HR Magazine - August 2000: Ushering Employees into the Digital Age

By Andrea C. Poe Aug 1, 2000

HR Magazine, August 2000Vol. 45, No. 8

Large corporations are grabbing headlines by giving away computers. Do you need to do the same?

Say hello to one of the newest employee benefits: (almost) free home computer systems. Employer-sponsored programs that help workers get their hands on computer technology shouldn’t come as much of a surprise in today’s workplace, with its emphasis on employee retention and high-tech skills. Yet, while there is no dispute that these programs generate good press for employers and make for eye-catching headlines, it’s only reasonable to ask if they also make for good employment practice.

HR professionals who have implemented these programs tout their advantages. But determining if a computer-assistance program is right for your firm will require some company-specific answers.

The real test is to evaluate your own needs, says Maria Schafer, an analyst with The Meta Group, an information technology research and advisory services firm in Stamford, Conn. "Think about what you want to accomplish," she advises. "Do you need to get computer literacy up? Are you looking for a retention tool? Or, would you use it as a way of adjusting compensation because your pay is below market rates?"

If you’ve answered "yes" to any of those questions, the odds are you’ll benefit from adding this perk. But you’ll also want to consider some other factors.

A Good Idea?

Darrell Washington, project manager for employee relations at Ford Motor Co., says the company’s decision to offer computers to employees was driven by three factors, what he terms the three C’s.

"Number one," he says, "is consumer focus. Our consumers have computers, and we want employees to understand our consumers’ views. Two is communication. If all employees around the globe have computers, there will be better communication between them. And three is competitiveness. This program should help improve our workforce’s e-business knowledge."

Similarly, Schafer believes that computer-assistance programs can have a direct effect on company productivity. "There’s an entire segment of the workforce that’s unplugged," she says. Helping employees spend time on their computers at home may help them become more tech savvy—knowledge that then can be used on the job.

That’s the story at Intecs International Inc., a developer of computer-related products and services in Alexandria, Va. Tara Flynn, the company’s director of corporate HR, says that much of the company’s staff works in manufacturing and does not necessarily have computer skills. "We feel it’s beneficial to us to have a more educated, computer-literate workforce," she says.

Also, the effect of these programs on employee loyalty shouldn’t be underestimated. Appreciation of the perk by employees and their families can heighten morale and employee commitment to the company. Phillips Corp., a tool manufacturer in Columbia, Md., has seen this first-hand. "It’s been a very strong retention tool for us," reports Donna Miracle, HR manager.

There’s no mistaking that computer assistance programs generate good PR. "The people who get them act as ambassadors for the company," notes Sunny Rieker-Pierce, president of Rieker-Pierce Consulting in Albuquerque. "When someone asks them about the computer, they tell them that the company helped them get it and the company looks good."

Set Up

If you determine that a computer-assistance program is right for your company, the next step is to design a program that balances your needs with costs, and there are no hard-and-fast rules.

For example, both Ford and American Airlines garnered national attention when they launched their programs earlier this year. Although the two programs share design similarities, there are subtle differences.

Take Ford: Last spring the company began providing home computers to all employees. That’s a pretty ambitious undertaking with 400,000 employees spread around the globe. No wonder the program is expected to take 18 months to complete.

Ford contracted with PeoplePC, a computer equipment provider and distributor based in San Francisco, to help broker deals on high-end Hewlett-Packard computers and printers and Internet access from UUNet. Ford’s program requires that employees contribute $5 per month toward the cost of equipment. After three years, employees will own the computers outright.

American Airlines planned to launch its companywide computer program this summer. For about $12 per month, each of the company’s 100,000 employees can get a Dell home computer system, including Internet access. Spokeswoman Andrea Rader says the program "makes a lot of sense. Because we’re such a large company, we have the buying power and can get the equipment for less."

But even at the reduced rates that large corporations can obtain, such a program can have a steep price tag. For example, American Airlines expects to spend $45 million on this benefit.

Companies that can’t afford to be so generous don’t have to be left out in the cold. With only 50 employees, Phillips Corp. may be too small to fund a computer giveaway, but the company does offer a loan and grant program that helps employees purchase home PCs. "We see it as part of our commitment to continuing education for employees," explains Miracle.

Phillips has earmarked about $20,000 for the program. Employees can draw up to 20 percent of the cost of a home computer system from the fund. The rest of the cost is deducted from employees’ paychecks over 24 months at about $82 a month.

Thus far, the program has been extremely successful. "The response was so overwhelming that we had to hold a lottery," notes Miracle. To date, 72 of the company’s 150 employees are either on a waiting list or have received their computer subsidy.

Computer subsidies are an established practice for Intecs; the company started offering no-interest loans to employees as early as 1988. Under the program, employees can borrow up to $1,000 from the company and pay it back at the rate of $41.66 per paycheck (bi-weekly).

To participate in the program, employees must have at least six months’ tenure. Once employees qualify, they can use the loans to purchase anything related to computers. "They just have to produce a receipt. It can be for a computer or software or a printer; it doesn’t matter," says Flynn.

Lante, an e-business developer and consulting firm in Chicago, was another early participant in computer programs for employees. In 1992, the company established an employee computer fund that sets aside $2,500 for each employee to pay for half the purchase of a home computer. Employees can choose any make or model, with one caveat: Home computers must be different from those used by employees at work. Lante replenishes the fund every 18 months so employees can stay on top of changing technology.

