Author: Samuel Greengard

Consult the following Web sites for more information about training for expatriates.

AcrossFrontiers International
www.acrossfrontiers.com
Its interactive, multimedia computer-based training (CBT) covers an array of countries and topics.

Craighead Global Knowledge
www.craighead.com
Offers an array of online offerings for business travelers and expatriates, including developing online policies and procedures, country information and cross-cultural distance learning.

Kroll Associates
www.krollassociates.com
Its Travel Watch service details crime and problems in over 250 cities and 100 countries.

Pinkerton
www.pinkertons.com
Provides global intelligence services that track crime and incidents worldwide.

Consult the following Web sites for more information about training forexpatriates.

CraigheadGlobal Knowledge — Offers anarray of online offerings for business travelers and expatriates, includingdeveloping online policies and procedures, country information andcross-cultural distance learning.

KrollAssociates — Its Travel Watchservice details crime and problems in over 250 cities and 100 countries.

Pinkerton— Provides global intelligence services that track crime and incidentsworldwide.

Workforce, December1999, Vol. 78, No. 12, pp. 106-108 — Subscribenow!

If there’s one thing that Daniel Jones has learned from more than two decades of working in human resources, it’s that mergers and acquisitions are a fact of life. At some point, probably sooner rather than later, a company will find itself eyeing another enterprise-desperately trying to make sense of physical assets, intellectual property, legalities, pay, benefits and culture. “In today’s business environment, mergers and acquisitions are essential. The difficult part is ensuring that you know what you’re getting into upfront,” he states.

Jones, the director of human resources for Steelcase Inc., a Grand Rapids, Michigan, manufacturer of office furniture, speaks from experience. Over the last three years, the company has acquired eight other firms. Some have added manufacturing capability, others have pumped up the Steelcase product line. All have added to the bottom line. Today, Steelcase tallies fiscal 1999 net sales of over $3 billion. It operates 50 manufacturing plants, with over 20,000 employees in 15 countries.

In every instance, human resources was heavily involved in the upfront due diligence. While financial analysts, attorneys and MBAs were scrutinizing details and poring over spreadsheets, Jones and other key individuals in HR were taking a close look at myriad other factors that could make or break the deal. Armed with a checklist, they studied benefits, compensation, pay, OSHA and ERISA records, employee handbooks, HR technology and a whole lot more. “The more you know, the better you can structure the deal,” says Jones.

Unfortunately, Steelcase is an exception rather than the rule. Although most companies that engage in a merger or acquisition take due diligence seriously, human resources is often left out of the loop. Or it’s asked to jump into the fray only after senior management has made an announcement-at which point it’s often too late to provide strategic consulting. “HR has a critical role in due diligence-both from the benefits and compensation side and the cultural side,” explains Deborah Rochelle, a senior merger and acquisition consultant for Watson Wyatt Worldwide. “Successful companies examine leadership models, recruiting, and what makes the organizations different or similar-as well as specific benefits and legal issues.”

Planning makes all the difference.
It’s no simple task. Due diligence can involve long checklists, and combine hard logic with intuition. As Jones puts it: “It’s an ongoing learning process. It’s necessary to constantly tweak and adjust thinking to reflect changing business conditions and greater knowledge about how to conduct due diligence.” Adds Mark N. Clemente, president of Glen Rock, New Jersey-based M&A consulting firm Clemente, Greenspan & Company, and author of the self-published book, Empowering Human Resources in the Merger and Acquisition Process (1999): “Ultimately, many mergers fail because of human resources-related issues, such as culture clash. A company that embarks on a merger or acquisition without early and direct input from HR is living extremely dangerously.”

In fact, the numbers speak volumes. According to Thompson Financial Securities Data, based in Boston, worldwide M&A activity through August 1999 hit nearly $1.6 trillion, a 12.7 percent increase over the same period a year earlier. Meanwhile, various studies have found that a staggering 50 to 75 percent of all merging companies fail to retain their book value two years after stepping to the altar, and many others are torpedoed by ongoing culture clash and an erosion of top talent. “Many CEOs gloss over softer HR issues, including potential cultural problems, only to realize later that they’ve made a huge mistake,” says Mitchell Lee Marks, a San Francisco-based management consultant who has worked on more than 60 mergers over the last 15 years.

Marks, co-author of Joining Forces: Making One Plus One Equal Three in Mergers, Acquisitions and Alliances (Jossey-Bass, 1998), believes that the biggest problem is getting top human resources professionals to plan ahead and provide strategic input. “The most successful companies have HR on the due diligence team, and the most successful HR departments prepare ahead of time by creating checklists, contingency plans and knowing who will handle specific tasks as soon as an announcement is made.”

That’s certainly the situation at Steelcase. Over the years, Jones has created an entire plan of action. When senior management contacts him about a potential acquisition, he has a 30-plus page checklist ready and a team of human resources experts prepared to examine specific factors or data. When he doesn’t have the expertise in-house, he uses outside consultants. Moreover, Jones works closely with the company’s CEO to identify potential takeover targets, and analyze the cultural fit upfront. And when discussions begin, he’s ready to step in and begin interviewing key managers at the other company.

