Inside Sesame Workshop's benefits evolution

Although she didn’t know it at the time, Diana Lee’s career path started with her love for art and architecture.

“I had not planned a career in human resources,” she confides from her New York office on West 63rd Street — also known as “Sesame Street” — where the beloved faces of Big Bird, Oscar the Grouch and the Cookie Monster adorn the walls and elevator doors.

Lee studied art at Oberlin College, where she began thinking about how to earn a living. Eventually, she found a job as a paralegal and discovered she had strong interview skills. She also got along well with people.

“I discovered that I was good at it, and I liked it,” says Lee, the 2019 Employee Benefit News Benny Award Winner for Benefits Professional of the Year. “So it was then that I decided to pursue human resources.”

That decision sparked a career that first landed her in financial services, starting at a firm that is now Chase bank, and ultimately led her to HR roles at American Express, Nickelodeon Entertainment, MTV Networks/Viacom — and finally to her job as the human resources strategist behind Sesame Workshop, the nonprofit she joined four years ago.

As an executive vice president with four decades of expertise in change management, Lee oversees organizational development, cross-cultural talent management and compensation best practices. She has been charged with transforming Sesame Workshop’s employee benefits at a time when the nonprofit best known for its public television programming formed a business relationship with HBO, under the direction of the then-new CEO Jeffrey Dunn, who joined the firm in 2014.

Sesame Workshop’s global reach serves children throughout the world and has branched out beyond “Sesame Street” to far-flung offices in places as varied as South Africa, India, China and Bangladesh.

“Sesame Workshop went through a transformation,” says Tony Marconi, regional vice president of the Corporate Synergies Group, headquartered in Camden, New Jersey, where he works as the broker consultant for Sesame Workshop’s health and welfare plan.

“Everyone knows who they are, of course, but they really went global, and they needed to change their benefits to reflect those changes,” Marconi says. “I thought about the scope and scale of what she’s responsible for and the diverse needs of the organization, and it’s remarkable to see the changes.”

Revamped benefits

From the start, Lee says her focus was to build the right infrastructure and benefits for her employees; to create the right culture to foster professional development, diversity and inclusion; and to build the best HR team to execute all their initiatives to support their broader mission: making children “smarter, stronger and kinder.”

Four years ago, the organization offered one health plan with an in-network and out-of-network component; the nonprofit also faced a very steep premium increase. The decision was made to add a second medical plan that was in-network only, an option that employees eventually embraced. “Through the annual enrollment, we migrated 80% of employees to the new option,” she says.

Working with her benefit adviser, she created an annual employee survey to gather feedback on other medical plan options. She notes that the workforce is predominantly female, with an average age of 40, which means their HR team has to account for the typical medical and financial needs of middle-aged people with family responsibilities. Sesame Workshop also attracts younger employees who don’t use medical services as frequently, along with older employees who are also thinking about retirement planning.

Under Lee’s tenure, Sesame Workshop has rolled out key employee benefits. The employer added three new plan designs, an exclusive provider organization plan and a high deductible health plan with a health savings account, along with parental leave of up to 12 weeks.

Sesame Workshop’s retirement plan includes a 401(k) retirement savings program and after one year of service, all eligible employees are automatically enrolled at 5% of eligible compensation. Sesame Workshop matches 200%, up to a maximum of 5% of eligible compensation. Company and employee deferrals are made on a semi-monthly basis, and the company match vests immediately.

Given their international presence and humanitarian work, Lee expanded travel benefits to reflect those needs. While a majority of Sesame Workshop employees work in the U.S., 10% to 20% of employees volunteer to travel internationally to service the nonprofit’s humanitarian programs and they have a presence in 150 countries, including some conflict areas.

This year employees have traveled to the Middle East to observe the nonprofit’s various programs.

Lee says the organization recognized the need for a more robust international healthcare coverage, so they implemented an international medical plan through Cigna Medical Benefits Abroad, which provides health benefits that follow employees wherever they work. They also have an international SOS security assistance policy to provide evacuation and medical emergency services.

“We’ve been fortunate that we’ve never had an incident where employees needed emergency assistance, but we have services and coverages in place in case they do,” Lee says.

The mission

Lee says her team functions with a shared philosophy of treating employee benefits as a core part of total compensation.

