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By Samuel Greengard
Jul. 1, 1998
America is fast becoming a self-service society. These days self-serve gas pumps far outnumber full-serve pumps. Our banks encourage us to use ATM machines for 24-hour service. And the “free refills” slogan brought us self-serve soda fountains at fast-food restaurants. A little more slowly, a little more quietly, Corporate America is making the same shift.
Employee self-service. The mere mention of the words elicits joy in the hearts of human resources professionals everywhere. And it’s not difficult to understand why. Buried under an avalanche of forms and phone calls, HR historically has been relegated to a messy corner of administrative hell. Processing an endless stream of requests, updates and clarifications has allowed little time to become more efficient, let alone strategic. Thus, the idea of introducing technology that can automate processes to let employees handle functions themselves sounds like a passport to The Promised Land.
Yet, buried beneath all the glowing reports about how self-service can transform an organization lies an important and all too often ignored fact: Achieving outstanding results requires a significant change in cultural mindset. It’s not good enough to roll out the latest and greatest form of employee self-service (ESS) and leave it to employees to adopt the technology with wide-eyed enthusiasm. And it’s certainly not good enough to introduce the concept and smugly think that advantages for human resources translate into gains for the entire organization.
“No matter how important an employee self-service project is and how great a concept human resources believes it is, the cultural and sociological impacts can’t be ignored,” states Susan Obijiski, an analyst for Gartner Group, a consulting firm based in Stamford, Connecticut. She says, “If you get off to a disastrous start, the battle to implement the technology becomes far more difficult.” James Hatch, a partner in the Workplace Transformation Practice at Arthur Andersen LLP in New York City, adds: “The thing that many organizations don’t understand is that self-service affects behavior and the way employees think about the company.”
That makes sense, of course. Yet, these days, organizations are busy introducing ESS without understanding the full impact on the workplace. How do employees typically respond to these systems? How do they feel about having fewer interactions with HR? Is accuracy a concern? And, amid all the rhetoric about human resources becoming more strategic, what’s really happening?
At a time when organizations are desperately struggling to define and redefine themselves, self-service technology offers incredible opportunities… as well as remarkable risks. “It’s an absolute change in mindset for everyone involved,” says Jerry McLaughlin, CEO of Enwisen, a Novato, California company that sells employee information systems software used for ESS.
ESS brings rewards.
According to the Bethesda, Maryland-based consulting firm Watson-Wyatt, about 60 percent of all organizations are now using some form of Web-based employee self-service technology. Approximately 35 percent cited improved service to employees and better communication as a primary goal. The Gartner Group estimates that 40 percent of traditional HR activities will be handled by ESS by 2000.
It’s no secret that most companies introduce self-service technology for one primary reason: It can save huge sums of money by eliminating unwieldy processes that devour time and resources. Of course, other benefits can result from employees taking control of their own transactions, including helping them take greater responsibility and ownership of their careers. But, let’s face it, that’s hardly a justification for spending millions of dollars on sophisticated hardware and software.
Although the return on investment varies greatly from one company to another—partly as a result of how each organization reengineers work processes—various studies have shown that ESS can result in a savings of 20 percent to 80 percent per transaction. Many systems can pay for themselves in a year or two, and subsequently produce multi-million dollar gains. ESS can also free HR from the administrative treadmill while providing a more convenient way for workers to make changes to their own data.
Eliminating manual data entry and a steady stream of visitors to the HR department has removed an ongoing need for temporary workers in human resources, and subsequently helped the department spend more time coaching and counseling employees on career matters. “There was a lot of concern when we introduced the first self-service program in 1993,” admits Kenneth S. Wagner, director of worldwide information technology at Bristol Myers Squibb of Princeton, New Jersey. “But today it’s a non-event. Nobody is asking for the ‘nice’ people who help them fill out the forms.”