At Cooper Industries, a Houston-based manufacturer of electrical products, tools and hardware with 28,100 employees and $3.6 billion in 1998 sales, M&A activity is a regular part of the picture. The company typically pulls the trigger on 10 to 15 deals a year, acquiring both public and private companies. George Moriarty, assistant director of pension design, typically spends several days poring over records, with the assistance of a detailed checklist. Among other things, he examines day-to-day business costs and looks for potential liability, especially related to retiree medical benefits, severance pay obligations and employment contracts for executives. When the deal involves an overseas acquisition, he often spends hours interviewing senior executives of the targeted firm.

The entire due diligence process usually takes a week to 10 days, though complex deals can require three or four weeks of analysis. Cooper Industries uses anywhere from 7 to 20 people, depending on the complexity of the due diligence. Moriarty is one of three or four HR professionals who focus on different aspects of the deal. He says, “The idea is to understand exactly what you are buying. It’s rare to spot something that kills the deal, but it isn’t uncommon to uncover some information that leads to a re-valuing of the deal.” Moreover, the due diligence can identify personnel who are crucial to the transaction. That allows Cooper Industries to enter long-term contracts with key executives and others, or lower the value of the deal based on the possibility that these individuals might leave for another company.

According to Watson Wyatt’s Rochelle, HR due diligence must encompass people, programs, plans, policies and processes. The financial and legal side of the equation must focus on pay, defined benefits such as 401(k) plans, health insurance, vacation policies, immigration standards and more. These factors usually aren’t enough to derail a deal, but they can affect the pricing and subsequent human resources strategy. “Often, hidden pitfalls and liabilities exist. If a company conducts the proper due diligence, it’s possible to address the issues effectively and avoid many serious problems,” she argues.

In one case, a company found itself saddled with a $1-million expense after the deal closed, simply because it hadn’t bothered to adequately check the other’s firm’s 401(k) plan for government compliance, notes Rochelle. Other companies have discovered, only after the ink is dry on a deal, that the acquired company hasn’t fully complied with EEOC requirements or immigration law. The latter can be extremely serious, resulting in fines and the loss of workers. That makes an I-9 audit essential, according to Katie Shan, an analyst in the Chicago office of labor law firm Baker & McKenzie.

Information uncovered during due diligence can also help an organization devise a highly focused compensation and communications strategy. A 1999 survey conducted by Watson Wyatt found that retention of key talent is a critical concern for 76 percent of companies involved in a merger. Yet because productivity, performance and morale almost always take a nosedive during a merger, the threat of losing the organization’s superstars is very real. Then, instead of realizing the anticipated synergy of uniting two organizations, management finds itself desperately trying to avoid entropy.

To be sure, the business world is littered with the debris of failed human resources strategies during mergers. When one Northern California bank acquired another several years ago, senior management was pleased with the acquisition and thought it had everything on track, says Rochelle. However, eight weeks after the merger took place, the company had lost 75 percent of its key managers. The culprit? “They did not pay attention to how to hold onto the managers. They never considered retention bonuses or other processes that would help ensure positive results,” she states.

Remember the importance of culture.
Financial and legal considerations, however crucial, are only part of the process. Many organizations have discovered-sometimes only after it is too late-that cultural issues can determine whether a deal sizzles or fizzles. According to Marks, many failed mergers aren’t a result of inept management or inadequate due diligence. More often, chronic problems occur because the two organizations haven’t determined whether they have compatible cultures, or how to work out differences if the cultures don’t align. What’s more, senior executives often do not regard cultural differences as important.

Cultural differences can manifest themselves in the way people dress, communicate, use e-mail, make decisions and more. Too often, says Marks, the two companies butt heads and condemn the other’s way of doing business. They might view the other organization as too bureaucratic or simply incompetent. Eventually, one side wins. “Their way is adopted in the combined organization, leaving the other side feeling like losers,” he explains. The irony in all this is that such diversity can benefit the new organization, but only if it is fully harnessed. And that must begin in the due-diligence process.

Although many companies claim that a deal is a “merger of equals,” Rochelle believes the term is a misnomer. “There is no such thing,” she states. “In any acquisition or merger, there always is a dominant company and a subordinate company. One of the organizations will emerge as the one that runs the show, and imposes its culture on the other. However, the most successful companies make concessions and combine the strengths of both companies to develop a new organization.”

Developing a cultural audit tool and detailed checklist can guide organizations through the due diligence process. These allow the organization to evaluate the things that are most important, including what senior management’s vision is for the combined organization, how the leadership styles differ, how executives interpret terms such as “customer satisfaction” and “competitive performance,” and the types of general policies each company has in place. For example, an Internet start-up might allow employees to bring their dogs to work and decorate cubicles, while a more button-down culture might forbid all personal items in a workspace. One organization might discuss matters politely at meetings and online, while another relies on a more combative approach.

Clemente believes that success usually results when HR uses “discreet, measurable and quantifiable analysis that can be combined with the proverbial ‘gut’ feel.” Interviews with senior managers-and a representative sampling of the rank and file-can also help an acquiring company understand the mindset of the other organization. If the takeover is hostile, then third-party interviews and public information, including SEC filings, can prove useful. The end result, he says, should be a “portrait” of the other company and its culture. “Once you have something to benchmark against and take action from, it’s possible to adjust compensation, benefits, communications and other methods to address the specific needs of the deal.”

Take a look at the big picture.
In a worse-case scenario, culture clash can unglue a deal before it’s finalized. However, a more common approach to dealing with cultural incompatibilities is to develop strategies, and ultimately programs, to address cultural integration. That might include signing a long-term employment contract with key executives before the merger is complete or establishing a task force to combine the best practices of both companies.

