Kim Ferrarie, senior vice president of human resources, Air Liquide. Photographer: Arthur Meyerson
When Kim Ferrarie, senior vice president of human resources, arrived at Air Liquide in Houston in the spring of 2009, she saw immediately that change was necessary.
While Towers Watson (Watson Wyatt at that time) had been handling the company’s actuarial processes and supporting Air Liquide with pension administration services for the past two years, there were still some inefficiencies. “As part of our co-sourcing approach, it had been HR’s responsibility to interact with employees regarding their retirement benefits. But with the growth and volume of our employee population, we weren’t meeting all of their needs,” says Ferrarie. “We had only one HR staff member managing our pension program, and most calculations required manual data corrections. Timeliness and accuracy were definitely lacking.”
She adds, “Managing this administrative function ourselves was no longer effective. It was clear that these practices were simply unsustainable, and there was no way we could continue to move forward in this manner.”
Her vision for change: Move the company’s U.S. pension plan to a full outsourcing model.
Putting the wheels in motion
Although Air Liquide today employs more than 42,000 people internationally, it remains a high-touch company. Some senior leaders were initially doubtful about the outsourcing initiative, concerned that employees would miss Air Liquide’s “personal feel” if HR no longer managed the pension program.
But HR successfully made the case that outsourcing was a promising solution. “Without outsourcing, we’d need to hire more staff to keep up with employee requests and inquiries. Also, we weren’t the same company as 10 years before,” says Ferrarie. “Regulations were constantly changing, and we needed to be certain we were keeping up with the evolving policies and were in compliance.”
Chris Schulz, Air Liquide's senior director of compensation and benefits (left), with Don Harrison, Towers Watson account director
For Chris Schulz, Air Liquide’s senior director of compensation and benefits, there was no downside to this initiative. “Outsourcing would move our administrative tasks outside of the company, allowing HR to do more of the strategic work with business units on an ongoing basis,” he says. “And using an outsourcing model also would give us access to the appropriate tools and products designed to best meet the company’s needs.”
As soon as management was on board, the HR staff quickly got to work. They immediately hired Towers Watson as Air Liquide’s outsourcing partner. “We knew Towers Watson was in the best position to partner with us because they had a strong familiarity with Air Liquide’s specific plans, and they had already demonstrated their expertise in pension administration,” says Schulz.
In an extremely tight time frame of only three and a half months, Air Liquide and Towers Watson created an effective outsourcing solution they dubbed Air Liquide Pension Services (ALPS).
The first step was to create a service center. Staffed by pension specialists, the call center helps employees review and learn more about their pension benefits.
Next came the launch of an online pension support tool that provides comprehensive retirement planning. This employee self-service website — managed through Towers Watson’s BenefitConnect — allows employees to access their personal pension data and model their pension benefit at various retirement dates.
“We established ALPS because we wanted to create a better user experience for participants to learn about their pension benefits and the retirement process,” says Stephanie Lamoreaux, director of benefits.
Investing in communication
Communicating the changes to employees was an essential piece of the puzzle. “It was very important to invest in employee communication, because this was a big change for the workforce,” says Don Harrison, Towers Watson account director. “Employees had to be completely comfortable with the new service center and with BenefitConnect, so that they would actually use these tools.”
Air Liquide's Stephanie Lamoreaux, director of benefits, with Towers Watson consultants Mickey Stroud (left) and Anthony Scattone
With the help of Towers Watson, Air Liquide’s HR staff communicated with employees via e-mail, home mailings and intranet newsletter articles. This included all active plan participants, as well as term-vested employees, and their spouses.
A successful unveiling
Feedback from Air Liquide employees has been highly positive. Within its first month of operation, the service center received more than 450 calls — though only 100 had been expected — and earned customer satisfaction ratings of 97%.
“It’s all about delivery," says Schulz. “We didn’t change any of the plans, but rather drastically improved the service. Employees are thrilled with the level of efficiency provided by the self-service tool and the call center.”
According to Lamoreaux, “This project has been tremendously successful and has taken HR to another level. It has created momentum for the discussion to outsource other components of HR, such as health and welfare.”
Ferrarie agrees. “This project has far exceeded our expectations. We worked nonstop with Towers Watson right by our side. It’s all about trust, dedication and teamwork. They understand our business, our culture and our employees. They insisted we could make outsourcing a reality, and we trusted them.”