Think your job is tough to navigate? Try doing it when you don’t speak your boss’ language. That’s the situation many hospitality employees are caught in. While hotels have among the most diverse workplaces of any industry, workers who can’t speak English are stuck in the lowest-level, dead-end positions.
Those are the people whom Dallas-based Wyndham Hotels has in mind for its new self-guiding voluntary education program called “Sed de Saber” (Thirst for Knowledge), launched in April. While just 40 employees are currently participating, with another 40 on a waiting list, the company expects to expand the fledgling program with the goal of eventually boosting morale, retention and customer service and improving the employees’ ability to win promotions.
The program includes a battery-operated LeapPad portable system from LeapFrog, a company that makes technology-based educational products. The system has interactive modules that incorporate pictures, sounds and activities. The program begins with basic English and advances through tutorials for language used on the job as well as in everyday settings such as the grocery store and doctor’s office, with lessons in how to make an appointment, write a check–even how to call in sick. Employees who took part in the Sed de Saber pilot improved their language skills by 25 percent in just four weeks.
The cost to Wyndham is $250 per unit. Employees use the units for free, can take them home, work at their own pace and return them when they’ve completed the modules. For the program’s launch, Wyndham purchased 40 units for 18 of the company’s 150 hotels. Of Wyndham’s 22,000 employees, 41 percent are Hispanic, but the company does not track or document their English-speaking ability.
“Sed de Saber is targeted to those employees who traditionally work in the heart-of-house areas who have limited contact with guests and limited opportunity to practice their English,” says Steven Schuller, vice president of organizational development and staff. “We opted against traditional language programs, such as ESL at a local college, because we’ve found the quality depends on the instructors. We also looked at online programs, but many of our target employees don’t have a home computer.”
To further improve communication among workers and between supervisors and employees, the company has a similar LeapFrog program in the works geared toward teaching Spanish skills to English speakers.
Providing affordable health coverage to customers is built into the corporate mission statement at Highmark Inc., a health insurance company in Pittsburgh. But like the shoemaker whose children had no shoes, many of the company’s own employees couldn’t afford the escalating premiums.
The irony wasn’t lost on Highmark’s management.
“We wanted to bring the intent of our mission in-house,” says Richard Little, director of corporate employee benefits. So, in January 2004, Highmark found a solution: a salary-based employee-contribution program. Workers in higher brackets pay up to 4.2 percent of their salaries (up to 50 percent of total premium for the most expensive option); those who earn less pay as little as 10 percent of premium for that same plan.
Sliding-scale solutions such as Highmark’s emerged about 15 years ago but fell by the wayside over the ensuing years. Now, as companies struggle to manage double-digit increases in health care premiums and sophisticated technology makes the programs less cumbersome to administer, they are enjoying renewed interest. A 2004 study by Mercer Human Resource Consulting found that just 4 percent of companies had implemented compensation-based plans (the number rose to 10 percent in organizations with 500 or more employees), but many human resources experts believe they will become more widespread as health care costs continue to rise.
Yet for some companies, the programs may create more problems with morale, recruitment or costs than they solve.
D. Kevin Berchelmann, president of Triangle Performance, a Bellaire, Texas-based consultancy, is a fan of sliding-scale premiums and says two of his clients have recently launched them. “It’s difficult to explain to someone making $8 per hour why they pay the same for health care as a $200,000 executive,” he says. “These programs allow for reasonable sharing of rising costs.”
“There have been a few complaints from some people who make a fair amount of mone. But, quite frankly, anytime you do anything with benefits, someone won’t like it.”
At one of Berchelmann’s client companies, workers earning less than $30,000 pay $100 per month for a family, while those in the $30,000 to $65,000 bracket pay $195 and employees with salaries of more than $65,000 pay $270.
But such plans have a few inherent pitfalls, says Blaine Bos, a Mercer principal. For example, employees in the middle and higher tiers are likely to resent bearing the increased burden. “A wage earner making $100,000 is not necessarily rolling in dough. That is where you will get your biggest screech,” says Bos, chief analyst of Mercer’s 2004 survey on employer-sponsored health plans. “They can make the argument that there is no connection between compensation and health care utilization.”
At Highmark, “there have been a few complaints from some people who make a fair amount of money,” Little admits. “But, quite frankly, anytime you do anything with benefits, someone won’t like it.” He says he minimized employee backlash with a proactive communication plan that emphasized the company’s corporate mission as the basis for the program.
But even if higher-paid employees embrace the sliding-scale philosophy, the programs could make it tough to recruit top talent, says Deborah Marsh, human resources director at TriQuint Semiconductor, a 2,100-employee electronics manufacturer in Hillsboro, Oregon. “You have the issue of trying to remain competitive,” she says. “You don’t want to be charging your technical, professional or managerial staff way more than market.” At TriQuint, employees contribute a flat percentage of the premium, regardless of salary.
Finally, sliding-scale solutions may not be feasible for many companies from a purely financial perspective. Far from saving money or being revenue neutral, they can end up adding additional expenses if there aren’t enough highly paid employees to absorb the premium adjustment for those at the bottom of the scale.
“It’s not as easy as merely redistributing wealth,” Bos says. “At most companies, the compensation structure looks like a pyramid. So if you have 1,000 lower-salaried people at the base and only 10 people at the top, you may end up with an increase in labor costs. Unless your compensation structure looks like an hourglass or square box, your company takes the hit. And the CFO will have your head.”
