2009 Benny Awards Judges' Choice
Karen Browne
Director of Benefits
Tractor Supply Company
Brentwood, Tenn.
Eighteen months ago, when Karen Browne accepted the position as benefits manager at Tractor Supply Company in Brentwood, Tenn., she knew that it would be the greatest challenge of her career.
TSC, a national retail organization with 900 stores and 13,000 employees nationwide, had not changed its benefits program in years, despite the fact that the company had nearly doubled in size. Frustrations with the program were high.
"I was brought in for a couple of reasons," Browne says. "The previous benefits manager had left, so they needed someone to fill the position. But they also wanted someone to look at the benefits program strategically. I sat down with Kimberly Vella, the senior VP of HR, who said, 'Given a blank sheet of paper, what would the ideal benefits program look like? How can we improve our team members' experience with the benefits plan?'
Browne was the right person to ask. A 28-year benefits management veteran, she spent 13 years as benefits and compensation manager with Service Merchandise and was delighted to be back in retail after a five-year stint as benefits director for the National Federation of Independent Business. Her many certifications - CCP, GBA and SPHR - demonstrated that she had the knowledge and "big picture" view Tractor Supply needed.
Browne also was impressed with TSC.
"What struck me as a new person coming onboard was the attitude of the CEO, James Wright," she says. "He wants TSC to be a great place to work. He's very interested in how we team members serve each other as well as how we serve the customer."
Vendor overhaul
The benefits program "had a ways to go" in terms of customer service, says Browne. "There was a lot of work to do in terms of the program in general and the vendors in particular. Benefits had not changed in a number of years, and it was time for a fresh look."
TSC had one third-party administrator handling the entire benefits program. "It was soup-to-nuts; they handled medical, dental, life insurance, the FSA, COBRA, everything. But we had outgrown the TPA's capabilities; the service levels were not where we wanted them to be. We were getting a large number of complaints, and it was clear we needed to put everything out for bid."
To help her and her eight-person staff remake the benefits program from the ground up, Browne hired Aon Corporation. "They were invaluable to the process. I'd never tackle something of this scope without using a consultant. Not only were we unbundling everything, we were also rebranding the program."
Health benefits streamlined
The first thing Browne and her team did was to overhaul the company's health benefits.
"We had different provider networks across the country. My goal was to simplify it and have one network. I thought there would be cost savings through discounts and lower administration fees and that claims would be processed faster and more accurately."
TSC issued an RFP and received responses from a number of large, national organizations. Browne selected Blue Cross Blue Shield of Tennessee, which came by other retailers. In addition to a single PPO network, TSC employees now have a 24/7 nurse line, a direct-deposit FSA, an expanded EAP program and, for the first time, dental benefits.
"Our team members are quite frankly thrilled with the service. I'd say people have been more excited about this than any other change we've made," Browne remarks.
The switch also will reduce medical plan costs by approximately $5 million this year.
Along with the health plan improvements, Browne moved quickly to beef up TSC's long-term disability benefit. Before she arrived, hourly employees were not eligible for LTD. She developed a plan that provides all workers with a company-paid "core" benefit and gives hourly workers the option of purchasing additional coverage. At press time, 15% of TSC's hourly team members had taken advantage of the buy-up option.
New 401(k) provider
Selecting a new 401(k) provider was another huge task. Browne chose Fidelity.
"It's a tremendous amount of work to move a 401(k) plan," she says. "You have to educate employees on what is happening and why, especially at a time when the market is being beaten to death. The team members had a lot of concerns and questions. Fidelity and Aon did a great job. No change is without hiccups, but the transition went smoothly and the employees love the new tools that are available to them."
Branding the program
With so many changes, Browne knew that it was important to have a thorough and well-structured communications campaign to explain the new benefit offerings. She created a new brand for HR/benefits communications called "The Tractor Advantage."
To deliver benefits messages in a fresh and powerful way, Browne wanted an in-house magazine. Budget constraints precluded having it professionally done, but she found a free desktop publishing system that allowed her to design and lay out the publication. She actually created two magazines: one specific to open enrollment and the benefits transitions and another for new hires.
For the 2009 open enrollment, Browne rolled out other changes as well:
>> Conference calls were conducted with all field, store, and distribution center managers in advance of open enrollment to review the changes, transition activities and answer questions.
>> All store managers received a set of open enrollment communication pieces in advance of the conference calls in a "Manager Tool Box." The tool box included small items such as a toothbrush to highlight the dental plan and a key chain with the logo of the medical plan vendor.
>> A DVD for open enrollment was produced and sent to all stores and distribution centers. It conveys all of the basic information on the benefits program in 45 minutes.
>> A custom 401(k) brochure was produced that included a description of the new plan provider and recordkeeper, a description of the new funds available, how existing funds would be transferred, information about the blackout period and highlights of what to expect with the new provider.
>> The benefits team leveraged an existing newsletter and intranet resources to communicate with employees about benefits transitions.
This year, the 2010 open enrollment will be conducted online - another major step forward. Browne has other improvements in mind, too.
Looking ahead
"Going forward, we'll be looking at a debit card in conjunction with the FSA. I want to add a vision program, and I'm looking into long-term care support. But the biggest change I want to make is to implement a program directed at improving employee health.
"I think all employers have to go down this road," she continues. "Companies, especially those with large turnover, have been reluctant to do so because [wellness] doesn't yield immediate savings. But we all need to look at this as a long-term investment. If you hire someone, and that person came from a company with a good health program, you're going to benefit. This is a way employers can support one another in keeping health care costs down."
As a result of Browne's hard work and successes, she was promoted to director of benefits in February.
"Taking the job at TSC not only was the biggest challenge of my career, it's also given me one of those years that a benefits manager dreams about. It's like having all of the planets align perfectly so that you can improve customer service, reduce cost, fill design gaps and enhance communications. It's been a win-win all around."
