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Firm Takes Human Resources Online
From Insurance to Personnel, Benetrac's Client List is Growing
By Mike Allen
San Diego Business Journal Staff
2/14/2005
Jerry Hawthorne's business is one that would warm the cockles of any environmentalist.
"What we want to do is get rid of using paper. We want to quit cutting down trees," said Hawthorne, the chief executive officer of Hawthorne Benefit Technologies, also called Benetrac.
Based in Old Town, the company provides online human resources benefits data and enrollment services to medium and large-sized firms. Benetrac's data management service is sold through partnerships with about 250 insurance brokers.
As companies look for ways to boost bottom lines and reduce labor costs, services such as Benetrac are becoming more popular.
"We've increased our accounts by 100 percent last year and did about the same thing from 2003 to 2004," Hawthorne said.
The time saved by using Benetrac is most evident when human resources departments are most stressed - at the beginning and end of a year, when there are numerous changes to employee benefit programs.
Jennifer Spangler, the manager of benefits administration outsourcing for the Arlen Group, said using Benetrac has cut enrollment times for clients by an average of 30 minutes to a few minutes.
"Their forms are so user-friendly, it makes it easy to navigate the system, and most people have no complaints," Spangler said. Arlen, based in San Francisco, provides human resources services such as payroll and benefits administration to a dozen companies that average about 200 employees.
To ensure a smooth transition from a paper-oriented enrollment process to one handled electronically, Arlen set up a call center to take care of any questions and possible glitches. The calls were few and far between, Spangler said.
It helps that most of Arlen's clients are high-tech firms and employees are computer savvy, but even those companies that aren't in technology experienced few problems, she said.
The information provided by employees is first sent to the client's human resources managers for review, and assuming it's complete, is sent on to the insurance companies. Employees are given access to their accounts through passwords, and can make any changes on their own.
Benetrac is gaining new business through partnerships it has with such major insurance carriers as Blue Shield, Kaiser Permanente and Liberty Mutual. Blue Shield is so convinced of Benetrac's reliability and cost savings, it offers the service free of charge to companies with more than 100 employees, Hawthorne said.
For many smaller firms, that cost averages about $4 per employee per month, but the savings in time and additional human resources personnel can be as high as 80 percent of the entire department's budget, Hawthorne said.
"Most of our clients said they've received at least 100 percent return on their investment in Benetrac in the first year through time savings and accuracy," he said.
Knowing that anything involving the Internet and the loss of personnel information is critical to companies, Hawthorne hired a consulting firm to conduct an extensive review and testing of his service's internal controls. The consultants did their utmost to break into the system and steal data, but they couldn't do it, he said.
"We wanted to prove to our clients and brokers that we understood the significance of having a secure system and one that passed an outsider's test," he said. Picking up new clients all the time, Hawthorne can crow a little as he looks back at where Benetrac was before and where it is today.
"When I got into this business in 1999, we had 10 competitors, and today, there's only one left," he said. "Their business models were flawed and poorly managed. What we've done here is about hard work, stability and honesty."
This article originally appeared in the February 14-20, 2005 issue of the San Diego Business Journal.
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