Deutsche Bank, with commercial banking and investment bank services, aims to be one of the world’s leading investment banks. And it depends on its employees to make that happen. Since it relies on employee competence and commitment to excellence in customer service, Deutsche Bank makes every effort to attract and retain the best talent and to become the employer of choice. Steven Vigneron, director of regional compensation and benefits for Deutsche Bank, says the bank began outsourcing its U.S. human resources services to Hewitt Associates in 1995 in an effort to serve the bank’s employees in the most efficient way possible.
The contract is for benefits administration, pension administration, actuarial services and consulting advisory services. Vigneron had ties to Hewitt in his experience with a previous employer, and he believed that there were few players that could handle a company the size and scope of Deutsche Bank. “Their expertise in benefits administration made the choice that much easier,” he says. Hewitt is now servicing the bank’s 14,000 plus employees in the U.S. along with 3,500 retirees.
No stranger to outsourcing, Vigneron recognized that there are service providers whose prices are lower than Hewitt’s. “But outsourcing is not always about cost savings. It’s also about efficiency and reliable technological services.” He says the true value of the bank’s relationship with Hewitt is employee satisfaction, which is consistently rated high. “Hewitt is a premium, class-act company.”
Investing in Value
Deutsche Bank is outcome focused and, therefore, is extremely pleased with the result of this outsourcing agreement. Employees are served with efficiency, and they get the knowledge feedback they need with cost-effective, timely data. Vigneron says Hewitt always is very responsive and its team of professionals know the bank’s benefit plans inside and out. He has been surprised at the extent of the teamwork in the relationship and feels Hewitt is an extension of Deutsche Bank. “It’s more than just outsourced services,” he explains.
Teamwork was evident in June 2000 when Deutsche Bank acquired Bankers Trust and thereby increased its presence in the U.S. “It was a huge challenge getting all the retirees and pension-eligible employees onto the Hewitt platform,” he recalls. Nevertheless, they communicated changes to the employees in a very effective manner, and the transition was basically transparent to the employees.
They manage their relationship through weekly meetings to discuss issues and strategies for handling the issues, and Vigneron meets with the Hewitt account manager every two weeks to talk about large-scope projects that they might want to work on together. “We also have had a number of meetings throughout the last couple of years where I would tell the Hewitt reps a little about our company and give them literature on our company. I went down and explained to them what the Bankers Trust acquisition means.” He distributes information to the reps when and if there are issues within the Bank that he thinks the Hewitt reps need to know.
“Our success is really based on our communication,” he comments. “If there is a change in legislation or an issue we need to discuss, they are on it right away. More often, they are proactive rather than reactive, which is the way any company wants to operate.”
Terrific Technology
Vigneron believes one of the greatest benefits of outsourcing to a supplier such as Hewitt is that it is always on the cutting-edge of technology. That has enabled the bank to have its first Web-based open enrollment, which started in January 2001. “Any employee at any time can go onto the Web site that we developed with Hewitt and look at what their benefit elections are. They can look at providers, change their primary care physician if they need to, and do a host of things from a benefits perspective.”
He says the next step is to enable employees to look at their pension balances and, ultimately, their 401k balances via the Web. He says that it’s estimated that 30-40% of learning is visual, so the ability of employees to see information about their benefits online instead of having to hear about it by interactive voice response system is a valuable enhancement to their benefits.
Hewitt adds value in other ways, often on the advisory/consultant side. “This year, for example, we were looking to change our long-term disability benefits,” says Vigneron. “But, after conversations with Hewitt, we realized it wasn’t worth it. They add many sorts of value because of their expertise in the benefits and the pension arena. They are a complete asset to us, and their service is second to none in the industry.”
Lessons from the Outsourcing Primer:
- Although cost savings is one reason to outsource, it is not always the most important consideration. The supplier’s professionalism, expertise and technological efficiency are other important factors.
- Outsourcing is a high-quality permanent solution for cost-effective “mainstream” technologies in HR, such as payroll. It’s also a high-quality impermanent solution for “tornado” technology, such as employee self-service models for benefits administration.
- Because of changes in legislature and technology, look for a human resources supplier that is proactive, rather than reactive.
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].