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BENEFIT MANAGERS ADOPTING NEW ROLES

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Benefit managers who want to advance-or simply remain-in their current roles must learn to focus on business strategy rather than mere administrative functions.

Increased use of technology has changed the role of the benefit manager, and in many cases eliminated many of the traditional functions and jobs performed by corporate benefit departments.

"It's not only changing the role of benefit administrators and benefit managers, but at times also eliminating the job," said John McGlone, director of participant services for Buck Consultants Inc. in Secaucus, N.J.

To what degree technology affects benefit administrators depends on their position in the department. For those whose job is related to benefit management, "clearly technology will have an impact on their job," said Mark Maselli, principal with The Kwasha Lipton Group of Coopers & Lybrand HRA in Fort Lee, N.J.

Among mid- to high-level benefit executives, "the role of the manager changes fundamentally," added Dennis Steckler, technology initiative leader for Tillinghast/Towers Perrin in Chicago. "They have to become aware of the technology and have to become more strategic in their thinking."

Those who primarily perform administrative functions may have their jobs eliminated. "To the extent that all they do is answer questions and collect forms, they will have to find something else to do," he said, adding, though, that only a small percentage of benefit professionals are in this situation.

"The transaction side of the benefit house is what's being affected the most," agreed Don Duckworth, president and managing director of Johnson Smith & Knisley, an executive recruiter in Atlanta.

Senior management is driving the changes, experts said. Companies are "looking for ways to leverage technology to perform the same job with fewer people and more efficiency," Mr. McGlone said. Companies want their benefits departments to cut costs and evolve from a money-draining area to one that adds value to the company's overall strategy.

Changing the function of benefit departments is part of many companies' plans to enlist every business unit in meeting their strategic goals.

"Human resources is going to be focused on value-added functions rather than providing administration to run programs," said Don Bobo, vp and managing director of MetSource, a division of Metropolitan Life Insurance Co. in Southfield, Mich. "Benefits people are being asked to come to the business strategy table now, rather than just administer the programs," he said.

"If it's not a strategic piece of their business focus, it's subject to being re-engineered in order to lower costs," added Tillinghast/Towers Perrin's Mr. Steckler.

Companies are using a variety of new types of technology to take over benefit administration tasks. Perhaps the most common are call centers that let employees dial a toll-free number and, using push-buttons, get questions answered or perform numerous benefit functions. A 1996 survey by Buck Consultants shows that 76% of 401(k) plan sponsors in 1996 used a call system for plan administration, up from 35% in 1993.

One of the older technologies is document imaging, which permits benefit documents to be scanned into computers. In the computer, the forms can be routed to the proper people and accessed by whomever needs them.

Kiosks are another type of technology. They are a station at the company with a direct computer link to outside benefits suppliers and allow employees to transact numerous functions concerning their benefits.

The newest and maybe fastest-growing technology is the Internet and intranets-computer networks only accessible by a company's employees and other designated people. And while employers have just recently started to use them, they are growing rapidly. In essence, it's similar to the call system but with a screen for viewing documents, making it easier to use. It can be used to answer employees' questions and to perform benefit functions, such as changing 401(k) plans or altering the number of dependents enrolled in the health insurance plan.

In a survey released last month by Watson Wyatt Worldwide, 27% of 323 companies surveyed have implemented an Internet or intranet system. Also, 57% said they plan to use intranets for human resource purposes next year. Of those companies that currently use intranets, 60% said they plan to add additional applications within six months (BI, Feb. 24).

The survey also shows that using an intranet changes the role of the benefits department. "Many organizations are now on their way to successfully achieving the vision of Virtual HR-paperless, self-service human resources-that allows HR to focus less on administration and more on recruiting and retaining the best people, and on making employers more productive," the survey concluded.

The high costs of buying and maintaining these systems leads to outsourcing of benefit functions. Rather than devoting money to buy and upgrade the sophisticated technology, companies turn to outsourcing firms to run parts of their benefit operation. Outsourcing firms use the latest technology and use it cost-effectively because the costs are spread over many clients.

Through outsourcing, companies can reduce costs, focus the benefits department on strategic thinking and use the outsourcing firm's technology and expertise, said Mr. Bobo of MetSource.

Outsourcing has led to staff reductions for benefit departments. A 1996 Buck Consultants survey shows that "the average number of human resource staff reported prior to outsourcing was 29. After the implementation of outsourcing, the average dropped to 16." For benefit departments, the number dropped to six from nine after outsourcing.

Despite the rapid changes, all is not hopeless for benefit managers. With the elimination of administrative functions, those who remain must adopt strategic thinking, the experts said. After all, that was the main purpose of using the new technology: to free the benefit administrators from mundane administrative work so they could think about strategy.

"Benefit managers today must design, develop and deliver benefits to employees in a way that furthers the business goals of the company," Mr. Bobo said.

"Being a businessperson first and a benefits person second is the key to survival," he adds.

And even if many functions are outsourced, "someone needs to manage the whole process," said Mr. Maselli of Kwasha Lipton.

Because of the new role of benefit managers, companies are looking for people with broader skills than just benefit administration, Mr. Duckworth said.

The new candidates "do not reflect the transactional mind-set of the past," he said. "They reflect a skill set and a number of functions outside of benefits" that include accounting, law, finance and taxes.

Opportunities exist for benefit administrators with outsourcing firms and with companies that are creating the next generation of technology. Because of many skills benefit managers have-including interpersonal and listening skills, oral and written communication skills and problem-solving ability-they can easily be redeployed to a different department in a company.

But to make the transition successfully, whether it's becoming a benefit administrator with a different company or changing departments within the same one, benefit managers need to take command of their careers and make preparations for a switch, said Mr. Steckler.

"For those who take that turn, they can become very successful," he said. "For those who actually take it on, they grow."

Preparing both personally and professionally, he said, is the best way to make the transition. This includes accepting the pain that comes with change and also learning new skills to become marketable.

Those who do not adapt to their new environment or find new jobs "are dinosaurs," Mr. Duckworth said. "They are quietly going away."