BenefitsEngaged Workforce

Getting TBO Right: Listening to Client Needs

Outsourced benefits services have reached new levels of maturity, but further research is needed to help buyers obtain exactly what they need.

by Jeff Miller

On the HRO landscape, organizations can truly benefit from having a single outsourcing partner administer all their health and retirement benefits—from healthcare to defined benefit and defined contribution retirement plans, as well as retiree health and absence management programs. Total benefits outsourcing, or TBO, allows for the seamless administration of these needs—including vendor relations, employee communication, and self-service tools—all from a unified technology platform.
   
That’s all well and good, but in an increasingly global marketplace, multinational organizations have multiple layers of needs when it comes to benefits delivery. For these organizations, a TBO solution needs to be far more robust than the outsourcing programs that typically span regional geographies. From my own business perspective, that’s a crucial reality, since approximately one-third of Mercer HR Services’ benefits outsourcing clients are multinational companies.
   
For the increasing number of multinationals that stand to benefit from a truly global TBO solution, outsourcing providers need to define a global service delivery model. What’s more, they need to communicate that model to the broadest range of multinational clients across regional geographies. For outsourcing providers, it’s a matter of deepening their knowledge of client needs and, ultimately, sharing that knowledge for the good of the industry.
   
Thus, in collaboration with Harvard Business School (HBS) Publishing, Mercer is in the midst of a major research study targeting 50 to 60 multinationals across the three major regions: the Americas, Europe, and the U.K., and Asia-Pacific.  
  
The strategy is to present a summary of findings in a white paper for global HR leaders, which is slated for release in September 2008. Through interviews with HR and finance leaders at corporate headquarters and in regional offices, the goal is to glean first-hand insight into client practices and needs as they relate to benefits outsourcing and then to define and refine leading-edge global solutions.
  
Today’s HRO providers know that there is no short cut to a finely honed global solution. As a result, this research study is a rigorous program of fact finding across key research areas, all of which will help us better understand the top business issues facing organizations and their HR departments, buyers’ global needs and priorities, and the value propositions of other benefit providers. The study will also show how receptive target organizations are to a single-provider TBO solution on a regional, national, or global basis and what global employee data analytics look like.
    
Much-Needed Answers
For example, the research asks how the HR function is structured within business lines and across regions, and how will market trends such as the talent shortage and current economic downturn affect organizations? What is the status of companies’ benefits outsourcing strategies, and what are the current purchasing process and selection criteria for benefits outsourcing? Also, what are the perceived value propositions of outsourcing providers, and what are the incentives to switch providers?
   
These are the sorts of questions that must be answered in order for TBO providers to provide services seamlessly—both across benefits domains and, ultimately, across international borders. To the extent that TBO will help clients more efficiently manage their benefits programs and workforce demographics, it will also help their employees better realize the value of their employer-sponsored benefits. But first the research must be codified so we can get a better idea of what it really means to have a global benefits outsourcing relationship, what services can be best delivered across borders, and what  global value proposition an outsourcer must offer beyond its established set of regional capabilities.
   
There’s no question that for TBO providers, a tremendous revenue opportunity lies in getting it right. But the greater good lies in partnering with organizations to help them become more strategic and better communicate the true value of benefits programs to their employees.
   
In a global world, amidst an ongoing battle for talent, the best companies will need a seamless benefits strategy to attract and retain the best people. By developing an even deeper understanding of buyers’ global needs and refining TBO solutions to them, the industry can help such organization achieve their goals and more.
    

Jeff Miller is president of Norwood, MA-based Mercer HR Services. For more information on the study, contact him at jeff.miller@mercer.com.

Tags: Benefits, Engaged Workforce

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