HRs Great Enabler

Dec. 21, 2004
Intranets are revolutionizing the way human-resources departments operate.

Todays human-resources-management systems are enabling manufacturers to slash costs, reduce errors, and ratchet up huge gains in productivity. Increasingly, the glue holding the entire HR equation together is Web technology. Of the 200 largest industrial corporations, an estimated 180 are deploying corporate intranets, according to Hambrecht & Quist, a San Francisco investment-banking firm. Whats more, fully half of manufacturers are using their intranets to store and disseminate human-resources information, reports Advanced Manufacturing Research, a Boston research firm. "No department can leverage the power of a corporate intranet more than HR," says Charlie Riley, director of the human-resources center of expertise at SAP America Inc., Wayne, Pa. Adds David Link, a principal at Hunter Group, a Baltimore consulting firm, "You are unlikely to find a department as profoundly affected as HR. Employee self-service, online recruiting, and software that handles peer reviews, applicant tracking, performance management, succession planning, and benefits administration are drastically transforming the way work is done." Two years ago, most HR departments were scrambling to post their open positions on the Internet. For HR groups today, the most action is on corporate intranets, which allow secure Web-based communication within a company. Some HR professionals also are using extranets, which link companies to one another via a secure Internet connection or a virtual private network. Employees at Compaq Computer Corp., Houston, for example, are linking directly to Vanguard Investments Web site so they can manage their own 401(k) accounts. Similarly, workers at Volkswagen of North America in Auburn Hills, Mich., choose health-care providers directly from Aetna Inc.s Web siteno paperwork, lag time, or outdated benefits booklets to sweat over. The Web has been a boon to HR managers, creating opportunities to cut costs while providing a higher level of service than anyone would have thought possible only a few years ago. "About 60% of the work in HR is recordkeeping and administrative in nature, yet it adds only 10% of the value to an enterprise," says Row Henson, vice president of product strategy at PeopleSoft Inc., Pleasanton, Calif. "That sets the table for huge gains--if a company can leverage technology to full advantage." Adds Joe Johnson, assistant vice president of the HR resource strategy and technology practice at Alexander & Alexander, a Lyndhurst, N.J., consulting firm, "The Web has truly been the great enabler for HR." AlliedSignal Inc., Ramsey, N.J., a $14 billion company with 76,000 employees, has automated the formerly unwieldy process of collecting and managing rsums from job candidates. Using SmartSearch software from Advanced Personnel Systems, Oceanside, Calif., the company has assembled a databank of approximately 99,000 rsums--culled from the Internet, e-mail, fax, and conventional mail. When the company needs a person who speaks English and Mandarin Chinese and has a Ph.D. in electrical engineering, a short list of potential applicants flashes on-screen. The system also allows existing employees to apply for open positions. After only six months, AlliedSignal has slashed recruiting costs by $750,000. At Osram-Sylvania Inc., a producer of lighting products headquartered in Danvers, Mass., employees use Domino, the Web-enabled version of Lotus Notes, to view job postings in real time. Staffers can apply electronically, and forms are routed without any human intervention. If a manager wants a job posting to expire on a particular date, he or she simply enters the data into a field, and the event takes place. Not only has that eliminated paper and work, it has reduced hiring time from weeks to days. Better yet, the software is saving over $130,000 a year, and employees are applying for open positions in record numbers. Staffing is only one piece of the puzzle, however. With a kiosk or a PC connected to the companys HR-management system, employees can update their own records and tackle benefits enrollment without ever touching paper and pencilor visiting the HR department. An estimated 80% of all employee questions can be answered through an intranet or interactive-voice-response system without any involvement from HR, according to Watson Wyatt, a consulting firm. In fact, self-service is radically changing the nature of HR management. "Companies talk about empowering employees and this is one way to do it," explains Hunter Groups Link. HR software and systems have become far more sophisticated during the last couple of years. The first self-service applications allowed workers to do little more than update their addresses and phone numbers. And that often left gaping holes in the database, since an employee who moves might have to change health-care providers and find a new bank for direct deposit. In the past, a worker who forgot to fill out all the required forms might