Why HR self-service, integration and automation are key to successful HR.

21st January 2011

Human resources are all about people, but are they essential to the HR process? Sometimes the answer is a resounding ‘yes’; sometimes the answer is a resounding ‘no’, as Lesley Meall, FSN contributing editor, found when she looked at the use of self-service facilities in HR and payroll, and found ‘the human touch’ distinctly lacking – though not always in a bad way.

When Fritz Lang made the futuristic film Metropolis, in the depression-ridden Germany of 1927, he created a dystopian world where robots looked like people and people worked like robots, and increased automation created drudgery, rather than relieving it. Over the intervening years, we have experienced dramatic increases automation, and although this has not all been for the greater good, things haven’t turned out quite as black and white as Lang imagined them, either. But there are signs that in one of the most people-oriented areas of business, HR, human interaction may be on the decline. 

After the Aberdeen Group recently surveyed 160 organisations for its study The Future of Core HR: Building the Business Case for Automation and Integration, it concluded that automation, integration, and employee self-service are the keys to more efficient HR – and recent economic conditions have pushed efficiency to the top of the agenda even in areas of business that have resisted it in the past. The research found that by streamlining transaction times and giving employees greater autonomy through self-service capabilities, companies could achieve 18% higher scores on employee engagement than their competitors. 

During the downturn, employee engagement has emerged as one of the new holy grails of ‘human capital management’; it is less cost effective to recruit and train new employees than it is to hang on to the motivated and skilled employees you have already; and some organisations have put significant resources into ‘touchy feely’ initiatives designed to achieve this. But the Aberdeen findings seem to indicate that employees appreciate the control, flexibility and reponsiveness they get from the automated do-it-yourself approach more than they appreciate the warm fuzzy glow they get from interacting with an actual human being; and while this may not bode well for some HR professionals, it seems like good news for employers. 

Aberdeen found that in ‘best in class’ organisations, the integration of manager self-service tools and workforce dashboards can improve staff productivity by up to 250% (yes, that is 250), and increase revenue per employee by up to 180%, and reduce overtime costs by up to 125%, right across the organisation (and not just in and around HR). According to the research, taking a ‘best in class’ approach to HR can also deliver business benefits in a wider sense, because the software and systems that support the automation of HR processes put more accurate data in the hands of managers, and enable them to make more educated workforce decisions. 

How significant this is depends on a number of factors, not least the size and type of organisation involved. Although the increasing availability of on-demand software and services mean that small organisations can access automated HR facilities as easily as the very large, economies of scale are a factor. Answering questions such as ‘How many people do we employ? Where are they and what functions do they perform?’ is a no-brainer when you have a handful of employees, more of a challenge if you have a few hundred, and a gargantuan undertaking if you have thousands of employees in dozens of countries, as some multinationals do. 

The insurance group Aviva, for example, has 12 semi-autonomous European businesses, which are as diverse and complex as you would expect with myriad languages, numerous jurisdictions and HR technologies, and workforces that range from 50 employees in Lithuania up to 4,500 employees in France. So when a new CEO joined the European division in 2008, and he asked the HR director the ‘who, what, where’ question, it is perhaps unsurprising that the answer was not immediately forthcoming. ‘It took three weeks of work and hundreds of phone calls to find an answer, and even then I was only 80% confident in the accuracy of the data,’ recalls HR director Andy Moffatt. 

Since then, Aviva has made a lot of changes in its approach to HR. It has introduced an ‘expert system’ AskHR from Transversal, to answer staff HR queries (which is does very effectively) and it has standardised and unified its HR processes across Europe with the support of an on-demand human capital management system from (the Software as a Service pure play) Workday. Once the roll out is complete (which should be any time soon), Aviva expects the benefits to range from more consistent HR processes to common definitions of job roles – and fast answers to tricky questions from the CEO. ‘Our ability to capture management information has already improved,’ says Moffatt. 