That’s exactly the tack taken by Abitibi-Price, a Toronto-based paper manufacturer, when it announced a merger with Stone Consolidated of Montreal in early 1997. At the time, CEO Ron Oberlander of Abitibi recognized that industry consolidation was inevitable, and that his firm could benefit by a merger. However, with dozens of potential partners, he felt that he had to ensure a solid culture fit before moving ahead with the deal. For companies that passed his firm’s strategic and financial requirements, cultural fit would be used as the criteria to decide the deal.

Oberlander brought the firm’s senior vice president of HR, Jean Claude Casavant into the process as an internal consultant. After creating an evaluation system dubbed Merging Cultures Evaluation Index (MCEI), they sent a questionnaire to potential suitors, tabulated the results and generated rankings for various firms. That served as the basis for the merger with Stone Consolidated. Despite their presence in cities that speak different languages (English and French), it became clear that the combined organization would produce financial gains and that the cultures could be melded together effectively. Today, the combined entity, Abitibi Consolidated has become the world’s largest newsprint producer, generating over $2.15 billion in sales during 1998.

Like most successful merging companies, Abitibi developed a contingency plan early on. The fact that HR was part of the strategy meant it could examine the deal in total rather than the sum of the parts, says Marks, who coached the CEOs and served as a consultant. “There’s a hard side and soft side to mergers,” he says. “HR has to understand both parts of the equation. It must be proactive and not reactive for [all parties] to succeed.”

A wake-up call? Perhaps. Especially if you consider many companies still don’t use HR effectively during the due-diligence process. Concludes Rochelle: “The merger and acquisition frenzy isn’t likely to abate anytime soon. Regardless of the industry or circumstances, human resources must be prepared to provide the level of due diligence necessary to ensure that a deal can work, and that it is valued fairly. The HR department that is prepared to act can become a strategic participant in the process rather than a spectator.”

American Family Insurance Group, based in Madison, Wisconsin, is in a growth mode. By the end of this year, in fact, the company plans to hire 200 additional insurance agents to service markets in the 13 states in which it currently does business.

With such rapid growth under way, the company needed a quicker, more effective way to train new agents than the expensive, time-consuming classroom-based instruction used in the past. New agent training includes education on complex procedures such as how to determine accurate home-replacement costs and how to identify onsite property hazards. Both activities are vital in the insurance-selling process because they determine the amount of insurance required, and thus, the cost of a policy.

In searching for a more effective training solution, the company turned to computer-based interactive training technology. Working with The Human Element, Inc., a multimedia vendor in Bloomington, Minnesota, American Family spent $30,000 to develop a self-paced training program on CD-ROM that could be mailed to each agent’s office. The first program covers how to conduct replacement cost estimates.

The new program visually walks agents through various types of structures—garages or two-story homes, for example—that are made with different construction materials. The features of each structure that add to the replacement cost are identified by both on-screen display and a narrator’s voice.

How does the program improve training? In the past, when agents were trained to conduct replacement cost estimates, they and their district managers would have to personally visit several different sites to review dwelling types and construction materials, explains Keith Katers, American Family’s project manager for audio, video and multimedia development. “This would sometimes take several days and a lot of the district managers’ valuable time,” he says. Furthermore, because the training relied on the knowledge of individual district managers, it tended to be very inconsistent.

Today, using CD-ROM, agents receive uniform training in just four hours at their own computers and in their own offices. More than just training, however, the disk continues to serve as an online reference whenever agents have questions in preparing a policy estimate. This first project is just one of many multimedia training projects that will be developed around different product lines. “Our vision is to create a library of multimedia programs for training and reference on different insurance products,” says Katers.

In developing the program, American Family relied on an internal committee of representatives from marketing, media, information systems and underwriting. Surprisingly, no trainers were involved in the effort. “Our trainers are only responsible for training internal employees,” Katers explains. “Marketing is responsible for developing the agents.”

What advice does he have for other companies considering the use of technology-based training? “Work with an experienced vendor,” he says. “Even though we have a wealth of in-house experience in traditional media project management, we had no experience with this new technology. Outside vendors have been through the process before. They know the pitfalls and hazards to avoid.”

It’s no small irony that the advent of employee self-service has left many workers feeling frustrated, even annoyed. At many companies, it’s no longer possible to saunter into the human resources department, pull up a chair and casually discuss various benefit options or retirement plans. Instead, employees are forced to confront an interactive voice response system that makes them punch a seemingly endless sequence of buttons on the telephone to get answers. Or they must turn to an intranet that forces them to ferret out their own information using a PC or kiosk.

Whether employees like it or not, self-service is here to stay. For companies, the cost savings and efficiency gains are simply too great to ignore. But what benefits the enterprise doesn’t always benefit employees. As anyone who’s participated in open enrollment or sorted through a 401(k) plan knows, making a selection isn’t always a simple button-pushing proposition. “Self-service can’t replace all human contact. No matter how sophisticated or well designed a system is, people are needed to answer questions and provide guidance,” explains David Link, a practice director for The Hunter Group, a Baltimore-based information management consulting firm.

