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And HR leads the way.
On National Employee Benefits Day last year, leaders of the sponsoring organization encouraged benefits professionals to celebrate by cranking up a theme song, “Takin’ Care of Benefits,” sung to the tune of Bachman-Turner Overdrive’s 1970s rock anthem “Takin’ Care of Business.”
The suggestion from the International Foundation of Employee Benefit Plans was intended as a fun way to get corporate benefits executives to give themselves a pat on the back. But the larger message was about showcasing the importance that benefits have in today’s workplaces. Corporate executives have come to realize benefits’ potential to impact recruitment, retention and the bottom line.
“We have definitely seen a big evolution in the role,” says Julie Stich, the foundation’s director of research. Benefits executives are now “involved with the finance and C-suite leadership of their companies—where strategic skills and results are more in demand.”
Indeed, in a time of complex economic and regulatory demands, where people resources are vital, the top HR executive needs to have either a command of benefits design or a benefits chief who is a close business partner.
Focusing on Strategies
New job criteria and greater responsibilities for top benefits professionals are emerging, experts say. They include:
“Years ago, the most common title after ‘benefits’ was ‘administrator,’ ” says Jason Hanold, managing partner and founder of Hanold Associates LLC, an HR executive search firm based in Evanston, Ill. “It’s really matured, expanded and elevated from that. Now it’s more likely to be ‘leader.’ ”
Most benefits leaders are tapped by and usually report to a top HR leader or total rewards executive. While benefits leaders have many job duties, they’re generally defined as management-level individuals who direct benefits and compensation programs and align them with strategic goals. Some organizations separate the benefits and compensation functions, but benefits leaders typically operate under and help define the total rewards discipline. Benefits leaders work to maintain a high-performance culture and an organization’s competitive position by rewarding and attracting top talent through compensation and benefits.
Job descriptions typically call for a strategic partner who can work with top executives. Leadership skills and strategic business acumen have now usurped required technical and functional expertise, Hanold explains.
Kay Curling, SPHR, senior vice president and chief human resource officer for Salient Federal Solutions Inc., agrees: “HR at its best is not about being administrative experts,” she notes, “but rather being transformational partners.”
An executive presence, a strong ability to influence people, creative thinking and unquestionable credibility top the list of the most-wanted skills in benefits professionals, Hanold says. “It’s now beyond ‘How do we control costs?’ It’s ‘How do we influence the population?’ ”
Developing the Road Map
Pam Grove, senior director of benefits and HR operations at Land O’Lakes Inc., has experienced the changing role of the benefits leader firsthand.
Since joining the St. Paul, Minn.-based farmer-owned food and agricultural cooperative in 1999, Grove has helped lead the Fortune 250 company through benefits outsourcing and health care plan changes that have resulted in better service—and more than $35 million in health care savings since 2004.
In addition to financial results, she has gained impressive participation rates in the high-deductible health plan introduced in 2007. When the company rolled out the plan, Grove and members of her team visited 100 locations nationwide. She expected enrollment to be about 35 percent in the first year, but her team’s efforts led to 72 percent of employees choosing this lower-cost option. The 10,000-employee company has maintained the cost savings, Grove says, with 83 percent of employees now choosing high-deductible coverage.
“It’s a far cry from the days of ‘OK, let’s do annual enrollment,’ ” Grove says. “We really don’t have transactional staff in-house anymore. Now, our internal benefits team is really much more focused on strategy, planning and vendor management. It’s about directional planning and developing that road map.”
In fact, 10 years ago, Land O’Lakes officials decided to explore benefits outsourcing to improve service and leave the old definitions of benefits administration behind. At the time, benefits were handled internally, but HR leaders concluded that benefits administration just wasn’t an activity that contributed strategically to the company. The HR team had already been outsourcing 401(k) administration to an HR consultant for about a decade. It seemed to make sense to shed administration of health insurance and pensions.
“Doing benefits administration wasn’t a core competency—nor should it be,” says Grove, who also helps set the company’s compensation and total rewards strategies.