Workforce Management, January 2005, p. 22 — Subscribe Now!
Twice each summer, the employees of Robert Smith & Associates PR, a public relations agency in Rockton, Illinois, attend an event so important that no one may schedule a doctor’s appointment on that day or skip it except in true emergencies. The big occasion is the company picnic, held at a nearby park. “I just bring hot dogs, chips, salad and pop–nothing extravagant,” says Robert Smith, the firm’s president, who started the tradition three years ago and estimates that each picnic sets him back about $1,000. “We play music, dance and have games.”
The New Jersey law firm McElroy, Deutsch, Mulvaney & Carpenter, takes its annual barbecue even more seriously. The firm flies in attorneys and their spouses from as far away as Denver for the event, held for the past 17 years at the home of managing partner Edward Deutsch. Last year, 400 people attended the picnic, which included a 22-foot inflatable slide, pony rides, face painters, a Ferris wheel, miniature golf, volleyball, magicians, clowns, a petting zoo, goody bags for kids and a fully stocked Good Humor ice cream truck. Attorneys staffed the 6-foot grill, and the firm’s partners supplied salads and desserts. Price tag: up to $30,000. “It’s part of our firm’s culture to treat people well, maintain a positive working environment and provide an opportunity for employees to introduce their families to coworkers,” Deutsch says. “This is a reward in and of itself. Not everything we do must have a business reason behind it.”
These are just two examples of a scene repeated at companies of all sizes nationwide. While many feel-good perks have been dropped in recent years, company picnics have survived and thrived, free of the intense bottom-line scrutiny applied to other employee rewards. In many cases, companies have instituted their first picnics in the last couple of years, and none of the workplace experts consulted for this story knew of any companies that have stopped having them, nor would they dismiss them as passé. Companies seem determined to not let the tradition fall by the wayside, arguing that their value, while not measurable, is real.
“There’s no way I’d ever cancel a company picnic,” Smith says. “My biggest business advantage is my people, and the more I build a great environment, the better job they will do. If my workers are happy, it carries over when they deal with clients, prospects and each other–and I make more money.”
The picnic is a way to support workplace morale, relationship-building and retention, says Mallary Tytel, president of Healthy Workplaces, a human resources consulting firm based in Bolton, Connecticut. “In times of uncertainty, it is particularly important to maintain corporate routines and rituals whenever possible,” she says. “That’s why more and more companies recognize that the company picnic is part and parcel of the organizational fabric, and that the return on investment is less tangible but more critical than a line item in the budget.”
Making connections Albert A. Vicere, professor of strategic leadership at Pennsylvania State University’s Smeal College of Business Administration, believes that the main value of picnics lies in the connection-building opportunities they provide. “In today’s business environment, we work far more in ad hoc teams than in formal structures. We rely on colleagues for help, information and support,” he says. “Picnics facilitate the development of such social networks. Effective teamwork is much easier when you have met and gotten to know the person you’ll be working with.”
“People come alive in the sunshine, with the smell of barbecue and the sounds of summer playing from the speakers…. This picnic lets them know their hard work and dedication are greatly appreciated.”
That’s how it works at McElroy, Deutsch, Mulvaney & Carpenter, says Barbara Breivik, director of client relations and the event’s main organizer. “Our picnic boosts employee morale and reinforces the feeling of ‘family’ within the firm,” she says. “It’s a great way for employees to meet each other in a casual setting instead of a conference room. And the fact that the managing partner opens his home to all staff and their extended families goes a long way toward making everyone feel they are important to the firm, which in turn creates a great sense of loyalty.”
Vicere agrees with both Deutsch and Breivik. “Will a company picnic have immediate, measurable financial payback? No, it won’t,” he says. “Can it help shape a high-performance culture? Yes, it can. Company picnics help build morale, demonstrate commitment and fuel loyalty. The fact is, we work harder and do better work when we like our job, respect our organization and get to know our colleagues.”
Boosting retention Health Central, a 1,400-employee hospital in Ocoee, Florida, holds picnics every May and November, with a combined budget of about $24,000. Gina Schwiegerath, director of human resources, believes the events are well worth the cost. “These picnics positively impact employee satisfaction, which we survey and measure. The amount we spend on the picnics is less costly than employee turnover,” she says.
Stratus Technologies, a company in Maynard, Massachusetts, that supplies computer servers, holds two summer picnics–an on-site barbecue for the company’s 920 employees, which costs about $7,500, and another event for families at an amusement park, water park or zoo, which may run up to $20,000. Judy Reed, vice president of human resources, says the events play a major role in boosting employee retention. “I have no idea of their ROI and we don’t measure the results, but I can tell you that our employee-retention rate is among the highest in the industry,” she says. “We retain 95 percent of our employees each year, and we get almost half of our new hires from employee referrals. We have learned that employees who are friends are more likely to remain with the company, and the barbecue is one more way to encourage people to socialize with each other. People are more likely to try to work together on team issues if they have personal connections.”
