Right up until the fourth quarter of 2012, Boston-based footwear manufacturer New Balance was still using paper-based benefits administration processes.
"Paper works in simple environments with simple plan designs [and] not many moving parts," said Glenn Haskell, benefits manager at New Balance.
For years, New Balance was largely a manufacturing, marketing and sales organization, not so much a brick-and-mortar retail operation. The company had about five locations with approximately 300 to 500 employees in each.
"With that type of density of population, it's relatively easy to conduct a paper-based system," Haskell said. "And it worked, and we were able to provide excellent benefits for our employees for [many] years."
But things changed, and New Balance wanted to increase the complexity of its benefits program and add more options. Additionally, in keeping with its strategy to deal directly with the consumer by opening more outlet stores -- 60 nationwide at last count -- the company was becoming more geographically dispersed. It currently employs around 2,500 employees in the U.S. and each new store has 12 to 15 employees, according to Haskell. "Their benefits need to be communicated and administered across a now very dispersed population across the country."
This new world order just didn't lend itself to paper.
"Sending snail mail enrollment forms cross country or faxing them was just becoming more and more cumbersome. We needed an automated solution that was going to streamline processes and allow us the ability to grow," he said. "We knew that there were a number of solutions out there to help us achieve the efficiencies we were looking for."
Understanding the benefits
Automated benefits enrollment systems are gaining popularity because they're much more efficient -- and effective -- than the paper-based processes, according to Jason Averbook, chief business innovation officer and HR expert at cloud consultantcy Appirio, based in San Francisco.
"With an automated benefits enrollment system, a process that used to take a month to two months within an organization, now takes two weeks," he said. "Automation gets rid of all the paper processes and gives organizations a huge way to communicate to employees the actual value of their benefits. But it's not just an efficiency play, it's also an effectiveness play."
For larger companies, though, it's often easier to use the benefits modules that come with their core HR systems than to look for a standalone benefits enrollment and management system, Averbook said.
"But if you don't have one of those expensive core HR systems, there are a lot of systems in the marketplace for smaller to midsize companies," he said. "The downside is that you have to do a lot of interface work from your core systems to these benefits systems and then from the benefits systems back into the core HR payroll system."
Benefits portal helps employees, administrators
After checking out the benefits enrollment systems of the key players, New Balance decided on the HR InTouch Marketplace from Benefitfocus Inc. in Charleston, South Carolina. The marketplace is a private online portal designed to help employers streamline online enrollment, employee communication and benefits administration.
New Balance decided on Benefitfocus in the first quarter of 2013 and went live on the system five or six months later.
"From my perspective, as an administrator, it makes my life easier and the lives of the people who work for me easier," Haskell said.
Before Benefitfocus, whenever a new employee was hired, their data had to be manually entered into anywhere from four to eight different databases, including the Blue Cross system, Delta Dental, Express Scripts and the Vision Service Plan, he said.
"From my staff's perspective, this has enabled us to do some other things that we might not have been able to do," Haskell said. "Now we're not entering all this data any longer, and we have time to do new and better things, and maybe even add some benefits."
As for the employees, the demographic is changing and the company is bringing on more and more younger people who expect to be able to self-serve and do things on their own, he said.
"They want to make inquiries on their own and go online to a site and gather information themselves without having to pick up a phone," Haskell said. "From a communications perspective, it was really an enhancement."
HR InTouch Marketplace helps Haskell in his role as a benefits administrator because now he only has to update changes in one place, and he can do it himself.
"I've worked with systems before where you almost have to call IT whenever you want to change something," he said.
Haskell said the easy-to-use reporting tools in the HR InTouch Marketplace help him access the information he needs to make the best decisions about benefits for the company.
"I've worked with human resources systems in the past that have reporting capabilities that are really cumbersome to work with," he said. "Most human resources people aren't terribly technically sophisticated, and it really presents a challenge for those of us in HR to get the data we need easily. We were really pleased with the intuitive nature of the Benefitfocus system. Now, I can get the information I need, accurately, in two minutes."
Although New Balance has had success with an automated benefits management system, it might not be the answer for everyone. The case becomes more compelling as the size and sophistication of the benefits package and the size of the company increase.
"If you're an employer with 50 employees and you offer medical only, I don't know if I would take the time, energy and resources to automate HR benefits to administer so simple [of] a benefit program," Haskell said. "But the case is more compelling once you get over, say, 500 employees, and once you start putting four or five options onto your benefit menu."
Averbook's opinion is that most companies that are not using automated benefits administration systems are behind the times.
"But at the same time, if you have 10 employees or 20 employees, and you're a small law firm and you can get everyone in the conference room and talk to them about their benefits and then sit with them one-on-one and help them enroll, then of course, these systems are not as necessary," he said.
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