But this is just the tip of the benefits iceberg, and many of the other advantages of increased automation of HR processes and increased use of self-service facilities can also be enjoyed by mid-sized organisations (and you can learn more about the specialist HR software and services available, and the increasing overlap between outsourcing, on-demand services and self-service functionality, in a previous FSN article). This is particularly the case when they are accessed using on-demand software and services, and these are applied in areas where they provide greater autonomy to operating units, managers and employees. Witness the experiences of Pizza Hut, the charity Changeworks, and the Panhandle State Bank.

‘Pizza Hut is always on the look out for ways to become even more efficient,’ says Steve Packer, finance manager at Pizza Hut, so it recently replaced a bureau service with a hosted payroll and HR system (from NorthgateArinso).‘The functionality and flexibility will improve the HR and payroll services we provide our restaurant teams,’ he says, and self-service features will enable managers to check employee details online, and manage their own HR administration, as well as making payslips available to employees online. While at the Scottish charity Changeworks, replacing manual HR processes and spreadsheets with an HR system (from Advanced Business Solutions) will empower all of its 175 staff and their managers. 

Staff will be able to access and update HR information such as annual leave requests and personal data, and managers will be provided with more accurate and up-to-date employee information. ‘The system will make it easy for staff located in remote locations such as the Highlands and Islands to quickly access and distribute information,’ says Changeworks chief executive Teresa Bray.  ‘We have a high turnover of temporary staff and so it’s a challenge to keep an up-to-date record of all personnel details,’ she says, and the accurate and timely HR information the system provides will allow the charity ‘ to better manage staff on short-term contracts whilst more accurately monitoring absence.’ 

At the Panhandle State Bank, staff recently gained the ability to take ‘self-service’ a step further, when Ultimate Software added an iPhone app to its HR offering, UltiPro. After a customer has enabled the UltiPro iPhone app for its organisation, individual end users can access it in the same way as they would any other iPhone app, by downloading it from the Apple iTunes Store – then logging into the app with the same UltiPro sign-on they use at work. ‘I love this application,’ said Mya Sanger, HR systems administrator for Panhandle State Bank, ‘many of our employees already are iPhone users, so this app can add a lot of value and convenience.’

Because this app enables UltiPro customers to give their HR staff, managers, and employees instant access to important HR information via the Apple iPhone, it gives them the ability to make effective decisions and conduct business regardless of location or time of day. Managers can approve or deny daily workflow transactions, such as salary changes and paid time off, using their iPhones, and all employees can quickly access their company’s portal, scan the employee directory to look up contact information or employee photos, and more. ‘I especially like how it tells you how many new items are in your inbox right on the screen,’ says Sanger, ‘and the employee directory will be a big hit with our managers.’ 

All of this automation and self-service functionality can dramatically reduce the human interaction between the HR department and the rest of the organisation, and there is plenty of room for debate on the extent to which this is a ‘good thing’ and the extent to which it is a ‘bad thing’. Perspective is everything. Clearly, it is a double- edged sword for HR professionals. But as well as making some of them surplus to requirements, increased automation and increased use of self-service tools can have a positive impact on the productivity and performance of those who do remain in the HR department, and in a variety of ways: 

  • With self-service tools such as SurveyMonkey employee surveys can be conducted in a fraction of the time required by a paper-based system or email;
  • Using a system such as AskHR to create a Q&A knowledge base that can answer the most common queries can free HR staff for more complex queries;
  • Online recruitment and talent management systems can reduce the cost per hire and dependence on recruitment agencies;
  • Online performance management tools make it easier to align performance appraisals with strategic plans;
  • Putting HR & HSE guides, policies and procedures online and making them available on a self-service basis will reduce telephone queries and improve compliance. 

So increased use of automation has the potential to transform HR inside and outside the HR department, and while this may be a mixed blessing for some, it’s nothing like as bad as the future Fritz Lang was expecting, and even if it were, the financial benefits might be too good for some organisations to ignore – as the banking consultancy Sofgen discovered when it gave its 300 staff access to a browser-based system from Cascade HR. Thanks to extensive self-service functionality, tasks that previously took hours to complete can now be done in minutes. ‘Our key HR staff are now saving approximately one day per week each,’ says global HR director Pritul Khagram, and this is saving Sofgen £40,000 each year.