where are the testimonials?

The reality is that HIX was a massive opportunity for any one that wanted to take advantage of it. It let business owners know that their hometown broker wasn't the only place they could shop for employee benefits.

The smartest guys in the room

ADP, Paychex and Zenefits are more than happy to work with your small clients. They're not interested in working with 500 employee organizations or companies that want to go self funded. And they're so good at what they do it makes them the fastest organic growth brokers in the country.

How do they do it? They give business services to the small clients that insurance brokers have neglected. Here are some of the things they advertise:

Payroll
Compliance
Workers' Comp
HRIS

If you look at the model Zenefits uses, they are going to automate 99% of a business's HR administrative work. They make their money through the commission from the health care provider.

With ADP & Paychex, they already have the payroll in most cases. If you have the payroll, you have all the information you need to provide the other services. And these other services come at a cost. In some cases, ADP becomes the employer of record so that they can get lower rates on the medical.

A new hope

There is good news for all of us: The NSA isn't concerned about a domestic attack by ISIS, we are not a 3rd world country and have quarantined the Ebola case in Dallas, and there are brokers today who are winning new business by offering payroll, HR, and compliance solutions to their clients.

Like everything else that comes at us loud and fast, we need to take a moment to look at the facts and make judgments for ourselves. As I mentioned earlier, I talk to brokers 50X a week. There's a minority who are laser focused on increasing their retention 2%-3% year over year and finding organic growth one meeting at a time. How do they do it?

Payroll
- They research the local guys, have a couple of conversations, and partner with the sharpest one
Compliance
- The self serve portals from a decade ago are sitting in the closet and lawyers are too expensive for the masses. Brokers are now offering a live, qualified person or team internally or outsourced to quickly respond.
Workers' Comp
- "That's not my job" is not acceptable. Learn it and find a way to make money with it. ADP has...
HRIS
- Brokers have been patiently doing their research and know that it's NOT one-size-fits-all. Do some research and join a broker association that can help educate you on vendors.

It's the 4Q. Look at what you can do NOW in time for your 12/1 and 1/1 renewals. Plan what can be done for 1H15. Pay attention to what the competition is doing because it's getting late in 2014. Turn off the tv and lock your back door.

-R