Online HR services on the rise

Companies continue to invest in online HR, citing greater efficiency, accuracy, speed and lower costs

Employees can expect online internal services and communication to increase in 2002, according to a survey by HR consulting firm Towers Perrin.

Despite the slower economy, companies will continue to invest in online HR services, in order to take advantage of the efficiency, accuracy, speed and lower costs of online HR functions.

Fully 91 per cent of the more than 200 survey respondents use the Web to communicate with employees, and just under half (48 per cent) give employees the ability to manage certain services on their own, such as enrolling in benefit plans or training courses.

The survey suggests that these numbers will continue to rise since almost all respondents plan to maintain or increase their investment in Web HR technology, with fewer than 3 per cent planning cutbacks, even in these tougher economic times.

"The Web represents a great opportunity for companies to introduce HR solutions that directly support employees' and managers' needs as well as the objectives of the business," said Minaz Lalani, a consultant with Towers Perrin in Calgary.

"The next step in realizing the potential of Web-based HR will be for companies to think beyond the basics, to helping employees get real value out of HR intranets. We are already seeing some companies enable their employees to use their corporate Web for transactional activities, like modeling their retirement finances, or planning their careers and understanding the relevant training needs."

The Web's rapid growth in this area stems from companies' strong belief in its potential to increase the efficiency and effectiveness of HR service delivery. For instance, 96 per cent of the survey respondents agree that Web self-service can improve efficiency in both the HR function and the organization overall, as well as improve the quality and timeliness of services to employees.

And 80 per cent agree the Web has the potential to lower their company's HR operating costs. However, the percentage of respondents saying they are currently achieving these results is far lower, indicating that a sizable gap exists between the promise and reality of Web self-service.

"While companies are beginning to reap some of the benefits of providing employees with Web-based HR self-service, the results are still not living up to expectations," said Pierre Girardin, a Consultant based in Towers Perrin's Montreal office. "Narrowing this gap will require organizational commitment, a strategic approach to implementation and managing change at the employee level."

Results beginning to emerge from Web self-service

In general, respondents are seeing some measurable results from the introduction of Web self-service technology, particularly in terms of increased efficiency, accuracy and speed in performing certain HR functions:

•A significant number of respondents report improvement in the quality and timeliness of HR services to employees (70 per cent), and improved employee awareness and appreciation of company-sponsored programs (67 per cent).

•A majority of respondents also report improvements in overall organizational efficiency (67 per cent) and in the HR function in particular (62 per cent).

Continued commitment to increased Web-HR investment

One of the more surprising and significant findings from the survey relates to companies' investment plans for Web HR self-service in the near future. Despite recent world events, the economic downturn and actual results to date with self-service, half to more than two-thirds of responding companies, polled in November 2001, plan to step up investments across a wide variety of HR applications. In fact, only between one and three per cent of respondents (depending on the application) expect to decrease or slow down their investments in HR self-service.

•65 per cent of respondents say they will increase or accelerate their investments in self-service applications focused on recruiting and hiring.

•68 per cent will increase their investments in training applications and 76 per cent will step up investments in the benefits area.

•Other areas showing a rise in investment include: orientation (56 per cent), performance/career management (56 per cent), personal employee data (70 per cent), and tools to help managers handle HR responsibilities (72 per cent).

•Asked to prioritize investments, respondents ranked benefits as their number-one priority (38 per cent), followed by recruiting and hiring (27 per cent) and personal employee data (19 per cent).

Better results for more sophisticated users

One of the most interesting findings from the survey is an emerging link between results with self-service and the nature and scope of self-service applications. Essentially, the largest companies in the survey report the most success with HR-online and they are, as a group, the most expansive users, in terms of both the prevalence of applications and the breadth and sophistication of those applications:

•64 per cent of the largest companies (those with more than 50,000 employees) use the Web for informational and transactional functions, compared with 41 per cent of smaller companies (those with less than 10,000 employees) and 48 per cent for the group as a whole.

•More than half (55 per cent) of these largest companies report some results in transforming the HR function, compared with just 38per cent of the smaller companies and 37 per cent for the entire group.

Further, 80 per cent of the largest companies report success in increasing employees' awareness and appreciation of company programs, compared with 67 per cent of the smaller companies and the group as a whole.

"There's a strong correlation between using the Web for more value-added transactions and realizing results from investments," Lalani said. "There's no silver bullet, though - providing employees with meaningful self-service requires commitment and perseverance - and a willingness to work across the internal bureaucracy towards a common goal. HR technologies are changing almost daily - for instance, the next big wave of applications is in the area of manager self-service. In the interim - the more companies fully understand the potential of the Web, while maintaining a continuous improvement focus to all their on-line activities, the better their organization will benefit."

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