Increasingly, those answers are coming from specialists working in call centers. By funneling phone calls to representatives armed with the appropriate information, it’s possible to adopt employee self-service as a corporate strategy, but also offer human assistance, when necessary. Today, computer telephony integration (CTI) can create a seamless and efficient way to provide accurate information, track cases, spot problems and provide a higher level of service. It can replace tedious manual processes with a high level of automation.

In fact, in recent years, call center technology has matured into a highly sophisticated solution. An employee using a telephone-based interactive voice response (IVR) system can punch in a Social Security number or employee number, and an accompanying CTI system can route the call to an appropriate rep, which might include a third-party provider such as a pension administrator or insurance company. Once the representative picks up the call, it’s possible to automatically view the person’s account, case history and other relevant data—all without touching the keyboard.

At its most advanced level, it’s possible to integrate phone calls, faxes, e-mail and Web access so that a representative can view the same material as a person sitting in his or her living room or at a desk. Some call centers also allow users to browse a Web site, and if a question arises, click a button on their browser. At that point, a rep calls back using a standard telephone—with more advanced capabilities, he or she can tap into videoconferencing or IP telephony—and discuss the matter with the caller while viewing the same screen.

“Call centers solve a specific business problem for human resources and the entire enterprise,” says Jim Holincheck, an analyst for Giga Information Group, a market research firm headquartered in Norwell, Massachusetts. “They help people obtain information that isn’t easily available through phone- and Web-based systems. What companies have come to realize is that the same techniques that are used for external customer service can benefit HR. A call center is an efficient way to fill requests for information in a large and decentralized environment.”

Of course, putting together all the pieces is no simple task. Call centers require computer systems, telephone switching equipment, and various types of software. These systems capture data about each call—including numbers keyed into the IVR, hold times, transfers to various extensions, agent IDs and other information relating to the call or customer—by interfacing with CTI middleware or directly to an automatic call distributor (ACD) switch or legacy equipment.

However, when it’s done right, the benefits can be enormous. Many companies not only cut administrative costs by creating a more efficient way to distribute information, but they also improve the overall quality of service. Instead of workers having to make an appointment with a person in the human resources department, they can call the system at their convenience. Tapping into relevant data, the call center rep can provide personalized information immediately. And if additional information is required, it’s possible to use workflow systems to route the request to the appropriate person.

“It’s important to think of the HR call center as a key component in an overall human resources strategy. It communicates the organization’s philosophy, mission and image as much as any other employee-communication vehicle,” says Kevin Dobbs, director of the employee relationship management group at Edify Corp., a Santa Clara, California, firm that sells self-service software that can tie into call centers. Adds Jim Spoor, president of SPECTRUM Human Resource Systems Corp., in Denver: “It’s important to pay particular attention to technology, business strategy and culture when building a call center.”

Call centers connect people with knowledge.
Designing a call center is a complex task, even for the most IT-savvy organization. Part of the problem is that a call center relies on various layers of technology—all of which must fit together like pieces of a puzzle. And, as Shirley Pantelleria, director of the employee services center at Whirlpool Corp. in Benton Harbor, Michigan, puts it: “You have to consider all the various components together when making a decision. Everything is interrelated, and how the systems work together affects performance and capabilities.”

Whirlpool began building its call center in February 1997. The facility went operational in September of the same year, with nine reps fielding calls from 21,000 U.S. employees and 7,000 retirees. When employees dial into the TALX Corp. IVR, they can handle benefits enrollment by punching the buttons on their phones—using a Social Security number as the identifier. If the individual requires the assistance of an agent, he or she pushes a button and connects within seconds.

A CTI screen pop automatically identifies the caller and populates the screen with data from a PeopleSoft HRMS and the IVR. The system also can identify where an employee is calling from. At that point, the call center rep can help guide the employee through the decision-making process. The information base that supplies reps with the details on policies and procedures is stored on the company’s intranet site. Agents can conduct keyword searches to find the information they need.

At Whirlpool, 65 percent of the company’s employee base taps into the self-service capabilities of the IVR. About 35 percent of those employees opt to speak to a live associate. That translates into call center reps handling more than 34,000 inquiries a year. “The idea was to create a self-service system people would want to use, but if they needed a rep they could easily get to one and have the call handled quickly and efficiently,” says Pantelleria.

The Whirlpool call center runs off a Lucent ACD, an IBM mainframe computer and a DB2 database. At present, the TALX front end provides interactive phone capability, including speech recognition that allows employees to spell their names and input other information verbally. However, Web-based capabilities are on the horizon, Pantelleria notes. The Web component will be accessible from desktops as well as kiosks positioned in factories.

Increasingly, employee self-service and call centers are part of a tightly integrated strategy: Supply individuals with the information to conduct transactions on their own, but provide help when it’s needed. “It’s important to realize that you’re forcing people to do things differently when you implement employee self-service. To gain a higher level of acceptance, it’s a good idea to have a call center in place to address questions, problems and concerns,” says Holincheck.

According to Link, call centers usually rely on three technological components—all dependent on each other. First, there’s the underlying call center server, which routes calls to the proper location and representative. Using ACD, the system can capture revealing data about each call, including hold times, the number of transfers that take place for callers, and the time spent by agents handling various problems. It’s also possible to generate detailed statistics and reports that can be used to create more efficient staffing and information delivery models.