“So being a nonprofit, we can’t necessarily compete on a cash basis with our for-profit competitors when it comes to salaries and with equity and bonus programs. So that’s why we do believe that we need to look at our compensation very holistically,” she says.

Devising a generous benefits program is part of that total value proposition, she says.

“We compete certainly in terms of our generous package with what we can offer in the way of cash compensation, supplemented by our full menu of benefits, paid time off and 401(k). And of course people come to work for us because they’re drawn to our mission.”

Lee’s ability to build the right team and manage change was among the key reasons that she was picked to help Sesame Workshop, according to the CEO, who had worked with Lee at MTV.

“She was a known quantity to me, and I knew that we had a lot of human resource needs in the organization. I knew her to be diligent at the numerous details of HR management, a good balancer of both company and employee interests,” Dunn says. “You need all of these qualities in the leader of your human resources function.”

Dunn says that Lee was willing to make the transition from a for-profit to a not-for-profit organization with smaller financial incentives because she wanted to become part of an organization that was making a difference and driving important change.

“We wanted and needed our organization to become more mission-oriented, diverse and inclusive and accountable,” he says. “She wanted to become a part of the senior leadership team that would make all that happen and, hopefully, as a result, help kids everywhere grow smarter, stronger and kinder.”

Among her top initiatives and accomplishments so far, Dunn said Lee has helped put many new processes and policies in place. “Diana redid the salary and incentive compensation processes to bring them to market and ensure fairness across the organization; she overhauled the performance evaluation process to establish a leadership competency model to evaluate and advise employees on their leadership development; she led the rethink of our benefits packages to make sure that they were meaningful to employees and cost-effective for the organization,” he says.

She also hired a number of new leaders for key divisions and functions, along with leading an organization-wide diversity and inclusion effort.

“She lets her people shine. She is great at letting the people closest to the work meet with me and own their work and ideas,” he says. “More than any other functional leader, her weekly meetings with me as the CEO often include some of her team members.

For example, the upcoming companywide Halloween party is a “huge outpouring of Sesame staff creativity and the Thanksgiving lunch is a huge outpouring of the staff’s culinary talents. These make a difference in the atmosphere of our workplace,” he says.

As Lee mentioned, to make sure senior leadership communicates clearly with staff, her team distributes a comprehensive annual benefits-focused survey to help steer renewal decisions based on how employees prioritize health and wellness programs.

Among her corporate engagement and wellness initiatives, Lee negotiated a wellness budget with Cigna, which the nonprofit utilizes every year. The program includes options for physical, mental and emotional health, including healthy pregnancies, healthy babies, a 24-hour health information line, lifestyle management (weight loss, tobacco cessation), and activities such as bowling, cardio workout Wednesdays, corporate challenges, dodgeball, yoga and a knitting club.

Other wellness programs include employee-driven programs, such as midday meditation and a high intensity workout class. During a recent visit to Sesame Workshop, Lee gave a tour of the company meditation room, where employees can visit to disengage or re-center themselves during the workday. Lee designated the on-site quiet room for prayer, meditation and contemplation.

Because Sesame Workshop is focused on children, Lee also instituted a companywide volunteer day to give employees time off to work in schools. Other ideas for the future include on-site physician visits to facilitate ease of preventive screenings and checkups.

Among Lee’s strengths, Corporate Synergies Group’s Marconi said is her “dignified and thoughtful” leadership style.

“She always asks the next best question,” he says. “She’s still looking to learn and grow, both professionally and for the company. When you’re still looking for growth opportunities and learning after 40 years plus, that’s a true professional.”

For Lee, working with the team that she helped build gives her the greatest satisfaction, along with working with the creative talent behind all the famed Sesame Street characters.

“I’ve always been drawn to creative people and drawn to the visual arts,” she says. “Architecture and art and design remain, you know, very passionate interests of mine until today, but obviously not as a vocation.”

Fittingly, of all the popular muppets and characters, she says she identifies most with one of the lesser-known characters: Abby Cadabby.

“Who is my favorite muppet? Well, you know, I like Abby,” she says of the 4-year-old Muppet character. “What I’m taken by is her childlike wonder. Some of the things that she says just reminds me of what it’s like to be a child, and, of course, the older I get, the harder it is for me to remember what it’s like to feel like a child again. And that’s what Abby does for me. That’s perfect for what I need.”