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Dave Peterson Assistant Vice President,
Total Rewards, HRIS and Equity Hologic, Inc.
San Francisco: March 18, 2014
Describe the “Perfect Storm” which led NetScout to refine its employee benefits strategy
Explain the process for making changes to our benefits program offerings and identifying new programs for attracting, retaining and motivating talent
Inform you about things you can start doing now…
Let you ask questions!!!!
Have fun!
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Public Company: 1,200 employees; 700 in the US
Operations in 20+ countries (Americas, EMEA, APAC)
Headquarters: Westford, Massachusetts ◦ 250 in Westford; 130+ in India; 90 in San Jose, CA; dozens of customer facing
employees working from home offices
Revenue: $350M
Turnover: 12% - 13%
Small HR Staff
One primary global H&W broker / consultant
Fiscally conservative
Paternalistic w/benefits
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NetScout Systems, Inc. Company Profile
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NetScout Global Benefits Strategy
Employee Needs
Market Trends
Financial Affordability
Promote Consumerism
Annual review
Balancing Act
Provide
coverage
which is
equitable
across all
geographies
– Rising Employee
– Heath Care Premiums
– Rising NetScout
– Health Care Costs
– High Claims Experience
– Rich PPO/HMO
– Plan Design
– Rx Inflation
– Internal: Revenue Down, Cost Cutting
– High Company Benefits
Contributions
– External: Recession
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Step #1: Update cost structure of plan
Step #2: Identify existing or research NEW innovative low-cost programs to soften large cost increases in health coverage; programs targeted to different generational groups
Step #3: Communication; refresh awareness of other, existing low cost plans
Step #4: Assess and reassess………
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Solving our Perfect Storm: We Had to do All of the Following Activities
• Update cost structure of plan (employer vs. employee contributions)
• RFP (multiple plans)
• Identify NEW, innovative low-cost programs to soften large cost increases in health coverage
• Communication;
• Education
• Awareness
• Assess and reassess………
Programs targeted to different generational groups
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Step 1 Step 2 Step 3 Step 4
Solving our Perfect Storm: We Had to do All of the Following Activities
RFP of our popular medical plan ◦ Rejected by 3 major carriers due to poor claims experience
◦ Marketing threat caused incumbent medical carrier to reduce renewal
Re-branding / marketing of medical plans
Revise our medical plan contribution strategy ◦ Premier: Best in class PPO; 80% enrolled; increased medical premiums by 40%
◦ Core: Comprehensive PPO coverage; no rate increase
◦ Basic: Roll-out NEW High-Deductible PPO; priced less that Premier/Core
◦ Long-term goal: Migration away from Premium Plan
Same approach to Dental coverage
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Step #1: Program Cost Structure Changes
Negotiated the elimination of 401k Administration fees
◦ Saved the company over $25,000
Successful RFP of Life/Disability Insurances
◦ Saved the company $70,000+ by switching carriers
◦ No changes to cost/coverage for employees
◦ Transparent to employees
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Step #1: Cost Structure Changes (Con’t)
The Squeaky Wheel
Gets The Grease!!!
We saved nearly
$100K!!
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Identification of different generational groups
Research “What Makes Each Group Tick”…
Exploration of existing programs that can be further promoted to employees
Research new, creative programs for employees
Goal: soften the blow of significant cost increases in employee contributions to health benefits; continue to promote employee retention, motivation, etc…..
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Step #2: Identification of Existing or New, Low Cost or No Cost Benefit Plans
Plan Element Baby Boomers Generation X Generation Y “Millennials”
Approximate Age 46-64 30-45 Up to 29
NetScout Population 36% 56% 8%
Technology is…. The microwave oven; ATM What you can hold in your
hand (Cell, PDA) Internet at your finger tips;
Social Networking
Rewards/Benefits Base Pay Bonus Base, and Bonus and
Flexible Work Arrangements
Motivated by: Being valued, needed;
money; strong company leadership
Career Advancement; Leadership Opportunities
Career Advancement; Working with bright people / mentors
What is Work? Work hard to be valued; work
is a career – then retire Wants company to value their
contributions Wants to value their own
contributions
Long Term Care: LTC with John Hancock; 8% initial enrollment
Financial Planning: Ongoing education offerings (from our 401k and EAP providers) for generation appropriate information; additional webinars from 401k advisor
Legal Plan: Expanded promotion to (hopefully) ensure employees have necessary protection (wills, living wills, etc.)
NEW Disability Coverage: Supplemental STD and LTD for high earners
Critical Illness: Launched voluntary Critical Illness
Still Evaluating: Care.com (adult day care)
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Baby Boomers Benefits/Rewards Programs
Flex Schedules: be more accommodating
Financial Planning: HR sponsorship of programs such as (1) saving creatively for retirement; (2) saving for college expense, etc.
