There are a number of key issues an employer should consider through due diligence when selecting a provider.
First, the employer should consider how well it thinks it can work with the service provider’s team and senior management. Also, look at the financial strength of the organisation and assess whether it could survive a further downturn.
Employers should look at the provider’s strategic commitment to the market and how it keeps abreast of new legislation, technology and working environments. Can the provider demonstrate this? Another issue is whether the provider has considered all aspects of sustainability, including environmental, social and financial. The employer should ask whether it takes part in and shares best practice with the industry, and how it develops people and systems.
In terms of experience, employers should look at whether the provider can demonstrate improved service delivery over a sustained period, and how its clients have benefited from this in the past. Other key points are the typical client size of the business, the average length of relationship with existing clients, and how [an employer’s] scheme will fit.
Technology is another key point. Employers could ask what the provider’s systems strategy is, and how it will enhance the outsourcing proposition. If the provider has disaster recovery and business continuity plans in place, have they been tested?
Sometimes, things go wrong: references from other clients of the provider can shed light on how it dealt with issues and how quickly they were resolved.
It can also be useful to ask what the nature of the issues were. For example, was there an underlying problem with controls and processes or was this a one-off? What learning experiences did the service provider have?
Malcolm Reynolds is managing director, trustee solutions at JLT Benefit Solutions