not know that a huge foul-up was brewing. Todays sophisticated HR-management software recognizes the nature of the transaction and prompts the employee to supply the necessary data. The system then routes the information to the appropriate manager. "Only a couple of years ago, getting data between programs was a huge challenge," says Gary Durbin, CEO of Seeker Software, an Oakland, Calif., maker of Web-enabled workflow software for automating processes. "Now were seeing event-driven systems that can automatically and transparently update databases and trigger other events. Internet technology has made it all possible." Web-enabled software applications certainly have wrought changes in the way HR is administered at Harris Corp., a $3.6 billion Melbourne, Fla., producer of electronics, semiconductors, and office equipmentthe latter under its Lanier Office Systems division. The companys 28,000 employees worldwide can go online to access payroll information, 401(k) account information, electronic check stubs, and job postings. The PeopleSoft-based system also guides a worker to training and courses befitting the individuals job code and career path. An added bonus is more accurate data. In the past, records were too often riddled with errors as administrative staff in HR keyed an endless stream of data into the computer. "We no longer have paychecks rerouted and sent back to payroll," says Kristy Wetzel, a PeopleSoft implementation manager at Harris. "We dont see workers benefits cut off due to an error, and were not inundated with irate phone calls." Wetzel figures that the intranet has reduced phone calls to the HR department by about 80%. "By having employees take control of their own information, we can have HR staff involved in more valuable activities like retirement planning and keeping benefits programs up to date," she adds. At AlliedSignal, Web-based electronic forms have allowed HR managers to fully automate everything from training enrollment to vacation requests to transfers. An employee simply enters his or her Social Security number and PIN, and the workflow software fills in the rest of the information, including name, address, and phone number. Once the form is released to the Web, its routed to the appropriate person or department. Built-in workflow capabilities then spawn other events, such as a request for a signature or an appropriate action. For example, when a new hire fills out an electronic personnel record, the system automatically initiates a medical exam and might issue credit cards or a notebook computer, if appropriate. "No longer do we have paper getting lost on peoples desks," boasts Nick Messerschmidt, director of HR systems strategies at AlliedSignal. Although PeopleSoft, SAP AG, Oracle Corp., Lawson Software, and other leading HR software developers are rapidly migrating toward Web-enabled applications that eliminate paper and transactions, packaged software is only part of the story. HTML, the language of the Web, allows HR departments to produce their own Web pages and personnel documents. Motorola Inc., Schaumburg, Ill., for instance, posted its employee handbook and directory online. More than 140,000 employees in more than 50 countries can use search tools and hypertext links on their PC or a kiosk to find the information they need in seconds. Getting rid of paper has reduced the workload for HR and has eliminated the frustration of constantly printing and distributing directories that are obsolete as quickly as theyre printed. Meanwhile, other manufacturers are finding new HR-oriented uses for their intranets. Georgia-Pacific Corp., Atlanta, is moving toward electronic pay stubs, electronic stock purchase, and instant online employment verification for loans. Using SAP software and a browser interface, the paper giant can reach its 47,000 employees in 4,000 locations, via kiosk or PC. "We have to be a low-cost producer," says Scott Goodlet, senior manager of employee-management systems. "And, in order to achieve that goal, we must be as efficient as possible. This is one way to cut costs while offering a higher level of service to employees. Once they use the technology, theyre usually hooked." Yet, all the gain doesnt come without some pain. Shifting an entire workforce from paper to pixels requires a good deal of planning as well as a significant culture change. Get it wrong, says Link, and employees will resist using the system or become so confused that HR winds up sinking in a quagmire of questions. He maintains that merely dumping existing processes online doesnt take advantage of the technology. It simply turns paper into electronic forms to be routed to everyone. The result is automated inefficiency. "HR should be thinking, How can a person go to a Web site and complete work without involving anyone else?" Link says. Indeed, when the match is done right, the marriage of HR and the Internet offers an opportunity to reengineer work processes and forge huge gains in productivity and service.

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