Human resource consulting: New dimensions
in risk management

An in-house specialist delivers HR solutions to the
Gibraltar Group's business clients

By Elisabeth Boone, CPCU

In a tough economy coupled with a perennially soft property/casualty market, most independent agents and brokers have long since abandoned the notion of competing on price. In recent years, the focus has shifted to creating and delivering a suite of services to help clients control both their risks and their costs.

Although P-C premiums are in the doldrums, the exact opposite is the case on the employee benefits side, most notably in group health insurance. Employers confront the daunting challenge of delivering a benefits package that doesn't break the bank and at the same time provides an acceptable level of protection at a price that workers can afford.

Yet another dilemma confounds the management of recession-ravaged employers who have been forced to make sometimes drastic cuts in staff just to survive. At many companies, the first to go were human resources personnel, who in tough times were viewed as nonessential to core operations. Their responsibilities likely were assigned to already overworked managers in other areas who lacked the knowledge, experience, and time to understand HR functions, let alone perform them effectively.

As the economy slowly recovers, employers face myriad new concerns, chief among which is the as yet unclear impact of the new health care reform law. Like all major federal legislation, the law puts in place a massive body of new regulations that employers must read, interpret, implement, and track. Companies that retained some or all of their HR personnel have a reasonable hope of addressing this challenge, but those that took the layoff route may be approaching panic mode.

Of course, the new health care reform law isn't the only HR issue on employers' plates; they still have to deal with the usual tsunami of federal and state regulations and compliance requirements, as well as addressing the myriad day-to-day concerns of employees.

HR in the total cost of risk

At The Gibraltar Group in Lubbock, Texas, father and son owners Ralph and Brandt Beal are keenly aware of the HR challenges that face businesses as they begin to emerge from the recession. In line with their commitment to help clients control their total cost of risk, in early 2010 the Beals took the bold step of hiring an experienced human resources professional, Cathy Allen. As vice president, Allen serves as HR manager for the agency and also consults with clients to identify and address their HR issues.

Established in 2005, The Gibraltar Group provides insurance and risk management services to companies in a broad range of industries. Key classes are agribusiness, energy, hospitality, industrial/heavy construction, and manufacturing. The agency's large accounts unit arranges traditional insurance as well as captive structures, large-deductible, loss-sensitive, and self-insurance programs, and pooling for workers compensation or property/casualty insurance. Gibraltar also offers personal lines coverages to its commercial clients. The agency has 17 employees and has producers in Dallas, Austin, and San Angelo. Co-owner Ralph Beal serves as a producer in Paris, Texas.

Before joining Gibraltar, Allen held a series of upper-level positions in human resources and diversity administration at large universities. She wasn't planning to leave an environ­ment where she had achieved impressive results and was highly respected for her knowledge and experience.

A Texas native, Allen began her career in 1986 as a member of the training staff at Stephen F. Austin State University in Nacogdoches, eventually becoming director of human resources for the university's staff of about 1,500 employees.

"After I had held that position for about eight years, I was recruited by Texas Tech University in Lubbock to be their director of HR," Allen says. "I served in that capacity for about 18 months and then was invited to join the university system staff as vice chancellor for community and multicultural affairs. For the next 10 years, I focused on community relations and also was deeply involved in recruitment and retention for minority and underrepresented groups of faculty, staff, and students.

"Texas Tech is the largest employer in the Lubbock area, with more than 10,000 employees statewide," Allen explains. "The student population is about 32,000 and growing. Lubbock is also home to the university's Health Sciences Center, whose teaching hospital is the major provider of health care in the region."

While at Texas Tech, Allen was recruited by Covenant Health System, the second largest employer in Lubbock. In 2008 she joined Covenant as vice president of human resources with responsibility for employee recruitment, the organizational development department, interpreter services, and the system's diversity initiatives.

"After two years at Covenant, I became one of those executive and HR layoffs as the result of the recession," Allen says. "In considering my next steps, I knew that I wanted a position where I could become more involved in employee relations and employee benefits, which had not been part of my responsibilities at Covenant. I had always wanted to earn my PHR (Professional in Human Resources) and SPHR (Senior Professional in Human Resources) certifications but had never taken time to do it, so I pursued those credentials."

A chance meeting and a new career

"During that time I also launched another long-held dream by starting my own HR consulting business," Allen continues. "I made a lot of connections, and I visited with a colleague who said she had a client who wanted to add a staff member who could provide human resources consulting and other capabilities as part of his firm's risk management activities on behalf of its smaller business clients. She did not tell me who this person was or what kind of business he owned, and it turned out to be Brandt Beal, the co-owner of The Gibraltar Group," Allen says.

"In late 2009, Brandt and I met to discuss his vision and the specific areas where he wanted HR training and assistance—not just for clients but also for the agency itself. Gibraltar had grown very quickly, and at that time it did not have a formal HR program or department, so I was charged with that responsibility as well," Allen explains.

"Becoming part of the Gibraltar team has been absolutely great," Allen says enthusiastically. "This position allows me to be involved in every aspect of HR, from a strategic standpoint within our agency and for our clients, and also helping to identify and implement HR risk management solutions for our clients."

Although the agency is based in Lubbock, which is in west Texas, Allen says, "Most of our clients are in north and central Texas. We also have a large volume of business in southeastern Oklahoma and western New Mexico. Overall, our clients have operations in about 28 states. This means I need to be knowledgeable not only on federal legislation but also on the statutes, laws, and regulations of all these states."

As Gibraltar increases its workforce, Allen remarks, it also will be expanding its involvement on the employee benefits side. "Over the next five years, we expect to almost double the size of our current staff of 17 by adding 15 new employees. As we increase our staff, we'll also be building a presence in employee benefits."

Right now, Allen explains, "I provide a substantial amount of consulting on the benefits side with both small and large clients. We serve companies that have anywhere from three to 500 or more employees. Because of the new health care reform legislation, there's a great deal of uncertainty among business owners, and I spend significant time helping our clients understand the issues and prepare for the impact of the new law. I also ensure that training and information resources are readily available both to our own staff and to our clients of all sizes."

In addition to health care reform, Allen remarks, Gibraltar's clients also solicit her advice on OSHA standards and compliance audits, workers compensation, and CSA 2010 (the Federal Motor Carrier Safety Administration's new Comprehensive Safety Analysis program for commercial carriers). Among other workplace issues on which Allen provides consultation and training are sexual harassment, discrimination, the Americans with Disabilities Act, hiring and firing, and employee evaluations.

"Our clients face challenges on so many different fronts, and I thrive on the variety. One day I may be presenting a Webinar on sexual harassment, and the next day I might be delivering on-site training on ladder safety," Allen says.

"There's somewhat of an overlap between the property/casualty risk management area and the HR area," Allen observes. "All of these issues affect our clients' insurance premiums and their total cost of risk, which goes right to the bottom line. I work closely with the client advocate in our office and with our producers, who are the advisors on our accounts. Each of us brings a specific set of skills and experience to the mix, and together we're committed to delivering seamless risk management solutions to protect our clients and their employees."