Lante’s program is unusual in that it has no tenure requirement. Chris Goldenstein, a comp analyst with Lante, used the program two months after accepting a job there.

These examples seem to demonstrate that almost any company can get involved in computer assistance programs. Large corporations may be able to negotiate better rates per unit; smaller companies may be able to increase their buying power by contacting distributors to see if their orders can be bundled with other small businesses. If not, smaller firms can offer no-interest loans and matching funds to employees.

"Just about any company should be able to offer something," maintains consultant Rieker-Pierce.

A Helping Technical Hand

Most companies with overseas workers prefer to include them in computer-assistance programs, but this can be tricky. Systems, Internet service providers and electrical lines can vary around the world—and in some locales they’re nonexistent.

Ford is just starting to grapple with that hurdle. "In no way is this going to be simple," acknowledges Washington. However, the company hopes that by having teams in foreign locations communicate with central U.S. teams, it can mitigate any problems.

Offering such assistance can be crucial because not everyone will be on the same page, technologically speaking.

"People are either very tech savvy—or not savvy at all," says Rieker-Pierce. When designing a home PC program, you need to keep both groups in mind. It’s something that many companies overlook, forgetting that much of their staffs may be unfamiliar with software programs.

This is a mistake. Companies of all sizes can afford to make some basic training available, maintains Rieker-Pierce. She notes that a small company in Albuquerque stays open late several evenings each week and brings in a computer instructor to help employees learn how to use the software for their home PCs.

Another inexpensive way to offer training is to contract with your regular temp agencies. "They usually have labs they are willing to open up to you," says Rieker-Pierce. "In many cases they’ll let you use the self-guided training program they train their temps on."

Legal Issues

As with everything, there’s a legal angle to computer assistance programs.

Although most companies make computer assistance available to all full-time employees, James Marks, a partner with the law firm of Harris, Kessler and Goldstein in Chicago says, "There’s no legal impediment to identifying a specific population and limiting eligibility to that group."

But just because it’s legal doesn’t mean it’s wise. A major benefit of these programs is improved morale—something that’s likely to erode if this perk is limited to certain classes of employees.

Marks also stresses the importance of requiring that personal computers are for personal use only. "If you present the program that way, emphasizing that the equipment is for personal use, you’re not going to have a problem," he maintains. As long as you do not have employees working on official business from their home PCs, there’s no liability for any unsavory activities undertaken by employees in their homes.

Marks recommends drawing up clear guidelines about the use of home computers; the guidelines should stress that employees should not use the company name or logo for any of their personal transactions. In addition, companies should not put their names, logos or any other proprietary symbols on the equipment.

John Ryder, SPHR, the Houston-based chair of the Society for Human Resource Management’s Technology Committee and former vice president of HR for a petrochemical company in Houston, adds, "Be sure they use separate Internet and e-mail accounts so they aren’t sending personal correspondence through the company server."

In addition, Marks suggests that companies prohibit employees from logging on to secured company sites and downloading company information because this can be intercepted by hackers.

Some Sticking Points

Home work. "A lot of companies see home computers as a way to extend the workday," says Lorraine Cardwell, president of The HR Group, a consulting firm in Northbrook, Ill. In such cases, employees may be loath to take advantage of a computer assistance program for fear that it will extend their workday.

Cardwell stresses that if computers are really for personal use, you must be explicit in your assurances that this is intended as a perk for employees and their families—not an underhanded way to get more work out of employees.

Union access. Some companies worry that giving employees computers is tantamount to helping a union. That may well be true. Union members have a legal right to communicate to members and potential members, including using the home PCs provided by the company. (For more information on this topic, see the June Legal Trends column.)

Most companies involve union representatives in the development of the plan. Ford partnered with the United Auto Workers early in the planning process. "The union has been a full partner. They’ve been very involved and supportive, and we’ve communicated with the union as the program developed," says Washington.

Companies that fail to partner with unions do so at their own peril. Schafer notes that a large government municipality hit a roadblock when it failed to get approval in advance from union management. "The union was able to inhibit the program from going forward," she says.

Termination. Any computer assistance agreement should have a clear policy on what happens when employees leave the company. HR should require employees to sign promissory notes that bind them to pay back the money owed on a computer upon termination, voluntary or otherwise.

At Phillips Corp., if employees leave before paying back the balance, they may either pay off the balance or continue paying at the same rate each month, plus 12 percent interest. At Lante, the outstanding balance is automatically taken out of the departing employee’s last paycheck.

The Future

While this type of perk appears to be gaining momentum, it may not retain its appeal. Those currently 18 and younger are likely to come to the workforce already tech-prepped. They grew up on computers and need little help in understanding the computer culture. "I think this trend will continue for the next four years, until these people start working their way into the workforce, and then it will change," says Rieker-Pierce.

Lower PC prices will also contribute to the diminishing impact of computer assistance programs. "Already you can get certain computers that are loaded for $1,000, and in the future for even less," Rieker-Pierce notes. As computers become less expensive, these programs will become less enticing to employees, she predicts.

That’s not to say employees will pass up the benefit, but it does mean that companies won’t always get the kind of bang for their buck they’re getting today.

If you’re interested in offering this kind of program, now may be the time to get it off the ground. Later, it may become one of the many routine benefits you offer—not a stand-out selling point.

Andrea C. Poe is a freelance writer based in Easton, Md., who specializes in human resource and management issues.


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