Training: Expand web-based development / skills training
NEW: College Coach (www.getintocollege.com); workshops, counseling for aiding in the overall college selection, application, and payment process
Retirement: Roth/401K program; financial planning webinars from 401k plan advisor
Evaluating: Child day care programs (e.g., Care.com); would require add to company expense ($6k - $10K)
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Generation X Benefits/Rewards Programs
Patent Program: For Junior Engineers; established multiple, $1K awards for achievement, etc.
Financial Planning Education: HR sponsorship of education offerings such as (1) saving money for buying a first house, (2) how to roll over $$ to the company sponsored 401k plan, (3) how to create a budget, (4) credit card/debt management, etc.
Social Networking: HR worked with IT on an expansion of employee internet for social networking-type module within system
Education Assistance: Refreshed marketing of the education assistance program; invited local schools to benefits fairs, etc.
NEW Medical Plan: Low cost, high deductible medical plan option launched
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Generation Y Benefits/Rewards Programs
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Its ok to LOL………………
Health/Wellness: Reminders of discounts / reimbursement (Weight Watchers, Fitness Center, etc.)
Financial Education: Semi-annual webinar series hosted by 401k plan advisor
Walking Program: Offered annually; team-based; web-based tracking system; GPS for winning team
Free Drinks: All sites have free beverages (non alcoholic); free ice-cream in summer months
Total Reward Statements: US employees each year
Café Specials: offer “Healthy Wednesday” menu each week in Home Office
Employee Recognition: host annual luncheon to all managers about the program
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Existing Cross-Generational Benefits Many of these are No Cost/Low Cost to the Company!!
Health Risk Assessments: Launched annually since 2010
Casual Fridays: Wear that favorite Hawaiian shirt each Friday
Tailgate Fridays: Monthly tail gait Fridays during Football season
Matching Donations: NEW program; Company will match up to $50 per person per year
Dry Cleaning on Wheels: Drop off/pick up dry cleaning services
Banking Services: Discounted banking services
ESPP: 45% US enrollment
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MORE Existing Cross-Generational Benefits Many of these are No Cost/Low Cost to the Company!!
Yoga Classes: taught by an employee on-site
Telecommute: becoming more flexible to this
Pizza Pictionary Fridays: quarterly; subsidized
Work Location: discussions underway about offering baby boomers to work from San Jose, CA (vs. Westford, MA) in the winter months
ESPP: Global offering under consideration
401k auto enrollment: mixed opinion on this
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Additional Benefits Under Consideration
Equity Incentive Plans: Revamped annually since 2011; eligibility and participation reduced
401k Vesting: Gave it some consideration; no changes at this time
Pets at work…………(we love them, but……)
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Reward Programs We are Not Considering Changing
One size does not fit all
Different generations have different preferences and comfort levels with technology
◦ Younger workers (preference for on-line information)
◦ Older workforce (rely more heavily on printed material)
Implement on-site, face to face meetings
Outsource elements if possible!
Exploration of Social Media…………
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Step #3: Benefits Communication
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Benefits Communication Program Elements
Method Description
Benefits Statements Created annually; summarizes annual summary of selections and costs
EAP Information Sessions
Ongoing promotion of EAP offerings
Benefits Guide Colorful guide of all US benefits; posted on Intranet (our broker created for us!)
CEO Open Enrollment Newsletter
Drafted by broker, modified by HR, signed by CEO; sent to all US employees via USPS
Open Enrollment Info Sessions
Face to face meetings describing the program changes, highlights, process, key dates
401k Webinars Offered each spring and fall; presented by 401k plan advisor; no cost to the company
Benefits Fairs Offered at two largest sites each fall during open enrollment
All Types/Other Posters, postcards, emails; be creative / have fun with it
Have you considered adding an HR Communications Manager to your team?
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Generation Differences: Most benefits programs appeal to most employees; however differentiation is important!
Existing Programs: We (and likely you too!) have many great, low cost or no cost programs which are included in your existing programs
New Programs: You may have modest enrollment in the newer, voluntary programs….but its refreshing to offer NEW programs
Leverage Technology: For education, administration, and overall management
Diverse Communications: One size does not fit all, you have to do it all – but YOU do not have to do it all!!
Negotiate with Vendors: Squeaky wheel gets the grease
Ask for Help: Don’t be afraid to ask a professional
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What Did We Learn?
2013 Health Renewal (1.0%)
2014 Health Renewal (7.0%)
Turnover is flat……slightly less pressure on retention
20% of the US population now in a CDHP
Health Care Reform: work with broker/consultant on process
Promotions: stress, fitness, financial
Making progress on this internationally…
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