Most employee benefits consulting firm selection committees in medium-sized companies follow a common script.

1. Set up a small committee

2. Research Global Consulting Firms or Local Insurance Brokers

3. Create Employee Benefits Consulting RFP

4. Develop short list of firms to bid

5. Make a selection

To make their case, the global employee benefits consulting firms will often point to "Top HR Consulting Firms" rankings from organizations like Vault, their global scale, and an overwhelming number of archived knowledge resources available "in one click".

On the other hand, local or regional insurance brokers may point to their proximity, their extensive insurance carrier relationships, their ability to "shop around" for the right group health insurance quotes, as well as their personalized service.

While these attributes are all well and good, they invariably end up over-charging and under-serving one important group of organization.

Medium-sized firms.

Small and mid-sized organizations with health plan subscribers between 100 and 5,000 in number often end up with a "needs mismatch" when compared to the expertise, services and approach taken by both the global consulting firms, and most insurance brokers. They are "stuck in the middle".

Many mid-sized organizations default to searching for a good regional or local insurance broker to meet their employee benefits consulting needs. Little do they realize that most insurance brokers do not have the actuarial consulting expertise (in terms of knowledge and experience) to help them find the optimal set of employee benefits decisions for their situations.

For example, many mid-sized organizations continue to waste hundreds of thousands of dollars annually in fully-insured plans rather than developing customized self-insured plans that factor in their employee population health management trends and their strategic objectives. Insurance brokers often lack the will or the expertise to manage the complexity of employee benefits planning factors in such a way that the optimal benefit plan design is developed.

On the other hand, when mid-sized businesses decide finally realize that they have outgrown the needs of their insurance broker, the best organized of these will end up in the hands of a global consulting firm, almost by default.

Unfortunately, many of these large firms are not designed to handle the precise needs of smaller firms in a customized and personal manner without imposing extremely exorbitant costs. Additionally, some mid-sized companies who have fled from the global firms have identified a few problems with how services were delivered:

1. Top Consulting Firm, Junior Consultants Only

The world-class actuarial consultants and actuaries on staff are kept truly busy working on Fortune 500 and Fortune 1000 clients while everyone else gets the "junior consultants" without the same level of expertise and experience. Usually, no consultants with actuarial expertise are managing smaller company accounts.

2. Little To No Customization Of Strategies And Solutions

Another common (and perhaps, related) challenge is that mid-sized companies are often left with completely generic solutions that ended up wasting them significant sums. For instance, we have often found mid-sized multinational organizations whose self-insured plans were being incompetently managed with unnecessarily fragmented risk pools and poor benefits vendor oversight.

These are just a few of the issues that mid-sized businesses are often unwittingly facing when they do not develop a robust decision criteria for selecting their next employee benefits consulting firm.

Every mid-sized organization should develop an RFP process that acknowledges the unique needs of mid-sized businesses in the area of employee benefits, insurance plans, and healthcare cost control strategies.

They should also pay greater attention to searching for employee benefits consulting firms that have the consultants with actuarial expertise, fortune 500 level problem-solving and strategic know-how, who work in firms exclusive enough to give them the customized and personalized service and solutions they need to stay competitive.