The news of HMV going into administration, along with the likes of Comet and Jessops, may have made a few benefits managers sit up and wonder if the same demise could happen in our industry.
Are you absolutely sure that your suppliers will still be able to deliver all they have promised to your employees?
There are strict laws governing pensions and insurance providers, with more belts and braces making their way over from Europe (Solvency II, anyone?), but what about other types of benefit, such as vouchers (the service that caused such a storm for HMV when, initially, the administrators would not honour them: a decision that was reversed as Employee Benefits went to press).
I would like to think that all is well in benefits land, but it is good practice to do due diligence on suppliers. We have all seen suppliers come and go in this market, so now might be the time to do a financial health check on yours, no matter how long you have had service agreements in place.
Benefits managers at large employers will have dedicated procurement departments to help them. Those in mid-tier and smaller organisations will find this exercise landing in their own laps.
Even if you use an adviser or procurement specialist to help, it is worth looking under the bonnet yourself to check out the financial viability of your suppliers. You can view topline figures for free on Duedil.com, but you need to understand what you are looking at. For example, there is a difference between a supplier supposedly making a loss and one that has taken a hit in profits to invest for the future.
Our cover story this month (Using due diligence to select a benefits provider) gives benefits managers some key starting points.
We are now just a month away from our second annual Employee Benefits Connect. For this 2013 one-day event, we have expanded the number of conference programmes to also cover global reward and to offer insights for corporate advisers.
In the Global Reward conference, we are thrilled to have an exceptional list of high-level speakers who will focus on the business drivers of going global and how reward can be used to support international business. Have a look at the programme at www.employeebenefitsconnect.co.uk, and encourage other senior business leaders with a global remit to come along.
Debi O’Donovan, Editor
Follow on Twitter @DebiODonovan