The end result? An HR department that actually is becoming more strategic. Using technology to reengineer processes, human resources recently has introduced several notable changes. One of them is the elimination of paper-based annual appraisals. Instead of managers filling out a form and handing the paperwork to HR for approval, they now engage in a meeting with each employee and discuss mutual goals, objectives and challenges. “It’s opening new channels of communication,” states Wagner.
ESS also brings risks.
When it’s done right, employee self-service can achieve remarkable results. But it doesn’t always work out that way. As employees begin to conduct business transactions through computers, “they can easily lose their connection and identification with the organization,” says Hatch. Instead of speaking to a live representative in a call center or an office, they’re left to fill out forms on their PC. Ultimately, by taking HR out of the equation, the formal and informal channel of communication can be lost if there are no attempts to remedy the situation with new forms of communication. “The relationship between an employer and employee is the foundation for a company’s success. If workers begin to lose the link, the effects can ripple throughout the organization,” states McLaughlin.
In fact, the mere introduction of cost-saving technology such as employee self-service can introduce problems—if an organization hasn’t devoted time and effort to mapping out the process and understanding the changes that will take place. As corporations embraced a business model that engenders less loyalty between employer and employee, workers are finding that the “fulfillment and sense of belonging they get out of work is more important than ever before,” says McLaughlin. Thus, the question can ultimately become: “Does any of the money saved go toward employees or improving communication between managers and workers?”
But that’s not the only potential land mine. When the Gartner Group’s Obijiski consulted for one large company on an ESS implementation, she found a curious disconnect between employee perceptions and reality. The company had successfully introduced a module that allowed employees to update their own records. Surveys indicated the workers genuinely liked the system and preferred it to traditional methods. After the company introduced several other self-service capabilities, however, surveys turned decidedly negative. “Employees, particularly in human resources, were afraid they weren’t going to have jobs in a few years. The fear was born out of the company using ESS to downsize HR staff. The people who left became extremely disgruntled and communicated their displeasure to the rest of the workers,” she explains.
Be sure your system works well at rollout.
If you take a proactive approach, you can guard against these negative first impressions. “In today’s business environment there’s an overwhelming need to do more with less. But there’s also an awareness that employee self-service has to serve everyone’s interests,” says Eric Gelman, director of marketing at PDS, a provider of HRMS and self-service solutions. To be sure, it’s a fine line between success and failure. Although a human resources department might recognize the value of ESS for the organization, that enthusiasm doesn’t necessarily translate into gains for workers.
That concept serves as the foundation for ESS at a growing number of companies. In fact, many organizations are learning that employees actually prefer a well designed employee self-service program to pen and paper. At Bristol Myers Squibb, 24,000 American employees can update records, conduct flex enrollment, update emergency information and more through an intranet or over the phone. Checking on 401(k) balances also is a snap. Workers can access account information 24 hours a day, 7 days a week by connecting directly with Fidelity Investments of Boston, Massachusetts.
The company spent the time and resources to build an easy-to-use system—with Web-based ESS software from Austin-Hayne of San Mateo, California and IVR software from Santa Clara, California-based Edify—and workers are reaping the benefits. Processes, such as generating 401(k) statements, that used to take days, now take place in seconds. “People don’t miss the interaction with human resources because they are getting better service,” states Wagner.
Of course this only works when the service is good. A poorly designed interactive voice response (IVR) or Web interface can dismantle a program as quickly as workers click on tasks and become frustrated by a poorly designed user interface or lack of functionality. Unclear menus or a system that requires employees to resubmit the same information every time they update a record or submit a report is a surefire way to fail. Even worse is a system that allows a worker to choose, say, a health plan, generates a confirmation but later rejects a claim because the person selected an invalid option while signing up.
In fact, system integrity is a core issue. Although inaccurate data is rarely a problem—when employees manage their own records electronically fewer errors actually occur—it’s the way the software handles information that can make or break ESS. When employees enter data and the system doesn’t process it properly, word quickly gets around. “People lose confidence and find ways to avoid using it,” says McLaughlin. Another sticking point is when a worker spends several minutes filling out an electronic form, only to have the system reject the transaction or force the person to start all over again. Likewise, a system that can’t instantly update a change in withholding or can’t display the latest pay stub information is likely to sink under the collective weight of employee disapproval.
