Best Human Resources Outsourcing Relationship
2000 Editor’s Choice Award
Hewitt Associates/Columbia HCA
From the Editor:
What is impressive here is Hewitt’s ability to accurately reflect the nature of Columbia’s commitment to provide compassionate as well as effective benefit administration to its employees. Columbia hired Hewitt to provide cost savings so it could concentrate on its core competency. But Hewitt went one step beyond and continued to emulate Columbia’s corporate culture. The lesson here is companies can continue to retain their character even when they outsource.
With about 900 entities, the top priority at the corporate level of the Columbia/HCA healthcare network in 1997 was to ease the burden and strain of handling the human resource (HR) functions at those various locations by centralizing and standardizing the process. Columbia outsourced its HR functions for, perhaps, the most common reason that buyers enter into such agreements-to save money and facilitate compliance. But the story of the relationship with Hewitt Associates LLC as Columbia/HCA’s outsourcing partner is far more than a matter of money or expertise in HR functions.
Added Value
Having discovered the benefits of outsourcing in 1989 when it outsourced its HR record-keeping to Hewitt, the healthcare company decided in the late 90s to expand the relationship to include defined contribution services, defined benefits, and health and welfare programs.
Although the Columbia network included approximately 300 hospitals at the time, many of them had suboffices (such as an ambulatory surgery center or home health organization), which increased the payroll entities to about 900, each one facilitating a few thousand employees. Besides better service for its employees, Columbia felt it would gain leverage in its ability to negotiate benefits through consolidation.
Hewitt’s first step was to create a call center so that there would be one centralized area for HR inquiries. Hewitt also created a special unit within the call center just for the HR directors in the field, which allows them to get expedient, accurate and detailed information from representatives who have a higher level of training.
“Hewitt truly partnered with Columbia,” comments Sabrina Ruderer, assistant vice president of health and group benefits at Columbia/HCA. She explains that Columbia has a very strong presence in the south and southeast and, therefore, wanted its call center to have that same southern presence. So Hewitt created a new business center in the Florida market; and for several months Columbia was the only client in the center.
Then Hewitt went even further. Since the majority of Columbia’s employees are caregivers, Columbia wanted the call center staff to be a caring group. “We wanted Hewitt to populate that benefits center with compassionate folks because we wanted to pair up our nurses and caregivers with someone on the other end of the phone who was of similar nature,” Ruderer explains. “Hewitt did an excellent job of recruiting the appropriate call center representatives. They modeled the benefits center after our needs, which we felt was an added value. They understood the bigger picture of Columbia and what our company was about.”
The Benefits of Continuity
“What some companies might consider a challenge is something that Hewitt and Columbia put on their “to do list,” Ruderer says. “And then we figure out a creative way to accomplish it. She adds that Hewitt never says “no,” and never says, “we haven’t done it before, so we are not going to do it.”
Ruderer thinks that their can-do attitude is a result of the tight relationship that they have developed over the years. They took a year to plan the outsourcing; digging deep to find out what makes the Columbia benefits department tick and the best way to implement the
services. The engagement team and the implementation team then continued into the maintenance mode. “So I am dealing with some of the same managers that I was dealing with on day one,” she says. “That continuity has meant so much to me and my team because the directors and managers on my staff know exactly where we started. That has been very beneficial to us.”
The Hewitt account manager has also been on the account for a number of years and has seen the growth of Columbia and the direction the organization is taking. “Whenever we want to escalate our arrangement or an issue or idea comes up,” Ruderer explains, “she and I work together to prepare material for presentations to the senior management, with whom she has developed a relationship; So our strategic planning is developed together. It helps that she has eleven years as a client with the corporation, because I have only been here for four years; so she helps me out a great deal.”
Building on Strategy
Ruderer says that Columbia is looking at how the HR function can be an even more strategic player in the healthcare organization. “Our goals change because the healthcare industry continues to change,” she says. “The balanced budget act has definitely squeezed the profits of health care today. When we look at tightening our belt, the same questions are extended to Hewitt. What can we do without? What technology has become so sophisticated that it can help improve a process by being more efficient?
The original outsourcing agreement between the parties is for a period of five years. Hewitt has committed itself to the account and, in only two years, the parties have built a strong team together. Columbia has already begun looking at extending their relationship.
Lessons from the Outsourcing Primer:
- Creating a special unit just for directors allows a company’s important executives to receive accurate and detailed information from representatives with a higher level of training.
- Hewitt placed its call center in Florida to create a southern presence since most of Columbia’s employees hailed from the south and southeast.
- Hewitt mirrored Columbia’s corporate culture when it populated the call center.
- Take your time when starting an outsourcing relationship; Hewitt took a year to plan this one.
- Continuity of staff on both sides is a plus.
About the Author: Ben Trowbridge is an accomplished Outsourcing Consultant with extensive experience in outsourcing and managed services. As a former EY Partner and CEO of Alsbridge, he built successful practices in Transformational Outsourcing, Managed services provider, strategic sourcing, BPO, Cybersecurity Managed Services, and IT Outsourcing. Throughout his career, Ben has advised a broad range of clients on outsourcing and global business services strategy and transactions. As the current CEO of the Outsourcing Center, he provides invaluable insights and guidance to buyers and managed services executives. Contact him at [email protected].