Accounting for the Unmeasurable

Call center metrics typically gauge hard numbers. It’s time for a better scorecard.
By Felicia Palmer
Since the introduction of outsourced call centers in the late 1980s, the HR industry has come a long way with measuring delivery performance―or have we?

Prior to outsourcing employee service, companies’ measures of administration outsourcing delivery were absent or random at best. Plan sponsors didn’t have “dashboards” reporting performance against established timeliness and accuracy standards. When an error occurred, there was an expectation that the service provider “would make good” on restructuring records or communicating adjustments to plan participants, including (God forbid) request for return of overfunded plan distributions. Formal service level agreements (SLAs) did not exist.

With the advent of call centers (first established in the 401(k) arena), service providers began to measure delivery of service, but the approach primarily focused on measures of access to systems (IVR, Web, live response, etc.) and closure of cases, not overall client satisfaction. And, while standards have evolved during the last 20 years to include more aggressive levels of response and some quality-oriented measures, today’s service levels still tend to focus primarily on measures such as “speed of answer,” “systems availability,” “case management resolution” and “timeliness of data uploads.” Today’s performance standards are fundamentally quantitative―i.e., restricted to items that are easily measured―while “subjective” measurement of buyer satisfaction is missing or minimal at best.

In TPI’s consulting role, our clients often share with us examples of service provider dashboards heralding “95 percent participant satisfaction” or “99 percent systems availability” scores. They tell us that provider performance for SLAs is consistently high, month in and month out. The dashboard is lit up like a Christmas tree, which is all well and fine, yet these same plan sponsors suggest that they are not fully satisfied with their outsourcing relationship! Why?

When we ask clients what they really want in a relationship, the list includes the expectation for their provider to:

  • Meet commitments, deadlines, and milestones;
  • Deliver accurate and complete responses to participants;
  • Fix root cause of errors so same problem does not recur;
  • Commit to the relationship adequate resources whose users are empowered to implement changes;
  • Actively alert the client to potential problems before they occur or escalate; and
  • Keep the client informed of upcoming changes to current services as well as future services/enhancements.


Granted, these standards of satisfaction are not all easily measured, but they are meaningful to the buyer, and it is time for them to be acknowledged in the service relationship.

Lately, TPI has seen the emergence of an “account management scorecard” to do just that. The scorecard is a supplemental list of standards—in addition to traditional measures—that focuses on subjective aspects of provider performance. The scorecard seeks to measure outcomes such as the avoidance of significant errors, the longevity and responsiveness of the service team, the quality and efficiency of project management, the ability of the service provider to recover from operational failures, and—simply—the satisfaction of key stakeholders like the corporate benefits staff.

In devising the scorecard, the significance or “severity” of the error should be considered in establishing SLAs and their associated service credits (or “fees-at-risk”) for triggering the SLA. Severity could be measured in financial impact (for example, a pension calculation was overestimated and not discovered for a year), the number of employees affected by the error (such as 10,000 account statements were delivered with incorrect information) or by the visibility of the error (if an executive’s nonqualified plan distribution were calculated incorrectly). Such “severe” errors carry higher fees-at-risk due to their significance.

When creating your firm’s scorecard, you should initially seek to define “stakeholder satisfaction.” Caucus with your team to articulate what is and is not working with your service provider, and use this input to develop key performance categories and specific measures of satisfaction. In addition, gather insight from the market. Ask your service provider for alternative SLAs used with other clients, visit with other HR/benefits professionals to get their ideas, and consider benchmarking your SLAs with a sourcing advisor. Note that you don’t need to wait for a contract renewal period to do this.
Industry practitioners are often heard to say, “We work in an imperfect business.”
However, the premise that benefits administration has been and always will be imperfect is now being challenged by clients. Delivery of good service “most of the time” is no longer sufficient in a competitive market. Service providers will likely resist subjective measurement of their performance, but the reality is that true quality cannot be captured solely by conventional SLAs. When faced with fees at risk for meaningful performance, service providers will be motivated to change their behavior, processes, and/or systems to deliver consistent quality.

Are you ready to participate in the SLA revolution?
Felicia Palmer is a director on TPI’s CHRO Services team. She can be reached at 

Tags: Consultants & Advisors, HRO Today Global, Professional Contribution

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