Unquestionably the Internet has profoundly affected human resources - perhaps the biggest potential impact is yet to be fully recognized, as more companies discover the advantages of Web-based Employee Self-Service (ESS) and Manager Self-Service (MSS) applications.
The impact on those already leveraging this technology has been significant with consistent reports of positive results in companies that have implemented these programs. This trend will undoubtedly continue. For those who haven´t yet looked at ESS/MSS, serious considerations should be examined before implementing such self-service applications.
What Exactly is ESS/MSS?
ESS/MSS functions generally tie to a Human Resources Management System (HRMS), a database that houses basic employee information and that may also incorporate data on job applicants, benefits programs, COBRA information, company training programs, workers compensation claims information and payroll.
The addition of a ESS and/or MSS offers the opportunity to more easily make some or all of this data available to managers and employees who can access it anytime and anywhere they can gain access to the Internet.
Employees can, for example, view benefits information at home with family members and more comfortably make choices during open enrollment; a supervisor can submit results from performance reviews to HR without sending an e-mail or printing anything on paper; and in some cases employees who have direct deposit can receive and view pay stubs online. Features and benefits vary from system to system, but most provide the ones just described and offer many others for managers and employees to use.
Some of these variations between systems and the providers who sell them however, are where the important considerations lie for companies choosing to add this technology. First, an employer must consider whether ESS/MSS is right for the company at all.
Will Employees and Supervisors Use the System?
The first consideration is the degree to which supervisors and employees have access to the Internet. You can make an educated guess as to the level of access employees have in their homes, but even if you think a majority of your employees do, the degree to which you offer Internet access while at work probably matters more.
While some employment-related questions and issues might be handled from the comfort of home, most employees still choose to take care of work-related business at work. Aside from benefits and payroll information, much of ESS functionality ties to work issues that don´t involve family and that will be instigated and completed during the course of the workday.
An example might be the administration of a volunteer training class - HR announces the class on the ESS system and interested employees read the course description and enroll online. An employee who didn´t have access to the Internet at work cannot be expected to use his home computer to receive such announcements and enroll, rather the company would have to provide alternate announcements and enrollment options for such employees thereby defeating some of the advantages of the system. To really leverage the system, a large percentage of employees should have Internet access at work.
Equally as important is to consider whether or not your company culture and employment practices will mesh with ESS/MSS. While many of these systems are robust, offering administrative functionality for training management, recruitment and selection, benefits administration and more, those are just empty features if your company doesn´t have much activity in those areas.
If the system will only be used for benefits administration for example, consider how often an employee or supervisor will require logging on. If the answer is "seldom", then ask yourself if they´ll even remember the system; how to log on when there is a need; will they just do what they´ve always done and come to your office for help?
If the system will be nothing more than personnel and benefits files online, then it´s not worth whatever money you pay for it. You have to do more with it for employees, managers and supervisors to want to use it. They need to have a weekly if not daily need to access the system, which is why some providers now offer portal systems and encourage employees to make their ESS site their home page on the Internet.
Finally, consider how well the system will be administered. As with any computer system, garbage in, garbage out, and leaving data fields blank is almost as bad as inputting incorrect information. If employees and managers log onto the system only to find it lacking in information or that it has incorrect information, they will abandon the system in favor of whatever other methods they find effective and they´ll be reluctant to trust the system again.
Some service providers, generally called HR outsourcers or Administrative Service Organizations (ASO) will offer data management as part of the service, but they will only be as good as the data you provide to them on a consistent basis. That assumes your administrative service provider will do a good job if you get the information to them timely. Whether you outsource data management or do it yourself, a serious reality check on your company´s ability to maintain complete and accurate data is warranted.
Integrated vs. Non-Integrated Systems
If you´ve decided that ESS/MSS is right for your company, you´ll be amazed when you see how many systems are on the market today. As mentioned in the introductory paragraph, these systems are linked with an HRMS so just as importantly you must carefully consider the selection of that system. Without going into too much detail on HRMS functionality separate from ESS/MSS, it is worth evaluating the difference between systems that integrate payroll with their HRMS and those that do not.
Systems such as those offered by PeopleSoft, Ultimate Software Group, Best, Genesys and Infinium offer systems that fully integrate payroll with the HRMS, which means that all related modules operate from the same data tables. If you change an employee´s address in the payroll module then it is automatically updated in the benefits and employee history modules as well, whereas in a non-integrated system those other modules would not be updated with the new address until another step was performed to interface the systems.
Despite the obvious advantage of an integrated system, many companies choose against this option because they may want an HRMS offered by Company A but they want to keep their payroll service and/or use a payroll system by Company B. In these cases, companies are leveraging what they consider to be two good systems and are choosing to live with the added step, and given solid discipline in interfacing procedures this need not be much of a burden.
But if you do decide to go with the non-integrated approach, research the compatibility of the two systems in advance and test the system interface thoroughly before going "live".
Self-Host or ASP?
One other HRMS factor worth mentioning in conjunction with your decision to buy ESS/MSS is the issue of whether or not to host your own system. The purchase of an HRMS will typically require the addition at least one full-time equivalent (FTE) in the IT department. This, of course, varies according to the size of your company and the bandwidth of your IT team, but suffice it to say that hosting the software adds significantly to the IT workload.
The emergence of Application Service Providers (ASP) has been a welcomed option by many companies who want the additional software but not the added IT burden. ASPs host software on their servers and deliver it to you via the Internet. In some cases, the ASP may even own the license to the software and simply lease access to you, the advantage of which has much to do with cost and your comfort level with the viability of the service provider.
If you choose to use an ASP, due diligence should include a visit to their data facility where you or your IT staffers can inquire about security and downtime issues firsthand. You should ask specifically about important factors such as encryption, load balancing, firewall protection, backup for power outages, schedule for data backups and whether they are off site, and that´s just the beginning.
Ample information is available regarding ASPs on the Internet. One recommended site is the Business Process Outsourcing (BPO) site, which offers research articles on ASP utilization and provides listings of service providers.
Cost & ROI
Costs for ESS/MSS applications have declined proportionately with the increase in the number of systems on the market and with the decline in our economy. Some very good deals can be found right now.
As with most business expenses, it is appropriate to consider the company´s return-on-investment (ROI) for implementing ESS/MSS. At a minimum, ESS/MSS should provide an immediate savings in administration, mostly through the elimination of paperwork processing. But the savings should go beyond that.
The Cedar Group, formerly the Hunter Group, conducts annual surveys on ROI for self-service systems and has found encouraging results year after year. In the most recent survey, employers reported an average reduction in the Cost Per Employee Served (CPES) of 15 - 20%. Considering that the typical CPES is $1,000, this savings is significant. Factoring in the cost of the system itself, these employers reported an average ROI of 12 months.
The savings comes in part from the elimination or reduction of paperwork, but other cost advantages are realized through efficiencies gained by information access, rapid transactions, and enhanced employee satisfaction. In fact, those should be the advantages you expect more than simply ridding your company of paperwork.
Conclusion
This wonderful technological can be a tool we´ve needed to make HR more strategic and less administrative inside our companies. Used well and under the right circumstances, employees and management both win. If now is not the right time, then you would be wise to reconsider ESS/MSS as your company grows and evolves because when the circumstances are right for you, the economic advantages will be waiting.
