Global Broker: Request for Proposal (RFP) and Selection Process

When selecting a global broker, here are questions, considerations, stakeholders and key differentiators that global employers utilize in their successful RFP process.

August 20, 2020

This guide breaks down the process, from business case development to account management, and provides employer tools and lessons learned from utilizing this strategic relationship with global brokers.

Most companies only do an RFP "as needed" rather than on a regular cycle. "As needed" is usually when issues arise, and service levels decline. Otherwise, if the relationship is working, the contract often renews without a competitive bid. Given that reality, putting the time and effort into a robust RFP initially is a worthwhile investment.

Consider the following questions as you develop your RFP:

Who Do You Invite To Bid on the RFP?

The world of global brokers is small—and getting smaller. Who are members considering for global broker appointments?

  • Aon, Marsh/Mercer, Willis Towers Watson are the three main players.2
  • Smaller brokers are sometimes considered.1
    • However, one member mentioned that the company eventually decided against a smaller broker, as they had concerns that a smaller broker would be too U.S.-centric.1
    • Local brokers often don’t have enough of a global footprint.1

What Do You Include in the RFP?

The RFP should include:

  • 1 | Information on your company’s strategy, vision, organizational structure and governance framework;
  • 2 | A clear outline of your needs (geographical footprint, volume of policies), as well as expectations (both general and service-level agreements) that the company has for services provided by the local, regional and global contacts;
  • 3 | Detailed questions the company wants to see in the response regarding capabilities and technology (including data inventory and analytics systems);
  • 4 | Top competitive advantages; and
  • 5 | How a particular broker’s approach differs from competitors.1,4,5

To ensure that your company receives adequately tailored responses, it is highly recommended that you share your company’s guiding principles, benefits strategy, key global initiatives, business priorities and organizational structure in the document.1,6 If you send out a generic RFP, you will receive a generic response. You should also decide how much detail you wish to include in your RFP questions.1

Recommendation: Write out your guiding principles. Many companies may have guiding principles, but they are not in writing. When a company does share them, it allows all stakeholders to know how your company is driving its strategy and how the global broker partnership should be integrated into those efforts.

See the Employer Tool: Request for Proposal (RFP) for a sample.


What is the Biggest Differentiator?

Members find that when looking at the handful of main providers to serve as the global broker, the geographical footprint and capabilities are much the same between them.2 Also, pricing can be similar or negotiable to be similar. If that’s the case, what sets bidders apart?

Below are some key considerations that members shared and should be discussed during the RFP and selection process. Questions in the RFP is one way to find out bidders’ approach to these issues. The interview also gives you an opportunity to dig deeper on the following:

Strategy

  • The broker needs to have an understanding of the corporate strategy and what the company wants to accomplish.1
  • The broker should be aligned with strategic initiatives [e.g., governance, harmonization, minimum core benefits, purchasing alternatives(e.g., captives), vendor consolidation, etc.].1

Recommendation: Include enough information in the RFP so that the broker understands your needs. Then evaluate bidders’ RFP responses and interviews on how well the broker has grasped your culture and priorities.1

Structure

  • Aligning broker and company team structure globally / regionally / locally;1,5
  • Global and regional coordination; and1,5
  • Strength of account manager at a global and regional level.1,5

Recommendation: Having the right account manager makes the biggest difference in an effective global broker partnership both at a global and regional level.During the RFP interview phase, ask bidders to have the account managers who will be assigned to your account globally and regionally participate in the interview discussion.1,5


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Transparency

  • Transparency should be a priority at both the local services and commission level.1
  • The rules of the road outlined the scope of how the local brokers will work on your account, particularly related to what they could discuss at the local level.1,3 One member defined all of those parameters ahead of time, and they’re working wonderfully.1

Services

  • Captive and global underwriting quote capabilities.1
  • Services in addition to core brokerage tasks, such as consulting, employee surveys and actuarial support.1

Technology

  • Technology capabilities aligning with global initiatives.1
  • The ability to operate with one centralized repository.1
  • Knowledge about how to manage the technology platform, which focuses on leave and analytics.1 The Intuitive system provides consulting and actuarial support.1
  • Experience with global benefits management and overseeing the employee engagement technology platform.1
  • Understanding of the inventory and enrollment systems.1
  • Experience with administrative online systems.1
  • Experience with the Intuitive system.1

Learnings From the RFP Process

Sometimes challenges experienced post- implementation can lead to best practices that could be implemented during another RFP process. By doing so, challenges you’re experiencing now could be avoided a second time.1

Some examples of challenges that could be considered during the RFP process include:

  • Lack of consistency in service across different countries. It can be harder to find proactive quality services in smaller countries and easier to have higher quality services in locations with high employee populations. In countries with a small employee footprint, members commented that they found it harder to have services reflective of their expectation of a consultant; rather it was truly only broker quality service.1
  • Collecting good data from each country can be challenging. One area of difficulty is determining the health drivers of cost increases, which would help employers address employees’ needs in a cost-effective manner.1

You will want to identify what cost and data information you need and expect and outline those requirements in the RFP to ensure that bidders can meet your expectations.

Which Stakeholders are Involved in the RFP Review and Selection Process?

Determine who will be included on the team to review RFP responses. Ideally, responses will be evaluated by a selection panel representing key stakeholders, including Compensation & Benefits (globally and regionally), HR Delivery/Administration Services and Procurement.1,5 Legal will also be involved at some point.1

Recommendation: To ensure a successful broker partnership, engage your local and regional colleagues in the RFP process. By incorporating local and regional feedback in what to include in the RFP via appendix that outlines specific local service needs) and having your colleagues review the RFP bids at a country level (via appendix), the company can be proactive in addressing local and regional integration challenges.1,5 This will be instrumental in a smooth rollout of the partnership.1,5


Interview Process

As part of your RFP, you will need to decide which stakeholders are involved in the bidder interview process.1 During the interview, you will want the bidders to elaborate on their written responses and give real world examples for the interview team to react to. These interviews should act as an opportunity to ensure that the bidder and company’s vision and expectations are aligned.

Who Makes the Final Decision on What Broker is Hired?

Who has a vote? Who makes the final decision? These answers can vary by company. Most global members described the process as a joint effort between corporate and local, looking at capability and cost. At some companies, the capability analysis is done locally, and the decision is made collaboratively. In other companies, local and regional colleagues provide input, but the decision is made by global headquarters. For some companies, regional colleagues are an equal stakeholder in the selection process.Incorporating the regional team in the RFP selection process makes the regional colleagues feel more positive toward the global broker partnership.1,5

Which Criteria are Most Important in Your Broker Selection Decision?

As the employer’s stakeholders review RFP bids, they will want to know how the company is evaluating responses so that they can weigh criteria based on the company’s priorities. This will allow for all parties to arrive at a consensus on which global broker to choose. When drafting the RFP, consider what the key criteria are for your company and ensure that you are asking for enough information in each area to be able to effectively compare and evaluate responses (Figure 2).1

Most Prevalent Factors Global Employers Used in the Selection Process 
Figure 2: Most Prevalent Factors Global Employers Used in the Selection Process

See the Employer Tool: RFP Comparison / Selection Process Template for a sample.

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TABLE OF CONTENTS

  1. Who Do You Invite To Bid on the RFP?
  2. What Do You Include in the RFP?
  3. What is the Biggest Differentiator?
  4. Learnings From the RFP Process
  5. Which Stakeholders are Involved in the RFP Review and Selection Process?
  6. Interview Process
  7. Who Makes the Final Decision on What Broker is Hired?
  8. Which Criteria are Most Important in Your Broker Selection Decision?