Showing appreciation Saying thank you and providing an opportunity to socialize with coworkers are among the reasons for Ohio Northern University’s annual Employee Appreciation Picnic, held since 1998 at the close of the academic year. “With a 285-acre campus, some employees don’t often see staff from the other side of the property. The picnic allows employees to interact with their counterparts,” says former director of personnel services Mindi L. Wells, who coordinates the on-campus event, which includes big tents and music from the campus radio station.
All 520 university employees and faculty members are invited, and the president, vice presidents, deans, supervisors and other campus bigwigs serve on the buffet line. “We anticipate that more than 300 will attend this year,” Wells says. “People come alive in the sunshine, with the smell of barbecue and the sounds of summer playing from the speakers. Our employees work hard all year long, especially in the days and weeks leading up to commencement. Many staff members put in extra time during May. This picnic lets them know their hard work and dedication are greatly appreciated.”
Wells adds, “Like the commercial says: cost of barbecue chicken and bratwurst, $1,700; fee for volunteers, $0; contribution to employee morale, priceless.”
Workforce Management, July 2004, pp. 70-73 — Subscribe Now!
There’s something comforting and classy about Starbucks. It’s not just the enticing aromas and blues tunes wafting through the air, the handsome surroundings or the likelihood of running into a friend or neighbor. It’s more the way the baristas (never called “counter help”) greet people, perhaps offering a blueberry scone sample, or remembering a customer’s preference for nonfat soy latte with extra foam.
Starbucks attracts a near-cult following, serving 25 million drinks a week at nearly 7,000 locations worldwide. In a four-week period ending in August, the company–which is growing by three to four stores a day–reported net revenues of $335 million, an increase of 26 percent over the same period last year. The Seattle-based coffee empire was among the top 10 on Fortune’s most recent “America’s Most Admired Companies” list. The magazine also rated it the most admired food-services company in 2001 and 2002. Business Week named founder Howard Schultz one of the country’s top 25 managers in 2001.
Since Starbucks began with a single store in 1971, its overriding philosophy has been this: “Leave no one behind.” With that in mind, new employees get 24 hours of in-store training, steeping themselves in information about coffee and how to meet, greet and serve customers. Full health-care benefits (medical, dental, vision and alternative services) are offered to all employees, including part-timers who work at least 240 hours per calendar quarter. The EAP is available to all employees. Employees share in the company’s growth via “Bean Stock” (stock options) of up to 14 percent of their gross pay, and a stock-investment plan allows them to buy shares of Starbucks common stock at a discount (85 percent of fair market value) through payroll deductions. The company also matches employees’ contributions to their “Future Roast” 401(k) plans, adding from 25 to 150 percent of the first 4 percent of pay, depending on length of service.
As a result of such measures, Starbucks employees have an 82 percent job-satisfaction rate, according to a Hewitt Associates Starbucks Partner View Survey. This compares to a 50 percent satisfaction rate for all employers and 74 percent for Hewitt’s “Best Place to Work” employers. Though the company won’t release specific numbers, it also claims that its turnover is lower than that of most fast-food establishments. But it’s not just the benefits that attract employees. Another company survey found that the top two reasons why people work for Starbucks are “the opportunity to work with an enthusiastic team” and “to work in a place where I feel I have value.”
Omollo Gaya, who grew up on a coffee farm in Kenya and immigrated to San Diego to attend college, was drawn inside a Starbucks store seven years ago by the heady aroma. He bought a pound of coffee, struck up a conversation with the employee behind the counter, and was impressed by the barista’s knowledge. As he sipped his brew, “something clicked,” Gaya says. After researching Starbucks, he applied for a job and spent the next four years in a San Diego store before being promoted to his current position as one of eight coffee tasters at company headquarters. After six years, Gaya exercised his Bean Stock options, which netted about $25,000 after payment of the exercise price, to build a new four-bedroom house for his widowed mother on 15 acres in her home village.
“The health benefits, the 401(k) and the stock options really surprised me, and confirmed what this company is all about,” Gaya says. “From my first day on the job, I got a lot of satisfaction when I offered a cup of coffee to customers and saw the smile on their faces, when I answered their questions about coffee, and when I saw their enthusiasm when they returned with a friend or colleague. My love for coffee started when I was 5 years old, but I never thought it would come to mean so much to me. Buying a home for my mother is the highlight of my being with Starbucks.”
Maintaining that kind of feel-good atmosphere in a small mom-and-pop company is one thing. The question is how Starbucks manages to keep the spirit flowing with 11,000 full-time and 60,000 part-time employees in North America, and an additional 7,400 workers globally. “Staying ‘small’ while we grow is one of our biggest challenges,” says Dave Pace, executive vice president of partner resources (the company’s term for human resources). “It sounds clichéd, but we do it by taking our mission statement seriously. Almost all companies have a mission, but at Starbucks, we use it as our guiding principle and hold it up as a filter for decision-making.”
Providing a great work environment and treating employees with respect is number one on Starbucks’ six-point mission statement. The list also includes a commitment to diversity; excellence in purchasing, roasting and delivering coffee; keeping customers satisfied; contributing to communities and the environment; and, of course, achieving profitability.
Starbucks encourages its employees, who are called partners, to keep in mind its mission statement, monitor management decisions, and submit comments and questions if they encounter anything that runs counter to any of the six points. Employees submit about 200 such Mission Review queries a month, and a two-person team considers and responds to each one. As a result of one such review request, Starbucks extended its military-reserve policy to protect the jobs, salaries and health-care benefits of employees who were called into action after September 11 and again during the Iraq war.