Case management software also provides some muscle. It allows any service center agent to track a caller’s history by viewing a composite file that contains records of employment status and classification, previous benefits choices and selections, and past discussions, among other things. With IVR and CTI capabilities, it’s possible to populate the rep’s computer screen with relevant data from various sources, including the ERP or HRMS, as soon as the call comes in. That saves time and allows the rep to “manage the relationship rather than the transactions,” says Link.

Call centers can reduce legal exposure.
The capabilities of the software are growing all the time. Some programs now allow a rep to consolidate an array of tasks right on the desktop, including Web, e-mail, faxes and paper correspondence. The HR department can access information quickly and provide better service, but it also can ensure legal compliance. By documenting dates, the exact information the rep provided and a suggested course of action, it’s possible to reduce exposure to lawsuits, says Link. Equally important, it’s possible for reps to provide far more consistent information.

The third part of the equation is knowledge-base software, which lets agents search out needed information—usually with keyword searches. The most sophisticated of these programs can reflect policy changes throughout the entire organization on the fly—and bridge the self-service and call center systems. “It adds intelligence to the update process. It eliminates errors due to reps receiving and giving out-of-date information,” Link explains.

In fact, the capabilities of the software are growing rapidly. Some systems, such as Foundation Technologies’ Beneflex, allow an HR department to dynamically publish information so that it can be used in a general way or customized to a single employee, if necessary. It uses a Windows NT server to connect to PC or legacy databases distributed throughout the organization. “That makes it possible to quickly extract accurate information based on life events, employment history, date of hire and an array of other factors,” states Tod Loofbourrow, president and CEO of the Waltham, Massachusetts, company. Moreover, when HR adds or changes information, “it’s updated throughout the knowledge base,” he notes.

Giga Information Group’s Holincheck emphasizes the importance of tying together various components. “Although the idea is to funnel employees through the self-service component, the questions and issues that can’t be resolved by the employee must be routed to a call center. If a rep in the call center can’t resolve the problem, it needs to be routed to a manager. In order to ensure that a system works, it’s necessary to use routing and workflow effectively.” And since there’s no shrink-wrapped solution that can fully run a call center, “a company has to glue together its own solutions from various products in all the different categories,” he says.

A call center presents challenges, but offers rewards.
Ken Millen understands the complexity of building a call center. In 1998, as director of HR services at Hoffman Estates, Illinois-based Sears, Roebuck & Co., he helped the retailing giant introduce an HR call center that now handles benefits selection and 401(k) administration. Using Sun Unix servers, a Siemens ACD, PeopleSoft HRMS, Edify self-service software, Quintus’ case management software, and Foundation Technologies’ Beneflex knowledge-base software, Sears is able to answer questions for more than 325,000 current and former employees in more than 4,000 locations. Altogether, the call center uses 60 customer service reps to handle approximately 1 million calls a year.

When employees dial into the IVR, they push the buttons on their telephones to make selections from within the Edify self-service component. If they have questions or need clarification, they can connect to a live representative in the call center. Using a screen pop, the system automatically pulls the employee’s record from the PeopleSoft database while populating the rep’s computer screen with his or her case history. In a separate window, the call center agent checks the Beneflex knowledge-base. All this has replaced manuals, loose pieces of paper and sticky notes.

“It’s a model for far more efficient delivery of information,” says Millen. And he has the numbers to back him up. Sears forked over about $500,000 to assemble the technology for the call center, but expects to realize about $2.2 million in savings over the first four years—mostly by reducing staffing requirements within human resources. In addition, the system is helping reduce transactional overhead—something that creates gains for both the company and the employees.

It’s important to get beyond the company line.
Call centers aren’t for every organization. They work best, says Link, when a firm has 10,000 or more employees. Below that number, the high cost of a call center can make it a frightening proposition. The various pieces of hardware and software required to build a call center can easily slide past $1 million. The largest call centers can cost double or triple that amount—though many companies achieve a return on investment within 12 to 24 months.

But all this doesn’t mean that small- to medium-sized companies are shut out. The same concepts—and some of the same equipment—can be used to drive improvement at virtually any company. Using a hotline, contact management software and an employee manual residing on the intranet, HR reps can find information quickly, even without CTI. Callers will no longer find themselves explaining their situation over and over again to a seemingly endless succession of reps who have no way of tracking the history of the case.

Not surprisingly, the next generation of call centers promises to usher in further gains—featuring live chat, videoconferencing and Internet telephony. The latter option offers a direct phone connection through computer systems, without the added hassle of picking up a standard telephone. What’s more, multimedia customer interaction will usher in an era of streaming video, audio and remote presentations managed by a rep in a call center. For example, New York City-based Sitebridge Corp. has developed software that lets an agent show a customer PowerPoint® slides, an animated product demo, or virtually any other file directly through a Web browser. The program, Customer Now 2.0, also makes collaborative Web browsing possible.

Impressive capabilities, to be sure. Yet Link maintains that developing an HR call center isn’t as daunting a task as it may initially seem. For one thing, advanced capabilities shouldn’t be the top priority. For another, human resources can often borrow on the expertise and experience of other departments that have already built call centers—including marketing, sales and customer service. In some cases, it’s also possible to use technology that those departments have outgrown. “It isn’t necessary to reinvent the wheel,” he says.

Ultimately, call centers are changing the structure of the human resources department. “Just as the ATM brought 24-hour convenience to banking, call centers are bringing greater convenience and flexibility to human resources,” states Loofbourrow. “Many HR departments that implement a call center to complement employee self-service are seeing their costs decline and their customer service ratings jump. The goal is to use self-service technology to reduce transactions, but have live agents available to solve real world problems. That’s the best of both worlds.