“The time savings for a well implemented self-service project is immeasurable,” says Tom Meadows, a vice-president at Ceridian Source Empowerment of Cuyahoga Falls, Ohio, a provider of self-service and IVR solutions. Yet, experts agree, the technology requires a well-defined strategy. In most instances, it’s best to first offer a “killer app” that can convince workers that self-service offers them notable benefits. Once employees are convinced the system works and it can save them time and effort, it’s possible to expand the offerings. “Most companies that succeed start simple and continually look for ways to draw employees in while leveraging their assets and resources,” states Obijiski.
That was certainly the case at Richmond, Virginia-based LandAmerica Financial Group, a company that processes title insurance. In the fall of 1997, the company rolled out an online address change form using Ceridian Source Empowerment’s software. Since then, the 4,000-employee company has added modules for benefits and enrollment, taxes, company policy information and internal job postings. Last fall, when the company used the benefits module to introduce a paperless enrollment environment for workers at its headquarters, the entire process took place without a hitch. “Employees now view HR as a progressive department rather than paper pushers,” boasts Carol Gentry, HR information systems manager.
Take employee self-service to a higher level.
Not surprisingly, the success of an employee self-service system often hinges on several other key issues. Obijiski believes that no matter how dazzling the technology is, it’s necessary to overcome several common obstacles. Information technology (IT) professionals often see the project as a winning proposition, but do not take into account the cultural factors surrounding the change. As a result, they’re likely to design the site without human factors in mind. “The same work processes that existed with paper become part of a Web-enabled application. Instead of an employee viewing only the two or three relevant fields, they’re bombarded with 25 fields and they wind up overwhelmed and confused.”
Resistance to change is often the biggest headache of all. In a typical implementation, about 20 percent of employees are likely to dig their heels in and battle the new way of doing things. An additional 20 percent are likely to resent the change but use the system with a bit of cajoling, says Obijiski.
And the human resources department is hardly exempt. After all, the project can mean getting rid of file drawers and forms that have been part of the department’s collective psyche for decades. It means rethinking work and retraining individuals to handle entirely different tasks. And then, if the project succeeds, it could eliminate jobs.
But the greatest resistance can occasionally come from the most unlikely source: management itself. It’s particularly a concern at large corporations with entrenched ways of doing business. Although it would seem logical that senior managers would embrace employee self-service, it thoroughly muddles the idea of who’s responsible for record keeping and who’s to blame, says Obijiski. “There’s nobody to point a finger at and say ‘fix it’ if employees aren’t using the system right or if records are a mess. ESS crosses departmental boundaries and gets to the root of the company’s culture.” she states.
Training can help you sell the change.
Alexia Martin, a management consultant for The Hunter Group, believes education and training are paramount to success. Employees have to understand what’s coming, why it’s coming and what’s in it for them, she says. If a worker realizes how much easier it is to enroll in training, request vacation time or check on a 401(k) balance through the company’s intranet, he or she is likely to embrace the technology and use it. And once the person’s sold on the capabilities of ESS, he or she is likely to approach future changes with a positive attitude.
Obijiski insists an ESS rollout shouldn’t be rushed. Not only can it take months—sometimes a year or more to plan and implement—it’s essential to beta test the program, measure feedback and thoroughly understand the cultural ramifications at all levels of the organization. It’s also crucial to develop an overall strategy and timetable for implementing new technologies—and, as much as possible, understand the underlying financial issues.
Ultimately, employee self-service requires a major behavioral change. “You can never go backward once you’ve introduced employee self-service. It will have a profound impact on the organization,” McLaughlin observes. Yet, whether that impact is positive or negative has as much to do with how human resources manages the process as it does with the hardware and software that’s deployed. Employee self-service is more than a technology, it’s a state of mind.
Workforce, July 1998, Vol. 77, No. 7, pp. 60-64.
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