Molson is a global beer company with operations in Canada, the U.S. and Brazil. They have over 6,000 employees around the world, and in Canada they are the leading brewer with a 45% share of the market.
They recently, successfully, outsourced their benefits and pensions administration. HR.com spoke to Ben Schwartz, Vice President, Global Compensation & Benefits, about what they did.
To access a schedule of upcoming Reality HR interviews, please click here.
To access our archived Webcasts and Podcasts, please click here.
HR.com: What was the business situation that led a large, stable and sophisticated company such as Molson to consider benefits administration outsourcing?
BS: When I joined Molson in 2002, I was asked to make a quick diagnosis of what needed to be done in the pension and group benefits area. I noticed that because we were organized by regions, every process in pension and group benefits administration was done at least three different ways. Also, people were doing this work but there was no detailed process behind them, and as a result we were spending way too much time and money, and facing too much vulnerability in terms of our processes being people dependent. It prompted me to look at how we could think holistically, as opposed to regionally.
HR.com: Why did you consider outsourcing, instead of coming up with an internal process?
BS: We have an internal business services organization that bid on this work. As owner of the process, I had to weigh the pros and cons of doing this internally. Outside vendors had already "been there, done that". They had experience and matured technology. To do it internally would have meant Molson would need to ramp-up a competency we did not have completely. We would have had to engage consulting firms just to get started on some of the basics: documenting the current process, stabilizing it, then reengineering it into a ''to be'' process-which would have cost at least a quarter of a million dollars. We would have had to invest substantially in technology, too. At the end of the day, as an executive of the company, I felt our core competency was making beer, not developing the best processes of pension fund administration. Others had already done that.
HR.com: Which outsourcing vendor did you choose?
BS: We had competitive bidding between the top three HR actuarial outsourcing providers in Canada, and selected Towers Perrin. They were our actuarial consultants before we ran the competition but I didn''t just want to give them the business unless they could demonstrate they had superior capability. They have a nucleus of significant clientele in Canada to whom they were already providing outsourcing. We went to see their call center and everything was really well buttoned down and they impressed me with having a real handle on the process. And they were willing to be very aggressive on price.
As well, we have divested and acquired a number of companies over time, and those companies left a legacy of some complexity from a pension perspective. Towers Perrin had a lot of this grandfathered and they also had the legacy information in their possession already, and I had to assess the risk of passing the baton over to another organization. Another organization would have had to ramp-up considerably to get fully conversant on all these orphaned plans. We would have risked vulnerability and potentially lose quite a bit of history.
HR.com: Were there any other anxieties you had in handing over to an outsourcer?
BS: It was a significant cultural shift. People in this organization were used to going to their local HR person, whom they likely knew for 15 or 20 years, to get information they needed, to get benefit forms filled out, and to have claims properly completed. I was concerned about moving the employees to the self-service/call-center model. There are a number of unions that represent our people and they would have to be on side.
Even though the new system is well utilized now, and we''ve ramped up since our deployment date of July 1, 2003, we still need to communicate to our workforce that this service is in place, that it is world class, and if you were to ask your friends about their experiences they''d tell you the Benefit Centre Representatives (BCRs) of Towers Perrin are very knowledgeable and extremely customer focused.
HR.com: Tell me about the implementation.
BS: We had a Molson team established to represent all the regions. At the kick-off address I told the team, "We have to think ''John Molson'' here. Anybody who is coming here with a parochial, regional mindset should leave the room. What we need to do is to develop, before we leave these meetings, one process. So we all have to compromise in the way we are doing business, to the way we need to do business down the line." So one key was to have people seeking company solutions first, instead of thinking with a regional mindset.
Another key to success for these kinds of implementations is to be on top of the details. Keeping on top of the details meant we had meetings every week with people from the key team from Molson and the core team from Towers Perrin. We were on conference calls every Thursday morning for months and months before our actual deployment date. As we got to about three months prior to deployment, those calls increased to twice a week. There was a working group on Tuesday mornings, and a larger group working on the macro picture on Thursdays. We had to be totally on top of the minutiae of the details, because God knows there were many of them.
Even now, post deployment, we have a weekly call to handle issues so we can be proactive. We make sure any issue escalated from the call centre is dealt with. I hear about it personally to make sure the experience of the Molson employee calling the benefit center is seamless.
HR.com: What kind of issues did you face over the course of the implementation?
BS: A lot had to do with getting this all up and running in a timely manner. There were issues of testing what we were trying to do before deployment-both by Towers Perrin, then by the Molson team well before it was in production.
Another issue was that the BCRs had no deep experience with our plans, so they had to be educated weeks before our deployment date on the array of benefits and pension plans we have, which are many and complex. The problems at these early stages were getting the BCRs ramped-up in their experience about Molson plans, using case management tools and so on, where they could learn from each other the intricate nature of our plans. Another challenge, too, is that we have employees that speak two languages: English and French. The BCRs had to have a very high level of competence in both languages.
HR.com: How did you train the Benefit Centre Representatives?
BS: Training is an ongoing process. One method is going back and reviewing the calls and discussing how they could have been handled somewhat differently. Also, whenever Molson is about to deploy some new document or policy, the team leader gets together with staff and fully briefs them on the nature of the change, the intricacies and the impact of the change and the anticipation of call volumes, etc. In that way, the training and the knowledge-building is constantly there.
I also, particularly at the early stage of the deployment, asked senior members of my staff to go to the Molson Benefit Centre to monitor the calls to ensure the employees were being served in the language of their preference, to audit the quality of the language and the quality of the response. We needed to win the confidence of our employees from the start and we knew that our level of credibility was only as strong as the last call we took. We took every call seriously and we learned from each one of them.
HR.com: How did you tell employees about the new benefits administration process?
BS: We worked with the Towers Perrin communication team, and they were exceptional in preparing communication vignettes; little snippets of information that were sent out to employees´ homes. They were in color and professionally laid out. We did not want these to be heavy reads, which often happens with benefits information. We wanted to have a steady stream of information filling the period up to the July 1st deployment date. That really helped address anxieties on the employees'' part. Any questions were addressed beforehand, and the actual deployment was seamless.
HR.com: Now that it''s been in place for awhile, are there any lessons you can share?
BS: It''s important to have strong members on the teams, both from the vendor and your own company. I insisted with Towers Perrin that no names be advanced to work on this project unless they were "A" players; people on a succession path to partnership in their firm. So, lesson 1 is don''t compromise on talent.
The second lesson is to make sure they are meeting regularly, in either conference calls or live. Really drill down into the minutiae of the details.
Finally, I think it is important that when you go through the battle and you make it, celebrate your success. We took these teams out and we really celebrated.
Ben Schwartz graduated with a Bachelor''s Degree in Industrial Relations from McGill University in 1979. He has 24 years of progressive Human Resources experience. Ben was Director Human Resources for CAE Electronics Ltd. in Montreal before he joined Pratt & Whitney Canada in Longueuil, Quebec. There, he spent five years as Director Human Resources and process owner of Staffing & Selection, Compensation & Benefits for Pratt & Whitney Canada worldwide. Ben joined Molson Inc. in Montreal as Corporate Vice-President Global Compensation & Benefits. He´s responsible for the strategic leadership of this function in Canada, the U.S. and Brazil.