While the resulting cost savings was important, it wasn’t the primary driver behind the decision to outsource benefits administration. HR leaders wanted to dedicate time to strategic activities that would affect the bottom line.
“We were changing how HR was viewed, and we didn’t want to be administrative,” she says. “We wanted to be viewed as a top business partner involved in decision making.”
Grove has a passion for this. “My job is all about balancing employees being happy with the business being competitive, so benefits leaders really have a lot of pressure on them,” she says. “The worst thing you could possibly hear is that someone doesn’t want to work for our company because of the benefits.”
Making the Business Case
Health care and health care reform top the agenda for Diane Heyman, SPHR, global head of compensation and benefits at Hilton Worldwide.
“As benefits professionals, we’re being looked to by our company’s leaders to make sense of what to do with these new laws, which will have a significant impact on most businesses,” she says.
Heyman has spent much time considering “ways we can change the designs of the plans we offer and thinking innovatively about how to offer the best benefits to our team members while managing costs.”
She has shared ideas and practices with benefits leaders inside and outside the hotel industry. “These discussions have been critical,” she says. “It’s the duty of our benefits team not just to understand what our team members want but also to offer the business case for making changes.” To make the business case, Heyman’s team “offers more-meaningful analytics, competitive data and information to help our executives make the right decisions.”
A 20-year veteran of HR who holds a bachelor’s degree in business administration and marketing, Heyman has seen a shift in how the benefits function works within the business.
“Benefits is no longer about just providing employees with traditional plans,” she says. “Our team has become partners with the business in how to offer competitive packages.”
For example, the company recently moved from separate vacation and sick-leave policies to a single paid-time-off system after competitive research and employee surveys showed that time-off flexibility ranks high among employees.
Gauging Job Prospects
Outsourcing and technology affect benefits professionals’ employment picture, in some cases stunting the growth of low- to midlevel benefits jobs, according to the latest data from the 2012-13 edition of the Bureau of Labor Statistics’ Occupational Outlook Handbook. That trend is likely to continue, agency officials predict.
Even as health care costs rise and coverage options change and expand, employment of benefits managers is expected to grow just 3 percent from 2010 to 2020—considerably less than the 14 percent average projected rate of growth for all occupations.
That means candidates can expect to face competition for available benefits jobs. Those who have master’s degrees, certifications, or experience working with compensation or benefits plans should have the best prospects. A mix of corporate and consulting experience also may be a plus, Hanold suggests.
There’s evidence that benefits will continue to grab the attention of the C-suite as:
Nearly 90 percent of global benefits directors at 140 multinational companies, for instance, say employee benefits are on the agenda for the boards and senior managers of their companies because of the costs and risks of benefits programs, according to the 2012 Corporate Governance of Global Employee Benefits Study conducted jointly by Aon Hewitt and the American Benefits Institute last spring.
Climbing the ‘Scaffold’
There may not be one typical career ladder that leads to a benefits leadership role, experts say, but wide-ranging experiences may help.
Just ask Grove and Curling. Before becoming a senior benefits professional at Land O’Lakes, Grove was a U.S. benefits manager, an HR information systems and benefits/compensation manager, and an HR generalist at several multinational companies.
Curling, Salient’s senior vice president and chief human resource officer, parlayed a variety of HR and benefits experiences into a C-suite post at the 1,200-employee federal information technology and engineering company in Fairfax, Va., two and a half years ago.
With a bachelor’s degree in business education, Curling entered the HR field years ago to run a training department.
“I was an adult educator with a business background,” she recalls. But when tough times hit and training budgets were slashed, she knew it was time to broaden her skills.
That led to 20 years of project management and HR leadership positions overseeing benefits, compensation and HR information systems at three federal contractors.
“I call it scaffolding; I’ve taken lateral moves into project management,” she says. “You can have a diagonal move, horizontal or even downward. All have opportunities to build your career.”