Building a call center requires a tightly focused strategy. In the end, it’s one part technology, one part cultural change—always with the focus on improving customer service. By resolving each transaction as efficiently as possible, and providing convenience for workers, it’s possible for everyone to come out ahead. Here’s how to build the framework for an effective call center.

Does a call center make sense for your organization?
A call center isn’t appropriate for every HR department at every company. Organizations with more than 10,000 employees benefit the most, although a call center—or at least the same communication model—can prove beneficial for medium and small companies.

Determine what functions are best supported by a call center—and what’s needed for a particular organization. In most cases, flexible benefits enrollment, payroll, and pension and 401(k) administration top the list. “It’s usually best to roll out various capabilities over a period of time,” says David Link, a practice director for The Hunter Group, a Baltimore-based information management consulting firm.

Examine your current computing and telephony environment to understand your equipment needs.
Call centers almost always require connections between various computer systems—sometimes across platforms and operating systems. At many large companies, mainframes, Unix and NT servers must interact in order to make CTI, ACD and IVR a reality.

Seamless database integration also is a necessity. The hardware and software a company uses affects what call center tools, products and functionality it can use to solve specific business challenges. For example, when Benton Harbor, Michigan-based Whirlpool Corp.’s HR team began assembling an HR call center and implementing benefits administration in February 1997, it originally leaned toward purchasing a Lucent interactive voice response system to run off an existing Lucent automatic call distribution system.

Although the package offered a price advantage over other products on the market, Whirlpool’s HR people opted to use a TALX IVR. “We paid more money for the system, but we had the specific tools and a complementary PeopleSoft system already in place,” explains Shirley Pantelleria, director of the employee services center.

Don’t overbuild.
“Sometimes people look at a call center solution as a complex equation, when all that’s needed is a simple hotline,” says Jim Spoor, president and CEO of SPECTRUM Human Resources Corp., an HRMS vendor based in Denver.

Indeed, large corporations with geographically dispersed workers benefit the most from a call center. Many find they can cut administrative costs by 20 to 40 percent while boosting customer satisfaction. But it’s often not necessary to build a state-of-the-art facility—particularly for medium and small firms. “The key,” says Spoor, “is connecting the technology with the organizational needs.”

Design the call center to complement employee self-service.
Today’s technology makes it easy for an individual to update information and process transactions by calling into an IVR or logging on to an intranet. “A customer service or call center representative isn’t needed to handle the vast majority of transactions,” explains Tod Loofbourrow, president and CEO of Foundation Technologies, a Waltham, Massachusetts, producer of software for call centers. In fact, guiding employees toward self-service rather than human interaction can slash administrative overhead and labor costs.

But self-service can’t replace human interaction for specific problems and concerns—at least not in its current iteration. When things get fouled up or seem too confusing, workers want to push a button and get an answer from a living, breathing person. Moreover, many workers simply won’t use IVR or Web-based self-service tools.

“Self-service and HR call centers should be closely tied together,” explains Ken Millen, director of HR Services at Hoffman Estates, Illinois-based Sears, Roebuck & Co. Adds SPECTRUM’s Spoor: “It’s important to use a call center to add value. Today, a live person isn’t needed to tell someone how many vacation days they have available or what their balance is in their 401(k). However, a person is needed to explain and evaluate complex eligibility requirements.”

Focus on solutions rather than technology.
You’ve heard it before, but it bears repeating: Technology is simply an enabler. Vendors constantly tout features and capabilities, but when the dust settles, it’s how a company plans to use a call center that should determine what it purchases. “It’s important to understand how various products interact,” says Link. “To achieve maximum results, you have to focus on the business issue and what combination of products and features offer the most effective solution.”

Offer an IVR front end, but also consider Web-based capabilities.
Interactive voice response is an essential part of call center technology. Individuals can use the phone to conduct self-service transactions, but then connect to an appropriate call center representative by pushing a button. However, while the telephone is ubiquitous and easy to use, it’s relatively slow at navigating through long, branching menus.

The solution? A Web-based self-service system that’s linked to a call center. Although relatively few firms are now using this technology, it promises to become widespread within a couple of years. And the reason is simple: An individual can browse a Web site, look up information, update records and place transactions.

If the person runs into a problem or has a question that can’t be answered at the Web site, he or she can click a button and connect to a call center rep within seconds. The agent, using a screen pop, can view the same Web page in one window, check a knowledge-base in another, and communicate with the person via videoconferencing or IP telephony.

Market the call center and educate employees how to use it effectively.
To succeed with the two-pronged strategy of using employee self-service and call centers, it’s essential that workers know what’s in it for them and how to use the tools to maximum advantage. By touting new capabilities, features and time-saving options, large-scale acceptance of IVR and Web self-service is far more likely.

But getting employees to understand that the call center is designed to solve problems—and isn’t the most efficient way to check a 401(k) balance—requires ongoing communication. Newsletters, an intranet, or even a recording on an IVR can help guide employees through the process.

At Whirlpool, for example, HR originally sent out a newsletter every two weeks to keep employees up-to-date about new features and changes to the system. The department now sends out a quarterly newsletter. “It’s a change management issue as much as a technology issue,” says Pantelleria.