The company also encourages community involvement by donating $10 for each hour that an employee volunteers to a nonprofit or charitable organization. Profits from sales of the company’s logo-emblazoned “coffee gear” are channeled into clubs and services for employees, which include everything from running groups and bowling leagues to quilting and book clubs. Employees can donate an amount of their choice to a voluntary “CUP (Caring Unites Partners) fund,” which is used to provide grants to fellow employees who fall on hard times. And every year, as part of its Earthwatch program, the company selects a few employees to travel to coffee-producing parts of the world, where they learn firsthand about environmental and conservation issues from the growers. Last year two were selected; this year five are going.
“People come to Starbucks to socialize and interact, so our partners do much more than just make coffee,” Pace says. “They are the ones who create that environment in our stores and make this a place that people feel good about. So they feel empowered and know they are making a contribution. This is a company where we look out for each other and look out for the community. And when people see us responding to them, they feel like this company really ‘gets it.’ ”
Workforce Management, October 2003, pp. 58-59 — Subscribe Now!
You can’t please everyone–not that employers haven’t tried. Eager to attract and retain top talent, corporations have paid heed to the pleas of working moms and dads in the past decade or so with an array of “family-friendly” policies. But instead of receiving notes of thanks for flextime, day-care centers, telecommuting opportunities, child-care reimbursement accounts and the like, human resources executives often face angry backlash from employees who don’t have children and believe they aren’t getting their fair share of benefits.
“Employees without children have lives outside of work and consider their needs and responsibilities just as important as those of workers with kids,” says Tom Coleman, an attorney and executive director of Unmarried America (formerly called American Association for Single People), a nonprofit advocacy group in Glendale, California. “Resentment occurs and festers if employers expand programs that cater to married couples or workers with minor children without offering alternative benefits to those who are not married or who aren’t raising children.” He ticks off a list of policies that often favor families and parents, from working hours to health benefits and even company-sponsored “family” picnics.
But Joan Williams, director of the Program on Gender, Work and Family and professor at American University’s Washington College of Law, maintains that there’s nothing inherently inequitable about being family-friendly. “We need these policies because a lot of the talent pool is made up of women, as well as men who aren’t willing to make the work/family trade-offs that their fathers made,” she says. “If there’s a backlash by singles, the problem isn’t with the policies. It’s with their implementation and management.”
Supervisors frequently make the mistake of cutting “secret side deals” with individual workers who request special arrangements for flexible hours, compressed workweeks or telecommuting. Such informal agreements are surefire recipes for bad feelings and charges of favoritism, says Williams, who also wrote the book Unbending Gender: Why Family and Work Conflict and What to Do About It. To avoid ill will, companies can institute a formal application process available to all employees, whether they want the time to take a yoga class, play golf or attend junior’s soccer game. “That sends the message that you understand that adults need flexibility for a whole range of reasons,” she says. “End the special deals, open the process to everyone who is qualified and can make a business case for it, and the resentment and stigma will evaporate.”
At Deloitte & Touche, parental status is “irrelevant,” says Stan Smith, national director of the company’s Employer of Choice-Next Generation Initiatives. Employees who request a flexible work arrangement are not asked to state their marital/family status or explain why they are making the request. They need only prove that they can meet their job requirements. “We believe that a flexible environment that helps our people navigate their personal and professional responsibilities is a part of sound business practice,” Smith says. “Flexible arrangements are available to all of our people, whether they’re married or single, parents or non-parents, provided that they continue to meet the service needs of their clients and the arrangement makes business sense.”
That emphasis on “business sense” is critical for deflecting negative feedback from naysayers. While many companies institute such programs under the guise of “social consciousness,” they are, in fact, business decisions. And that’s the frank message that employees need to hear, says David Russo, who spent 20 years as vice president of human resources for SAS Institute and now runs Eno River Associates, Inc., a human resources consulting practice in Durham, North Carolina. “By and large, companies don’t effectively communicate that these benefits are recruitment and retention tools that heighten workforce productivity and create more effective and efficient business environments,” he says. “Companies need to explain how the programs benefit all employees, how they benefit the company, that they are not gifts you are giving to someone else, and how they do not infringe on any one person’s piece of the action.”
Communication and positioning are key. At Household International, for example, Mary Bilbrey, vice president of employee benefits, presents the company’s Complete Rewards benefit package as a “menu of choices,” so employees can pick and choose programs that suit their particular needs, lifestyle and stage of life. The comprehensive offerings include something for everyone–from flexible work hours, training opportunities and incentive plans to subsidized dependent-care accounts, tuition reimbursement and various discounts and services. In addition, a Life Balance program offers phone consultations, crisis counseling and literature on a variety of issues, as well as “concierge” benefits, which vary from personalized referrals for child/elder-care resources to information on where to get the best deal on a major appliance or car.
It’s important to publicize the benefits through the intranet, in-house newsletters and other mediums. Connie Jacot, global work/life effectiveness manager at Intel, publicizes individual success stories and makes the company’s broad spectrum of benefit choices as visible as possible. One such story: An employee who has a passion for painting is at his most creative in the morning, so he was able to rearrange his daily schedule to arrive at work a few hours late. Another employee, a musician, leaves at 4 p.m. when he has a gig. “Because we continually communicate all the choices we offer, from flextime to financial-planning seminars or our fitness center, we don’t have the appearance of favoring one group over another and employees see that work/life doesn’t equal child care,” she says.