For example, Curling was asked early in her career to take on project management for a company client. The role lasted six years and led to additional billable work.
Project management “allowed me to learn firsthand how the business was run,” she says.
The Benefits of Credentials
For benefits professionals looking to take on greater roles—or for the chief human resource officers looking to hire them—advanced degrees and nationally recognized professional credentials can help establish credibility and demonstrate hard skills and knowledge, experts say.
Jason Hanold, managing partner and founder of HR executive search firm Hanold Associates LLC, notes an increase in demand for master’s degrees as proof of demonstrated broader business acumen—and not necessarily in HR studies. “The emphasis is on being a continuous learner,” he says.
The following are among the most focused certifications:
Certified Employee Benefits Specialist. The CEBS certification is administered by the International Foundation of Employee Benefit Plans. The Wharton School of the University of Pennsylvania oversees academic content and standards. Through the program, HR professionals can earn designations in three areas: group benefits, retirement and compensation. Last year, the health care section of the curriculum was revised to reflect changes brought about by health care reform. The program consists of eight courses.
Graduates currently number 12,000 in the United States, with 300 to 400 new graduates every year, says Linda Bielski, director of CEBS field services. She estimates that about one-third of the graduates are corporate human resource professionals.
Certified Benefits Professional. Administered by the WorldatWork Society of Certified Professionals, the program that leads to this certification focuses on designing and administering benefits plans, complying with legal and regulatory requirements, working with benefits service partners and outsourcing, and communicating benefits information. Seven exams are required.
Certified Compensation Professional. Also administered by WorldatWork Society of Certified Professionals, the program that leads to this certification integrates compensation programs with business strategy. It focuses on designing and administering base and variable pay, complying with U.S. legal and regulatory requirements, and effectively communicating compensation information. Nine exams test skills learned.
Hanold says he has seen a keen interest among his clients for a compensation designation.
At another point, Curling found herself directing a team of nurses providing advocacy services to employees. She took night classes at nursing school so that she “would have a fundamental understanding of the medical issues that the nurses may encounter.”
Curling was also involved in a dozen buy-side acquisitions prior to joining Salient. She views those transitions as important steps in her career. “It puts you directly in the company of the C-suite,” she says. And the acquisitions helped her learn how to execute strategies quickly and effectively: Less than 18 months after forming and leading an HR team at Salient, Curling drew on her background to roll out an HR information system, launch a set of employee benefits plans with more-robust benefits and lower costs to employees, put a performance management system in place, design a compensation program and launch Salient University, a companywide online learning platform.
Those changes proved beneficial. The voluntary attrition rate decreased by 20 percent over 30 months, saving more than $3 million and helping to establish a foundation for coming acquisitions. And Curling says new compensation and benefits programs help create an environment where employees can build great careers, work on projects and programs of national importance, and excel on high-performing teams.
Curling, who oversees a staff of 11, credits mentors and partners with helping her increase her knowledge and skills to link benefits and HR with business strategy.
“I sought out mentors such as CFOs and built relationships with key departments like contracts, finance and legal,” she says.
To broaden skills and business understanding, Curling recommends that benefits professionals consider:
“In this field, no two people get to the top the same way,” she observes.
Many influences will shape the future role of benefits professionals and build on the trend to make benefits more strategic. It’s a path with more challenges along the way.
“Benefits used to be kind of a sleepy little backwater,” recalls Ray Goldberg, vice president of benefits strategy and economics at Marsh & McLennan Cos., with 53,000 employees.
As benefits became more regulated, practitioners of the discipline became focused on compliance rather than planning, he says. Now the rate of increase in costs serves as a hot button and attracts attention from senior business leaders.
“That has provoked some soul-searching over what we are doing and why,” he adds. “The big question is ‘What’s our role? How much of it belongs to us, and how much belongs to employees?’ That is a subject and a journey that many of us are still on.”
The author, a contributing editor of HR Magazine, is a business journalist based in the Washington, D.C., area.
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