DuPont Pharmaceuticals Writes New-Hire Prescription
AskJohn Ballard, a recent hire at the Wilmington, Delaware-based subsidiary of DuPontCompany. Like most new recruits, he wanted to begin his new job without any majordistractions. But he had natural concerns about his benefits.
“Iwas looking for new medical providers that would give me point-of-service access,”says Ballard.
DuPontPharmaceuticals, he quickly learned, offered a full flexible benefits plan with severalchoices within each of 10 available plans. Some were so complex that previously only a fewHR staff were comfortable explaining them. Fortunately, that problem was eliminated by thetime Ballard was hired. The company now offers a benefits package that includes Ayco’sNew Hire service -- a toll-free access to financial planning professionals.
“Theservice we now offer is in keeping with our corporate value of ‘Performance -- noexcuses,” says Maud Dayton, associate director of benefits and compensation.
AycoCompany, L.P., is a financial counseling firm based in Albany, New York. It providescomprehensive financial planning services to employees at more than 325 major corporationsnationwide.
SaysLinda Kempin, director of special services for Ayco: ‘Financial planning’ is a phrase that intimidates most employees.They often think it’s for people who are richer, smarter, or more sophisticated. Butthe less you make -- and the less you have to work with -- the more you need the help. Youcan’t afford to make mistakes.”
Indeed,education plays a strong role in several ways. For example, it increases workercontributions to one’s 401(k) plans. And according to one survey conducted bySecaucus, New Jersey-based Buck Consultants, employees who received some form of educationalso made less conservative investment decisions. Knowledge gave them the confidence totake more risks.
Daytonsays the program has assisted her employees in many ways:
- Provides investment advice for 401(k) rollovers
- Helps new hires make personal choices from a full range of BeneFlex enrollment options
- Boosts participation in under-utilized benefits, such as flexible spending accounts
- Provides direction on proper withholding, especially with many local tax issues
- Naturally increases participation in other financial planning programs
- Ensures each caller receives a personalized investment strategy
Servicesolves HR dilemmas
Accordingto Dayton, DuPont Pharmaceuticals had recently outsourced its health and welfare benefits.The start-up of the service was rough. New employees weren’t getting completeinformation on their benefits choices. “The outsource benefit administrator couldprovide information, but not guidance,” she says.
Also,in 1999, the eligibility for the 401(k) Savings and Investment Plan was changing from aone-year wait to immediate eligibility. Employees received the plan information in thefirst month and could enroll in the second month. But HR felt that new employees needed tounderstand the plan and the 30 investment choices available to them. Some employees alsoneeded more assistance with their W-4 forms (Employee’s Withholding AllowanceCertificate). “We hadn’t provided such a service before,” says Dayton.“We felt with the outsourcing, the change in 401(k) eligibility, and our activerecruitment, that this would be valuable.”
HRinitially worked with its vendor to develop FAQs to explain the service to the HR staffand a separate brochure to introduce it to new employees on their first day of work.“We incorporated the services into the new-hire orientation,” she says.
DuPont’sgoal is not only to deliver accurate information about benefits but also to provideemployees with some basic financial advice. Many of them like the personalized assetallocation recommendations for the company’s saving and investment plan, afterdetermining their risk tolerance profile and identifying their investment goals, she says.By discussing these issues early on, new employees have been able to reduce their new-hirestress.
Indesigning the program, HR worked with Ayco representatives to customize its needs. Daytonasked them to handle two phone calls from the employees. One call on the first day of workto discuss their W-4 forms. A second call to discuss the benefit choices once the employeereceived his or her personalized information from the benefit administration unit.
Employeescan talk with a counselor who walks them through all of their benefit elections. Topicsinclude making appropriate beneficiary designations and making decisions about a previousemployer’s qualified plan.
Someof the program features are:
- Easy integration with existing call centers
- Counselors’ expert credentials (Series 7 plus MBAs and CFPs)
- Calls monitored on a recorded line
- Call summaries maintained in proprietary online system so the caller can “pick-up”where he/she left off
- Feedback mechanisms and measured success
- Reports summarizing call activity available quarterly or as needed
Thesefeatures came in handy several months ago, says Ballard. “The call center was greatbecause it let me ask questions directly to the provider.” His customer servicerepresentative took down his name and address. Within a few days, he received a number ofbooks and pamphlets to help him make his decisions. “After that, the woman went downthe list of benefits to make sure I understood them all. She told me to call back anytimeI had a question.”
DuPontalso used Ayco’s service to help ease the transition of approximately 100 newemployees that joined the company through a West Coast acquisition. Many asked questionsabout the differences between the “old” and “new” benefit plans.
Whencompanies such as DuPont Pharmaceuticals relocate employees, the service program will alsohelp provide direction on adjusting withholding. Service representatives sort out localtaxation issues, along with a tax projection. Expats are advised about selecting medicalcoverage, receive advice about selecting medical coverage while abroad, and re-evaluatethe flexible spending account deductions.
Evenwith these services in place, the most frustrating part for HR has been feeding electronicdata to Ayco. The service provider hastherefore helped set up an interim form that DuPont’s HR generalists can use to faxinformation about the new hires.
“Whenwe have our system fully converted, we’ll be able to advise them of all our new hiresas a seamless part of our recruitment process,” says Dayton.
Participationstarted at 24 percent in the first quarter of last year. By the end of first quarter 2000,DuPont Pharmaceuticals’ employee participation had risen to 84 percent.
Throughinitial feedback, HR learned that some employees didn’t realize the program wasprovided by the company at no cost. “Once we began to get that message across,participation increased dramatically,” says Dayton.
Themost valued services, to date, are the discussions about the medical plan choice, thespending accounts, and the education about DuPont’s Savings and Investment Plan.
Clearly,DuPont Pharmaceuticals is taking a wise approach toward its new employees. According toMax Messmer, chairman and CEO of Robert Half International Inc., a specialized staffingfirm based in Menlo Park, California, employee orientations have been relegated to thebackground for too long. Businesses that rethink and revitalize these programs will putthemselves in a much better position to retain the talent they’ve investedconsiderable effort in recruiting, he says.