Is ESS Right for Your Company?

Before moving HR applications to the web, consider your company's culture and the potential ROI of automation.

By France Lampron Dec 1, 2002

You’ve read that moving HR tasks—everything from benefits to compensation administration—onto an internal intranet can reduce HR’s daily administrative work and increase opportunities for strategic planning and counsel. But in the midst of shrinking budgets and expanding workloads, can your HR department successfully implement employee self-service (ESS)? Should you even try?

Many in HR management think capital equipment costs and employee privacy are the initial considerations in the development of an intranet, yet the first things to consider are the company’s culture and HR’s volume and complexity of tasks.

Getting Started

A quick evaluation of the forms and paperwork in any company’s HR department make the economic benefits of moving tasks to an intranet obvious. A company directory and the employee handbook can be posted on a web site and kept up-to-date without incurring annual printing costs. Forms for address changes, benefits enrollment and emergency contact information are all easily posted, reducing the time HR and employees typically spend processing the data.

“But the biggest reason and perhaps the most difficult to quantify is that by moving HR applications to a company intranet, HR management and generalists can focus on the more strategic aspects of HR,” said Julie Boudreau, HR systems manager at IDG, a publishing company based in Boston that has implemented ESS. “Freed from any number of administrative tasks, the HR team can now function as a business partner to the company’s executive team.” Automation provides the time and data to analyze HR’s role within the organization, she says.

To determine the business drivers for a company HR intranet, consider some of the following questions:

  • Does the HR department employ an HR specialist just to handle administrative work?

  • What strategic reports could HR provide to corporate leadership if the department was freed from data entry and other administrative tasks?

  • Are the HR generalists throughout the company mired in administrative tasks, instead of acting as strategic partners to the business units?

  • What reference documents (employee handbooks, directories, benefits guidelines, training booklets, etc.) could be posted to an intranet to reduce printing costs?

  • Does the company provide a means to collect and verify information from employees and managers to support analytical reports?

  • Could HR reports to executive management be more factual?

Corporate Culture’s Impact

Before beginning an intranet project, it is important to consider your company’s culture. Some organizations embrace change readily. A company with younger employees may wonder why everything isn’t already on the web, while a more established, traditional company may still expect an HR generalist to enter employee data on the new intranet. If the latter is true, HR would just shift the administrative work, instead of streamlining the process.

How computer-literate is the company? Does the company have an internal intranet? If so, HR should ask the webmaster or intranet team leader about employee usage, rollout issues and initial resistance.

Otherwise, assess corporate culture by asking:

  • Does everyone at the company use a PC?

  • How willing have managers been to accept self-service applications, for example, to book their own travel? This will provide insight into how easily a company might adopt a self-service web application.

  • Will managers be expected to use the self-service capabilities, or will HR be expected to act on behalf of a manager?

  • Do managers want to own employee data?

  • Do managers want to feel empowered to make decisions about their employees?

Forming a Project Team

Once you’ve determined that your organization will embrace ESS, the next key step is putting together the right project team. The project should be driven by HR and therefore heavily weighted with managers and generalists from benefits, compensation and HR administration. The team should also include a representative from the company’s information technology (IT) department, a manager, an employee and, of course, the application developer. This team will shape what the intranet will look like and its content, and will decide which applications will save the most time and money and which uses employees are likely to accept.

IT needs to be fully represented, as that department will likely host and maintain the system. In some cases, IT may develop the application, and, in other cases, it will only provide tech support for the application. In either case, IT will support the intranet, ensure that there is adequate performance and security, and solve any network connectivity issues. A solid working relationship between the application developer and the IT department is crucial to the success of the project.

Executive sponsorship is another key element of the team’s success: The project needs high-level champions. The vice president of HR is an obvious choice, in addition to a steering committee of executives from finance and IT. This team can promote the application to other company executives and help clear any roadblocks that arise.

“Executive sponsorship is a critical success factor in determining whether a self-service initiative will be successful,” Boudreau says. “The best-case scenario has the initial idea coming from the executive team; in other cases, a champion or two will be discovered through the development of the applications.”

Which Applications?

Many companies begin an ESS project by moving the easiest-to-transfer applications to an intranet. This allows employees to become accustomed to conducting basic business online, and allows HR to gauge acceptance. While this is not an altogether bad strategy, HR will save more money and have a bigger impact if the intranet plan reviews current HR applications through a screen of volume, complexity and potential return on investment (ROI). Only the tasks that make it through these screens should go to the next step: technical specification and cost analysis.

For example, break down a typical day for both an HR generalist and an HR executive. Determine which of the daily tasks could be taken over by self-service. Look at data entry for address or beneficiary changes. Consider research questions regarding benefits, vacation time or new-hire paperwork. Ask each member of the HR functional team to keep a task list to determine whether the volume of these activities warrants moving them to the web.

Here are some standard HR applications to consider moving to an intranet:

  • Change of address or beneficiary.
  • Training class enrollment.
  • Vacation and sick day tracking.
  • Employee handbook.
  • Employee directory.

Complexity Matters

Next, consider the complexity of the application. Certainly, putting an employee handbook and a company directory on an intranet is simple compared to an application that streamlines the yearly benefits enrollment process. Both may be worth pursuing, but first HR should evaluate them through an ROI screen.

Many HR departments spend a considerable amount of time on projects such as open enrollment for benefits and salary planning. These applications can be moved to a self-service model through careful planning and execution and can have significant internal pay-offs. The project team should look at each of its major projects during a given year to decide whether the HR intranet could reduce administrative costs while providing strategic value to the company.

For example, in the case of benefits administration, HR each year takes on a paperwork-intensive process of collecting and entering reams of employee information, answering employees’ questions and delivering the information to benefits providers. However, if HR puts the enrollment process online with links to the benefits handbook to guide employees’ selections, employees could complete the process and submit any required forms, such as a waiver of coverage, from a home PC, with online help available after hours. The application could have a built-in enrollment reminder that would send an e-mail message to employees. HR would then supply the elections electronically to the benefits provider.

The online system would enable HR to produce an executive report about benefits immediately after the enrollment deadline. This report could include the percentage of employees choosing a health maintenance organization vs. a preferred provider organization and company costs. Such information could help the company during negotiations with benefits providers.

Without the ESS, you have to chase employees down for forms, enter data into the company system, then send forms to the provider, who must also enter them into their system. In that scenario, it would be weeks before a report could be sent to management. The complexity of this application is higher, but the payoff is also greater.

Here are other complex HR applications to consider moving to an intranet:

  • Performance management and compensation planning.
  • Training enrollment and administration.
  • Career development and succession planning.
  • Employee and manager assessment of skills and competencies.
  • Time and attendance information.

Determining ROI

Improved manager productivity is hard to measure, but cost savings can be significant. It’s easy to estimate the benefits of saving money on printing company directories, manuals and benefit package information; cost reductions from cutting an administration position can be obvious. But harder to quantify is ROI of time saved by ridding HR of mundane tasks, which frees them to perform higher-level, more-strategic functions.

But consider activities that would be cost-efficient if the data were available: strategic hiring plans, a turnover review that targets certain managers or departments for training or restructuring, or a review of college recruiting metrics.

Any activity that costs the company HR dollars should be considered for an online application. Intranet technology gives HR professionals the opportunity to restructure their departments and rewrite goals in line with company growth.

Editor’s note: HR Magazine next month will look at how an ESS project team defines the audience for various applications and determines each group’s needs. It will also cover the team’s collaboration with IT, functional managers and employees.

France Lampron is president and founder of Nuvosoft Inc., an HR software company based in Watertown, Mass. She has more than 17 years experience designing and implementing HR systems.

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