Why employers are transforming specialist reward and pensions staff into benefits generalists

A pensions specialist recently expressed concern about a plan by their boss to transform them into a benefits generalist.

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If you read nothing else, read this…

  • Many employers are replacing benefits specialists with generalists.
  • The shift from defined benefit to defined contribution pension schemes is a driving factor.
  • Benefits professionals can broaden their knowledge base by attending conferences and networking with industry peers.

Not only did the specialist fear the learning curve involved in understanding the complexities of issues such as pay setting and share scheme management , but they also questioned how they could find the time to expand their knowledge base in light of their already-enlarged remit.

A reduction in the size of benefits teams, as well as their budgets, is helping to drive the trend for benefits professionals to expand their knowledge base, particularly in small and medium-sized enterprises.

Dale Critchley, policy manager at insurer Friends Life, which has been acquired by Aviva, says: “It’s something we are seeing and something we’ve actually done within our organisation, so it’s not something that’s limited to smaller employers.

He says the provider, along with many of its employer clients, is dispensing with the pensions specialists within its benefits team because of the shift from defined benefit to defined contribution pension schemes , with providers and trustee boards picking up this workload. Although this move is not a new development, it is still happening in a number of organisations.

Growing reliance on benefits consultants

For some benefits professionals that, so far, have chosen to specialise in particular areas of benefits, this move towards a more generalist approach is a significant change. Employee benefits consultancies (EBCs) are therefore being drafted in to support many benefits teams.

Tim Johnson, chief executive of benefits and HR consulting at employee benefits consultancy Arthur J Gallagher, says: “We have seen the trend of employers outsourcing their benefits [support] to consultants over the last couple of years. We may not be seeing HR departments laying off compensation and benefits specialists, but they are not replacing them when they move on.”

Benefits teams’ mounting workloads is causing employers to rely more on EBCs, which also explains their diminishing need for in-house specialists.

Jonathan Kitterhing, head of the reward practice at recruitment firm Frazer Jones, says: “Benefits professionals are less strategic than people think because they are relying on EBCs to give them ideas about what their [benefits] package could look like. They are not really creating it from scratch.”

However, not all organisations want to outsource their benefits workload to consultancies, says Janine Sparks, head of reward and performance at Southern Water.

Sparks, who is currently transforming the utility firm’s reward professionals into broader benefits specialists, says there will always be a need for reward professionals who understand reward and how it can best be used to drive business results in an organisation.

However, having staff with a broader knowledge base is better for organisations because they can avoid having to rely on one individual for all the knowledge in one specialist area (see box below).

Keeping up with industry changes is a struggle

But it is not always possible, or indeed realistic, for benefits professionals in smaller teams to keep abreast of all market areas, even if it is not in any great detail.

Neal Blackshire, reward manager at McDonald’s Restaurants, has experienced this struggle. “Years ago, we used to ensure that two of our three team members knew about everything [in the market], so if one of us was off sick, there was always someone who knew what was going on, but in the last two years, that has become more difficult because of our increased workloads,” he says.

All his team members now have specific areas of focus within reward and benefits, while interns are tasked with helping to manage the team’s administrative duties.

Staff need time to develop their skills

However employers approach their benefits team structure, line managers need to allow staff to take time out from their working day to develop their skillsets.

Industry bodies, such as the Chartered Institute of Personnel and Development (CIPD), along with trade publications and employee benefits events, can help benefits professionals to expand their knowledge base .

But industry events are not always within easy reach, which means staff may need to take a whole day out of the office to attend them.

Nevertheless, benefits professionals should try to attend as many events as possible. “Benefits professionals need to attend more events and network, so that they know what other organisations are doing,” says Kitterhing.

Johnson adds: “It’s easy for them to pay lip-service to these things and subscribe to industry magazines and leave them on their desk for a month, and not go to conference sessions when they should be broadening their reading, their engagement and their conference attendance.”

He says HR and benefits professionals also need to take advantage of the training and support offered by their EBCs, many of which offer in-house and out-house training for clients, often for free.

Benefits staff need to ask for help 

Provider support may be less common, but it is often available on request, says Friends Life’s Critchley.

“HR and benefits professionals need to ask for information; they have to be proactive about it,” he says. “I say to any employee who is in a new role that if they don’t know, they should ask. They shouldn’t suffer in silence and think that a lack of knowledge is in some way a sign of weakness. Just because someone is given them a job to do, it doesn’t mean they can do it.”

Arthur J Gallagher’s Johnson agrees. “There is definitely a fear factor [with HR and benefits professionals]. They fear that if they make it obvious they don’t understand something, they’ll be embarrassed and also get charged a lot of money [for support].

“When we talk to HR professionals, we realise they understand HR and the law around HR and the nature of people and talent management, but they don’t generally understand the intricacies of pensions legislation or life assurance or medical changes, and why should they?”

But benefits professionals should not become so intent on expanding their knowledge base that they lose sight of their primary role within the organisation. “They are there, first and foremost, to help their management run their business,” says Johnson. “They are not there to try to be an outsourced benefits expert or a flexible benefits expert or an actuary.”

There are limitations to benefits roles 

Benefits professionals must therefore recognise and understand the evolution of their roles and the time constraints they will face in looking at the number of market areas they can realistically learn about.

But Charles Cotton, performance and reward adviser at the Chartered Institute of Personnel and Development (CIPD), believes the acquisition of ancillary skills, such as the tender management required for benefits provider appointments , should not be neglected in the process.

“Benefits professionals have got to become more savvy and aware around, for example, their legal colleagues, to ensure that contracts are drawn up in such a way that providers deliver what is required to meet the needs of their organisation,” he says.

Career prospects

Frazer Jones’s Kitterhing says benefits professionals with specialist skillsets should also bear in mind that they may reduce their opportunity to demand a higher salary if they become a generalist.

But Friends Life’s Critchely adds: “If this is becoming the expectation among employers [to become a benefits generalist], then as far as career prospects are concerned, it can only be a good thing.”

Benefits professionals therefore need to evaluate their current role and their employer’s plans for team development and then decide which direction they would like their career to take and what is required for that to happen.

Case study: Southern Water creates benefits generalists to support the business

Southern water

Janine Sparks, head of reward and performance at Southern Water, is in the process of transforming the organisation’s reward professionals into broader benefits specialists to better support the needs of the business.

“Having staff with a broad understanding of reward rather than a narrow understanding of a specialist area is, in my view, a win-win [situation],” she says. “It is good for the employee because it gives them more choices in terms of career development; it is good for the organisation because it does not have all the knowledge of one specialist area vested in one person; and it is good for the line manager in terms of teamwork and collaboration.”

Each team member has a development plan, which is based on 70% learning at work, 20% coaching from others and 10% formal training.

“We build it into the work we are doing to develop the reward strategy, so we learn by doing, while buddying up with someone who is already an expert in that element of reward,” says Sparks.

Southern Water also offers internal programmes to develop employees’ personal skills. 

Sparks explains she cherry-picks external training based in London because of the employer’s location in Worthing on the south coast of England. “Employee Benefits Live is really good value to learn from others,” she adds. “We had a session when we shared learnings from the seminars we all attended at Employee Benefits Live in September.”

She believes she is helping her team members to create greater career choices with more flexibility by expanding their skillsets, and would encourage other reward and benefits managers to do the same. “A lot of research has been done about different generations, and learning and career development is what generation Y wants in particular,” she says.

Aspiring reward and benefits professionals should also seek to broaden their knowledge, says Sparks. “Once people get the learning bug, there is normally no stopping them,” she adds.