Before instituting such benefits, however, companies should understand their employee demographics–how many are married, how many have children and what percentages are in various age tiers–and use focus groups, surveys and similar tools to solicit their input in the program’s design. “Do due diligence. Conduct a proper analysis that takes into account your employees’ needs and desires,” Russo says. “And when designing programs, look for cost-accountable ways to apply them universally.” The idea is to open up as many benefits as possible to as many people as possible. For example: Lactation rooms can be instead called “personal space” and made available to anyone who needs to escape for a bit–whether to pump breast milk or seek relief from a migraine. Child-care programs can be expanded to include elder care.
That three-pronged approach–understanding the employees’ needs, soliciting their input and making the benefit accessible to everyone–is precisely the tactic that the Hartford took when it recently revamped its paid-time-off program. Previously, employees could take days off for vacation, personal time or sick days. “But those three ‘buckets’ often didn’t mirror people’s lives,” says Lynn Farrell, assistant vice president of human resources strategy and planning. Through surveys and focus groups, the insurance giant learned that employees with families, especially single parents, wanted a more lenient unscheduled-absence policy. In response, the company designed a paid-time-off program that provides a set number of days for employees to use as they wish. “Whether someone wants to take an afternoon to attend a school assembly, close on a house or go to a yoga class, the decision is up to the individual. This meets the needs of single and non-parent employees as well as those who have families,” Farrell says.
When it comes down to it, the very notion of “family-friendly” benefits may be passé–or at least have outlived its usefulness. “Many companies have dropped the term in favor of other descriptions that do not use the word ‘family,’ ” says Martha Muldoon, who previously led BankBoston’s work/life strategy and today is a Boston-area independent consultant who specializes in contemporary workforce issues.
“Almost all of us have traditional concerns that transcend family status, whether we’re caring for aging parents or partners who are ill, fulfilling volunteer commitments, furthering our education, managing difficult commutes or saving to buy a home.”
The bottom line for human resources is that the solution–and the challenge–is to realize that when it comes to benefits, one size does not fit everyone, Muldoon says. Companies must establish and publicize programs and policies that all employees can participate in, whether they are married or single, parents or not. She adds that it’s also important that the benefits be part of a larger culture of fairness and respect. “If employees are listened to and allowed to share their concerns, and if actions are taken in response to those concerns, the sense of favoritism will be minimized. Companies that recognize the diversity, complexity and reality of people’s lives both on and off the job, and create a menu of benefit options that address their differing needs, will be rewarded by a more committed and productive workforce.”
Workforce Management, August 2003, pp. 77-79 — Subscribe Now!
The way Shelly Bancroft sees it, human resources and company success areinextricably linked–and technology is the glue binding the two. As assistantvice president of human resources information systems at the Hartford, Bancroftis responsible for the human resources department’s automation strategy. Sheis now heading up a massive three-year technology initiative to consolidate andbring online the company’s various HR systems.
Known internally as “e-HR,” the initiative, which is based on humancapital management applications made by PeopleSoft, is expected to boostproductivity and efficiency, and, over the long term, reduce costs. But Bancroft’soverriding goal is to align the Hartford’s human capital with the company’skey business objectives, while shifting the human resources department from anadministrative to a strategic role.
The original impetus for the initiative was a branding strategy called TheHartford Experience, which refers to the $15.1 billion financial service andinsurance company’s promise to provide solutions to problems, make it easy forcustomers to conduct business, and deliver superior service. It makes sense thatemployees will be more likely to deliver that kind of positive experience tocustomers if their own encounters with the company are equally glowing. Withthat in mind, the human resources department sought ways to extend the HartfordExperience to its 27,000 workers.
Bancroft saw technology as key to achieving that goal. “Our employees’experiences with HR transactions should reinforce the message that we want todeliver to our external customers,” she says. “Through technology, we canmaximize each employee’s contribution and strengthen their Hartfordexperience, so they’ll be in a better position to serve customers.”
A veteran of both human resources and technology, Bancroft has been with theHartford for 20 years and in her current position for six. She started out ininformation technology and business analysis, and over the course of her careerhas developed computer applications and managed IT departments and informationcenters. She moved to human resources in 1989, during a time when HR technologytended to revolve around ad hoc reporting, program development, and technicalwork.
And as the human resources department becomes astrategic player, Bancroft faces the challenge of developing systems thatsupport the Hartford’s mission and brand.
Today the field of HRMS–and Bancroft’s role in it–is far morecomprehensive and vital. And as the human resources department becomes astrategic player, Bancroft faces the challenge of developing systems thatsupport the Hartford’s mission and brand.
The e-HR initiative, which has been under way for about 18 months and ishalfway complete, includes upgrading HR information systems from a manual to aWeb-based operation; developing a new hardware infrastructure to support theupgraded systems; implementing customized functions aimed at managers;constructing a data warehouse; and using analytic tools to measure HR functionssuch as staffing, compensation, talent management, and training.