And while migrating away from face-to-face interaction isn’t easy, it can ultimately carve out huge gains for the organization. Among other things, it’s possible to reduce staffing requirements in the call center or human resources department, eliminate paperwork and transactions, and free HR staff or call center reps to engage in higher-value work.

Use specialized tools to operate the call center at maximum efficiency.
It’s possible to track call volumes, abandonment rate, calls in queue, agent status and other factors. Using such data, it’s then possible to analyze calling patterns and deploy resources as needed. Some programs, such as NovaMAX Manpower Scheduler from Nova CTI, can forecast demand and build work schedules automatically using specialized algorithms. It can schedule according to needed skills, seniority, season and other categories.

View the call center and self-service as constantly evolving tools.
It’s no bulletin that the technology that supports call centers is changing rapidly. “A call center is a constantly evolving project. You are continuously improving, coming up with new measures, surveying, and then going back to workers to communicate what is available and what has changed,” remarks Pantelleria. “You must constantly find ways to improve. That’s the nature of business today.”

Here are terms that recently turned up in the realm of HRMSsoftware.

Business intelligence:
A group of software tools that provides a range of analytical capabilities, from advanced reporting to sophisticated analysis using complex algorithms.

Datamart:
A specialized repository of data, often fed from a enterprise-wide data warehouse. Specific departments or functions such as HR, finance or sales typically use it.

Data mining:
A group of analytical applications that search for patterns in a database.

Data warehouse:
A large database designed to support decision making in organizations. A data warehouse is typically batch-updated and structured for rapid online queries and managerial summaries.

Metadata:
A summary of data that exists in a data warehouse. Metadata provides the user with a directory to locate the contents of the data warehouse.

OLAP (Online Analytical Processing):
Software for manipulating multidimensional data from a variety of sources that have been stored in a data warehouse. The software can create various views and representations of the data.

DSS (Decision Support Systems):
Interactive computer-based systems which help decision makers utilize data and models to identify and solve problems.

EIS (Executive Information Systems):
A system that provides specific decision aiding and/or analysis capabilities.

In the late 1980s, Benton Harbor, Michigan-based Whirlpool Corp. began to seriously assess itself and the increasingly competitive appliance industry. The longtime maker of home appliances realized that to strengthen its position as a dominant player in the industry—and expand into European and Latin American markets—it would require an unwavering focus on customers, as well as a commitment to become the best-cost, best-quality producer in the marketplace.

To carry out its goals, Whirlpool’s management knew that the company needed to forge a higher level of commitment and dedication from employees, especially those working in the company’s plants and factories. So it opted to institute a performance-based compensation system for employees at its Clyde, Ohio, automatic washer manufacturing plant. Several other facilities were later added, and the company has never looked back.

The gain-sharing program—with its self-directed teams—slashed $36.4 million in costs the first two years alone. In 1992, two of the company’s plants managed to cut $800,000 in utility costs. And if one examines quality-control issues, it’s clear that employees are making a commitment to quality that couldn’t have been imagined a few short years ago. There now are 98% fewer quality problems than five years ago, and the service rate on dishwashers and other appliances has been reduced 60% to 80%.

The cornerstone of the program is an HR approach that provides workers, especially those on the line, with the incentives and motivation to treat their work as if they’re an owner of the company. Whirlpool places the money from all cost savings, business improvements and productivity gains into a fund for each specific facility, and workers receive a quarterly cash payout for their efforts. In some cases, that has translated into more than $2,500 a year per employee.

Of course, the company also gets a slice of the pie. And that can be significant. The total cost savings during the first two years for the company’s facilities in Clyde, Marion and Findlay, Ohio, measured $36.4 million—with payouts of $19.2 million. Says T.R. Reid, Whirlpool’s manager of financial communications: “It’s a program that benefits everybody. It has led to fundamental changes in the way top executives and hourly employees think about work and their job.”

Indeed, employees are more knowledgeable, there’s greater cooperation and involvement, and financial and quality-control benchmarks have reached all-time highs. And because hourly and salaried employees share equally in the gains, the program has helped narrow the culture gap between the two groups. Meanwhile, for the corporation, payouts have alleviated pressure for base-wage increases (however, the company maintains a philosophy that gain-sharing never should replace wages) and the program has led to greater profitability. In short, the program’s been an unqualified success.

Says Reid: “You see managers and line workers doing things they wouldn’t have considered just a few years ago. If an inexpensive plastic part fell on the floor before, for example, it would get thrown away. Today, somebody picks it up and makes sure it gets used again. If there’s a machine that needs to be fixed, people step in and do it.”

Today’s workplace is a lot like Charles Dickens’ novel, A Tale of Two Cities: It’s the best of times and the worst of times. On one hand, technology offers us the promise of a more efficient workplace — one in which administrative noise is eliminated and strategic thinking flourishes. On the other hand, consultants, vendors and industry technophiles almost never realize the utopian vision of perfect software and systems. For every company that taps into the full power of technology, a dozen others find themselves short-circuited. They wind up realizing only incremental gains, rather than significant advances.

The whole situation is downright maddening. And it always begins predictably enough. You hear about a new product or capability that promises to transform human resources into a far more efficient operation. You check out a variety of vendors, solicit bids and bring a team of consultants into your department. Finally, when you’re comfortable you’ve made the right choice, you fork over tens of thousands of dollars, or maybe hundreds of thousands of dollars, to your friendly HRMS vendor.

