Survey Shows Online HR Can Cut Costs

Providing employees with Internet access to total-compensation information can significantly reduce human resources costs, but few employers are offering Web-based HR, according to a survey by Watson Wyatt Worldwide, a financial consulting firm based in Washington, D.C.

"Employers have a great opportunity to leverage the Internet and increase the efficiency of their HR processes," says Amy Litten, personalized communication practice leader at Watson Wyatt. However, many employers haven't stepped up to the plate to take full advantage of what the Internet has to offer."

In its survey, Watson Wyatt found that 55% of the 135 surveyed employers offer workers Web access to personalized health-benefits information. Fewer than half, 46%, offer paycheck information online, and 16% provide online information about total compensation.

But the survey also revealed an increase in the number of Web-based HR transactions. According to the survey, 39% of 401(k)-savings-plan transactions now take place on the Web, up from 30% in 2002. Additionally, 24% of health- and welfare-benefit transactions and 16% of life-events transactions, such as marriages, births and retirement, are managed online. These figures are up from 20% and 5%, respectively, in 2002.

Companies that offer Web-based HR are realizing the benefits, according to Gary Kilzer, East Division leader of Watson Wyatt's technology solutions practice.

"The best-practice companies understand that web-based automation can significantly streamline the cost of HR operations," he says. "In addition, our 2005 Human Capital Index confirms that organizations that process a higher percentage of their personal detail changes, benefits, retirement and stock-option/stock-plan transactions online outperform other firms financially by a significant margin."

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