Rolling out a comprehensive array of employee and manager self-servicecapabilities was the first step, which is mostly complete. Now workers havequick, easy access to their employment, personnel, and benefit information. Theycan update their personal data, view their compensation history, refer friendsto jobs, apply for open positions within the company, complete a profile oftheir skills, and automatically receive e-mail alerts of job openings that matchtheir profile.
Managers also can maintain correct listings of employees who report to them;change reporting relationships; view their employees’ compensation history;manage and plan employees’ total compensation, including salary, bonuses, andincentives; create requisitions for new positions; and submit compensationchanges–all from the desktop.
“Just look at what it takes to process an address change in the old worldversus the Web world,” Bancroft says. “In the past, it was time-consumingfor employees to make an address-change request. Now they have it at theirfingertips. They just click on a link and make the change.”
Such applications can save not only time and frustration but money as well,according to a PeopleSoft return-on-investment calculator that compares costs of business processes before andafter deployment of self-service applications. “Most organizations see a 50 to75 percent reduction in transaction costs,” says Jason Averbook, director ofglobal product marketing for HCM at PeopleSoft. “For example, each call on atypical help desk costs around $30. But using a Web-based self-service system,each transaction costs around 10 cents.”
Self-service applications lead to fewer errors, more accurate data, andquicker access to information. “Instead of having just HR responsible, now thewhole workforce is interacting with business processes in real time,” Averbooksays. “Employees have access to the information they need when they need it.”
But despite the convenience, transitioning from a manual to an online way ofdoing business is a “tremendous culture shift,” Bancroft says. “Changemanagement was our biggest challenge.” To introduce the new capabilities toemployees, the Hartford offered training programs, including “employee expos,”during which the HR staff demonstrated the new applications. “We wanted tomake people comfortable with the change and get them excited about it, so weshowed how it will directly benefit them,” Bancroft says. “That went a longway in ensuring our success.”
Bancroft’s current challenge is building an integrated data warehouse to store and manage HRMS data and link it withthe company’s financial, customer, and contractor systems. Such a consolidatedsystem will eliminate the need for ongoing IT maintenance and training formultiple systems. More important, once the data warehouse is complete, HR staffand managers will have desktop access to powerful analytic tools and will beable to slice, dice, drill down, and delve into data for in-depth analysis, aswell as measure effectiveness of HR programs and obtain better insight intoworkforce performance.
“Once this foundation is in place, we will be positioned to look at dataanalytically and focus on results, measurements, and metrics,” Bancroft says.”For example, we’ll be able to tie competencies to job openings,compensation, and performance management. We can create scorecards with jobobjectives, which can drive total compensation. Learning events, such astraining, classes, online resources, and reading materials, can be linked tocompetencies, helping employees strengthen the skills they need to advance. Froma management perspective, it makes sense to tie everything together.”
Such a system will help executives quickly see if key performance indicators–suchas head count, compensation, or ethnicity ratios–are on track or out of whack,Averbook says. “Instead of flat reporting, it can deliver instant, real-timealerts if data is not consistent with the company’s goals, and it showsmetrics in the user-friendly form of red, yellow, or green lights. For HR to bestrategic, it needs to see more than static data. It needs to see how peopleaffect customers and the company’s finances. It needs to see how competencies,skills, and education interact.”
Linking the systems will also help managers and HR staff get new workers onboard as quickly as possible, Bancroft says. “As soon as a new hire accepts ajob offer, a ‘hire record’ will be automatically created, which will triggeridentifications, equipment procurement, and all the other steps necessary tohelp the new employee be productive from day one.”
The Hartford would not divulge the cost figures involved in its e-HRinitiative, saying the information was “proprietary.” But according toPeopleSoft, such a massive undertaking could cost several million dollars,depending on how many applications are being licensed, the organization’srevenue, and its number of employees.
However, the resulting gains in productivity and efficiency, along with fewerexpenses for printing and distributing pay stubs and various employment forms,decreased time and costs for recruiting and hiring, and savings on anticipatedredeployment of HR staffers, will more than make up for the e-HR costs, Bancroftsays.
“At the beginning of the e-HR process, we conducted a detailed analysis ofeach human resource transaction to measure the productivity we would realize. Welooked at how many people were involved with a transaction–for example,employee, manager, administrative assistant, HR specialist–and how much timewas devoted to each step,” she says. “We could prove there would be hugeproductivity gains by shifting from a manual world to a Web-based one, and thatwas the biggest seller [to the company’s leaders].”
Clunky is probably the best way to describe the human resourcessystem as it now stands in the U.S. Navy. The 20-year-old technology consists ofabout 78 legacy systems, along with hundreds of smaller applications. None arelinked, so each piece of information on every one of the active-duty 380,000sailors has to be manually entered again and again. And with more than 45,000new sailors and up to 4,000 officers enlisting each year, plus another 60,000sailors and 17,000 officers moving or changing jobs on shore, ships, squadrons,and submarines, it’s no wonder that inaccuracies, errors, inconsistencies, andall manner of human resources headaches occasionally surface.
“The training database isn’t linked with the personnel database,”says Vice Admiral Gerald L. Hoewing, who assumed the duties of chief of navalpersonnel/deputy chief of naval operations (manpower & personnel) lastOctober. “The open job database isn’t linked to sailors’ competencies. Thefinancial system isn’t linked to personnel records. And it goes on and on.”
