by Gigi Wood

IOWA CITY – The expansion will be a benefit to the community.

Mercer Administration’s Iowa City office, at 2610 Northgate Dr., is the benefits administration division of the larger corporation’s consulting and financial services business. The division handles the outsourcing of human resources (HR) needs, such as health and retirement benefits, of companies ranging from 50 to 10,000 employees. The office is part of a larger corporation with offices in 40 countries that employs 20,000 people, making it the largest company in its industry.

“Mercer focuses on everything that is HR for the client, first and foremost as a consultant, so Mercer has the largest consulting business in this industry,” said Joe Barry, a partner at Mercer who manages the Iowa City office.

The company employs 250 people in Iowa City, with plans to hire another 200 people by 2013. The new positions will be mostly software programmers, analysts and managers. The addition will help Mercer meet the growing demands of businesses as those companies aim to save money by outsourcing human resources tasks and try to navigate continual changes in federal legislation.

“The demand stems from two places: one, the outright demand employers have for health benefit administration services,” he said. “The other demand is at Mercer we have a very broad network of consultants in the marketplace that are advising employers on how to design their benefits, how to get more value out of that design and how to package and communicate those benefits in a more effective way. Those consultants are essentially the channel for these services and are a way for Mercer to grow (its market share).”

Mercer brought in Mr. Barry as the leader to head up its expansion efforts locally, as well as manage employees at Mercer Administration offices in Des Moines, St. Louis and Cleveland. He was poached from one of the company’s competitors, Hewitt Associates, to lead the Iowa City office. He moved to Iowa City from Chicago in April, with his family following in August. Mr. Barry grew up on a century farm in Pisgah, near Council Bluffs, while his wife is from Atlantic.

“It was a way to get back to Iowa and raise our kids in Iowa and be closer to family,” he said. “It was also the opportunity to work with Mercer. Mercer is a marquee operation in this industry.”

The Iowa City office provides online enrollment services, health-care insurance carrier information, claims processing, carrier payment and processing and call center services.

“For many employers, particularly small- to mid-sized employers, their HR department may be fairly limited and their ability to invest in technology and content knowledge in this area may be a low priority to them,” Mr. Barry said. “It helps them lower their cost by allowing them to focus more on administrative tasks in HR. Secondly, it reduces their compliance risks.”

Mercer will not receive any city or state incentives for the extra hires. The city will be closing its 10 year tax increment financing (TIF) agreement with Mercer next year, which provided incentives for its Northgate building, in return for meeting a number of performance requirements, including hiring measures, said Wendy Ford, Iowa City’s economic development coordinator. TIF agreements provide incentives to businesses to build in neighborhoods with low property tax values, with the aim of increasing those values.

The corporation decided to keep and expand its operation in Iowa City, which has been in town for 35 years.

“Mercer made a conscious decision to expand in this marketplace and has a great asset here it can build on,” Mr. Barry said.

The company expects to find its next 200 employees locally and in nearby communities. About 50 people will be hired in the coming year. Many of the higher-level positions may be made by promoting from within, he said. Mr. Barry said he is not concerned about filling the open positions within the local labor pool.

“The labor shed in the Corridor is extremely broad,” he said.

The increase in employees will force Mercer to reconfigure the cubicles in its building and could require a larger facility in the future, he said.

“We’ll have to wait and see,” Mr. Barry said.

Corporate officials are weeding through the newest federal health-care legislation changes. Not every change has been written, so Mercer attorneys and other leaders are working to interpret them as much as possible for clients as new enrollment cycles begin, he said.