As you fire up the system for the first time and watch the consultant show off its capabilities, you can already see yourself winning a company-sponsored award and taking a giant step up the company ladder. It’s a wonderful time to be an HR manager, you think. And then you unleash the technology on the workforce, only to watch in wide-eyed wonder as the sleek new system chokes on a steady stream of errors, mistakes and mishaps.

The next few months are a chamber of horrors that exceed even an IRS audit or a bout with food poisoning. You spend countless hours and untold training sessions trying to get employees up to speed. You pull your hair out trying to eliminate mistakes.

One employee after another complains that the new system is difficult to use and unwieldy. By now, you’re way past the screaming-and-cursing stage. You’ve been reduced to utter despair. You ask yourself, “How can a system that offers so many capabilities become the source of so much resistance? Why are workers rejecting technology that can revolutionize the department and make their lives easier?”

Welcome to the technology paradox. If man possesses one quality that’s enough to cause a certifiable migraine, it’s his ability to invent new things that always exceed his capacity to use them effectively. It’s no bulletin that most of us find it impossible to keep up with all the technological change rocketing through our world. We spend months learning a new software program, finally get a handle on it, then find ourselves greeted with an upgrade offering new and improved features. Once again, we must retrain our brain. We hear about the virtues of intranets, struggle to learn the various functions and capabilities, and then boot the computer one day, only to view a completely redesigned interface.

Learn how to embrace new technology.
Unfortunately, the problem isn’t going away anytime soon. The question is how can an organization embrace new technological solutions, yet maintain a high level of productivity?

Multimedia and Internet Training Newsletter estimates industry spends $55 billion a year on all employee training. That’s a hefty wad of bills. And while the figure doesn’t specifically address the issue of software and computers, it’s obvious that most of us rely on a computer to do our work — whether it’s a dedicated device on the factory floor or a PC sitting on our desktop. Despite trainers descending on the workplace like a swarm of locusts, workers continue to struggle.

If it isn’t for the lack of money and effort spent on training, then what exactly is the answer? First, and perhaps most importantly, it’s crucial to recognize that a corporate culture that embraces change and encourages employees to grow and learn has a better shot at success. Simply offering classes on how to use Microsoft Excel or click a mouse on intranet hyperlinks doesn’t hack it.

As Mark Koskiniemi, vice president of human resources for Buckman Laboratories, explains: “Corporate learning involves more than content, classrooms and instructors. It’s a philosophy that must become embedded in the organization’s culture.”

If any company embodies the learning organization, it’s Buckman Laboratories, a Memphis, Tennessee-based specialty chemical manufacturer that has realized enormous gains through such tools as distance learning and knowledge management. When Buckman hires a new employee, that person quickly discovers that ongoing learning and change are inexorably tied to their jobs and the future of the company. Creating a knowledge-based organization and maintaining skill levels, Koskiniemi says, is an issue that’s 90 percent cultural.

However, cultural changes don’t happen in a vacuum. It’s almost always necessary to create incentives for employees to learn and change. People have to be rewarded — though not always financially — for completing courses and mastering skills. They have to see a payoff for themselves, as well as the company.

Simply telling them that a new program or system will pay dividends for their department isn’t enough. Many workers, and even some managers, are less concerned with how strategic HR is and how much money it can save than getting through their day, month and life with minimal hassles and roadblocks.

Technology used correctly can liberate workers.
Of course, if you’re going to sell workers on the promise of the technology, you darn well better deliver. As Glen Marianko, chief technologist for Progressive Strategies Inc., a New York City-based market research and consulting firm, explains: “If management doesn’t know exactly what it wants to do with its systems, and if it doesn’t have a well-structured plan, problems and failures will begin to occur. When that happens, employees begin to feel a lot of pain and things begin to break down.”

However, when it’s done right, technology can liberate workers from the drudgery of administrative overhead. It can spur them toward more creative and innovative solutions. Suddenly, they can see the advantages of the system and take it upon themselves to learn how to use it more effectively.

Philosophically, that’s in sharp contrast to the conventional wisdom of providing training and letting that drive the learning process. While it’s indisputable that people need to comprehend the dizzying array of features that litter a typical program, that in itself does nothing to change the corporate mindset. In fact, organizations that take this approach sometimes find that the disconnection between using and understanding widens until the company is filled with employees who dutifully sit in classes and learn how to click icons with a high degree of accuracy, but still cannot use the technology to any strategic advantage.

A factor that further complicates this equation is that most systems are far too difficult to use — even for a person who has years of experience using a computer.

Various studies show that between 80 percent and 90 percent of the features in a typical program never see the light of the computer monitor. While software engineers and programmers are busy stuffing capabilities into a system so that it can work for any company or person in the charted universe, they forget that simple and streamlined is often better. Unfortunately, HRIS professionals and executives get caught up in the marketing hoopla and buy a product based on the possibilities, rather than the actual capabilities at their firm. Then it’s up to workers to live with the consequences.

Like many challenges facing HR and the larger corporate universe, the problem isn’t solved through training slogans, two-hour Excel classes, ongoing rhetoric and assorted quick-fix solutions. When an organization creates an effective technology plan, links systems and resources so that people can do their jobs better, and develops a culture that embraces change as a strategic advantage, resistance fades and the true revolution begins.

Workforce, December 1998, Vol. 77, No. 12, pp.124-126.