But that awkward and inefficient situation is about to change under Hoewing’sleadership. In December, the Navy began implementing a human capital managementand data warehouse application made by PeopleSoft. The streamlined system, whichis expected to be fully functional by 2004, includes analytic, self-service,recruiting, and other applications to consolidate the various systems, link andintegrate the disparate databases, and allow sailors online access to theirpersonnel records.
“This HR system upgrade will have a direct, positive impact on ourmission effectiveness, combat readiness, and organizational efficiency,”Hoewing says. “For example, by linking job databases with sailorattributes, we’ll improve our ability to get the right sailor to the right placeat the right time.”
When it comes to HR technology, the Navy is the Defense Department leader,Hoewing says. “This application suite enables us to gain efficiency; gettimely, accurate data; be more effective; and reduce the costs of maintainingand operating multiple legacy systems–all with a common, off-the-shelf product.Over the next several years, the entire Department of Defense will be moving tocommercial solutions in order to reduce administrative and maintenance costs.The Navy is ahead of the game.”
The new system, which cost just over $7.5 million, will consolidate andcentralize benefits, training, assignments, qualifications, and compensationinformation. It will enable immediate updates and provide access toup-to-the-minute data on personnel skill sets and competencies required to buildfuture force structures. And it will allow the Navy to measure, manage, andmaximize service members’ performance.
Sailors will be able to match their qualifications to job opportunities andupdate their preferences for geographic location and type of duty. They’ll beable to access their personal information, instantly update their records, tracktheir training, and manage their careers from home, on a ship, or at a base–allthrough a simple Web browser.
“Our stakes are high,” Hoewing says. “So every system weimplement and every policy we make must contribute to our ability tosuccessfully operate in the four corners of the world in support of our nation’sdefense.”
Jeannine Pecora, human resources and training manager for Delta Corporate Services, doesn’t mince words. “Our HR system is failing us,” she declares. Until now, the Parsippany, New Jersey-based management consulting firm has made do with a homegrown system and an amalgamation of applications such as MS Office, Access, and Excel. But reporting is limited, tedious, and spreadsheet-intensive; the various software programs are not integrated; data must be entered multiple times; and retrieving information is often hit or miss.
“But our business has grown tremendously, and we realize we have outgrown our technology,” she says. “Our systems desperately need to be updated or replaced.”
Her wish list: a system that will smoothly manage and track records, automate routine HR tasks, and eliminate the ubiquitous spreadsheets. “With today’s technology, we should be able to generate, proof, authorize, and record information without having to print or pass a sheet of paper,” she says.
Does Delta’s situation sound all too familiar? Is your HR system ahelp–or a hindrance? Does it streamline operations and boost efficiency and productivity? Does it cut down on paperwork, generate sophisticated reports, and let employees and managers handle routine functions? Or does it bog down, crash, lose data, and cause maddening bottlenecks and frustratingdelays–creating even more work for you and your staff?
The solution to your software snags may lie not in upgrading the technology, but in making better use of what you now have
If your HR system seems to be more trouble than it’s worth, you may not have to give up on it just yet. A few relatively inexpensive add-ons could make the difference between phlegmatic and powerful. Or the solution to your software snags may lie not in upgrading the technology, but in making better use of what you now have.
Here are some cost-effective tips for supercharging your HRMS.
1. Consider Add-Ons Complementary third-party tools that handle functions such as recruiting, training, hiring, or reporting can enhance an antiquated HR system. For example, one such tool, Eventrix by PerfectSoftware, which works with any HRMS product, automates new-hire and termination processes by tracking employee data and distributing the information to every department that is affected, from the mailroom to security and payroll. But there’s danger in going overboard with add-on features. “Don’t spend good money after bad,” warns Scott Busby, chief information officer for AdvanTech Solutions, a Tampa, Florida-based HR outsourcing firm. “If your legacy system doesn’t have much of a future, temper your spending. There’s no point in putting a great front- or back-end product on a system that’s going to last only another one or two years.”
2. Get Portal Power Even companies that are clamping down on software spending are opening their wallets to portal applications. That’s because such front-end software, which runs about $10,000, can Web-enable your system, integrate applications, exchange data throughout the enterprise, allow employee or manager self-servicecapabilities–and ultimately boost productivity and cut costs. According to a study by Best Practices, LLC, on how companies can optimize limited HR resources, such software results in a 60 percent reduction in cost per transaction.
“You’ll get the power of the Web at a very inexpensive cost compared to a new HRMS,” says Steve Larson, head of strategic systems consulting and integration for the HR consulting firm Watson Wyatt.
According to a recent survey by CIGNA, an employee-benefits organization, 80 percent of workers say that they currently cannot manage their benefits online, and more than 40 percent say they would like to do so. “Benefits managers really should consider accelerating their time lines for rolling out additional online services that better meet workers’ needs,” says Eric Consolazio, senior vice president and head of CIGNA E-Commerce.
What’s even cheaper than buying portal software is enlisting the help of someone in your tech or creative department to build a Web page on top of your existing HR applications. It’s a fairly simple process, but can reap great time-saving benefits, says Brian McIntyre, president and CEO of Columbia, Maryland-based Working Concepts, a division of Towers Perrin that implements HR technology for large and medium-sized companies.
“You can post policies and procedures and benefits information,” McIntyre says. “You can let employees make basic changes or transactions, such as address or W-4 changes. They can check their 401(k). And they’ll no longer have to phone HR to ask questions like, ‘When is benefits enrollment?’ ”
3. Integrate Your Systems Are your HR applications on speaking terms?
“Many companies have purchased individual third-party applications that don’t talk to each other and aren’t integrated with the HRMS,” Larson says. If that’s the case, you may have to enter the same information multiple times. Or worse, you may end up with discrepancies and inconsistencies betweensystems.
It’s important that applications are integrated not only throughout HR but also throughout the entire company–especially with departments like finance and payroll
Ask your IT department for help. A common computer language, such as XML (Extensible Markup Language), may be able to integrate your benefits, compensation, performance, and other systems with your HRMS, thus allowing you to exchange data between systems.
It’s important that applications are integrated not only throughout HR but also throughout the entirecompany–especially with departments like finance and payroll, says Russ Campanello, senior vice president and chief people officer for NerveWire, a management consulting firm in Boston. That’s why he made sure that NerveWire’s HRMS was compatible with the rest of the enterprise. “Then there’s no argument about who has the right data, and we don’t spend any time closing the gap between the information payroll has and the information we have,” Campanello says. “We are not going to have an application island in HR.”
4. Hire a Host Jennifer Cress, chief people officer for STI Knowledge, an Atlanta-based company that handles support calls for businesses, says outsourcing solved her company’s technology woes. As STI Knowledge doubled in size to about 250 employees and began offering more benefits, such as a 401(k) and flex plans, its seven-year-old homegrown HR system couldn’t keep up.
“My biggest headache was the old system’s reporting functionality,” Cress says. “I had tons of spreadsheets. Whenever I needed something, I would have to go to the IT person to write an SQL query and get the data.”
But the notion of implementing an entirely new system was overwhelming, Cress says. “I didn’t want to hire more IT people. I didn’t want more servers. I didn’t want to worry about systems going down.”
She turned to Employease, a Web-based, hosted HR management program, which charges her about $36,000 a year. “I’ve gotten rid of a lot of spreadsheets and paperwork,” Cress says. “Employease provides all the analytic reports that I want, so the HR team can spend time on improving employee relations, orientations, and training. Now employees even enroll in their health plans online, and the data is sent directly to the medical-benefits carrier.”
But while turning to a Web-based outsourcing firm to host your HRMS can be cheaper and simpler than buying, installing, and maintaining a system in-house, there’s a frustrating downside: you give up control. “The outsourcing company may not be able to react to your requests for information or make changes as quickly as you need them to,” McIntyre says.
A possible solution: considering outsourcing as a single HR function, rather than the entire HRMS. “Then you can retain control over the HR technology,” he notes.
5. Use What You Have The problem may not be the technology. It might be the users, employees who aren’t making the most of the software’s functions.
For example, many HRMS packages include self-service features that enable managers and employees to resolve inquiries and conduct transactions from their PC desktops. “But those tools are of no use if people are still filling out forms and bringing them to HR,” Larson says. “Self-service will do all sorts of fantastic things, but if you can’t get people to use the process, where’s the savings?”
The CIGNA survey shows that while 57 percent of employers say they offer online access to health-care or retirement benefits, most employees say they still conduct transactions by mailing paper forms, making a phone call, or working with benefits managers.
Many companies “barely scratch the surface of what their technology is capable of doing,” Larson says. “They use the most common 5 or 10 percent of the features, but rarely realize its full power. They never get the complete return on investment that the software can deliver.”
That’s especially true, he says, of companies that rely on “vanilla implementation” (software installed straight out of the box, as opposed to customized installation based on your specific business needs) of big enterprise packages. If you spend all your tech time and budget blindly upgrading to the latest version, the result may be that no one has a chance to master the features that are already there.
The solution is to analyze your enterprise before upgrading. Determine which processes would give you the biggest bang for the buck, how to tailor your existing technology to fit your needs, and how well you are deploying the software features that can best serve your company.
6. Restructure Your Team Consider having one person–perhaps someone culled from your organization’s IS or ITdepartmen– devoted to HR technology or reporting. “Have that person focus on how HR technology is being used,” McIntyre suggests. “For example, he or she could set up reporting templates, rather than having several individuals in HR each doing their ownthing–perhaps creating redundancies or working at cross-purposes.”
7. Don’t Go It Alone There’s a lot of tech help out there–some of it free or ridiculously cheap–if you just look for it. For example, you can seek out users’ groups. Or network with similar-sized companies in the same industry or at the same stage of growth as yours, and ask what works for them. Ask your HRMS vendor to send someone over to spend a day teaching tech tricks to your staff. Campanello says he simply spent a lot of time “sitting with the folks in IT and development.”
Some HR employees may not have been formally trained in using your system. That’s especially likely if your department has experienced staff turnover. A day or two of training can teach them how to take full advantage of what the technology offers.
It may also be well worthwhile to bring a consultant on board. “If you have spent $50,000 on technology, consider spending an additional $10,000 to get someone to manage it for you,” McIntyre says. “You may realize real hard-dollar benefits in the way you conduct your business. Use your technology as a catalyst to improve your business processes.”
