ESS Lets You Do More With Less
How Employee Self-Service Can Enhance Your Payroll and HR Functions
By Monty Montgomery
As technology reinvents business practices, Web-enabled Employee Self-Service (ESS) systems are helping companies reduce human resource (HR) costs, improve productivity, and attract and retain qualified employees. ESS automates manual HR functions, such as payroll, recruiting, new hire processing, benefits management, and other time consuming tasks. Employees can view their information at home or at work over the Internet or a company Intranet, and can modify it at their convenience. Therefore, convenience is a driving force behind the popularity of ESS.
ESS in HR and Payroll
Over the last few years, companies have begun to recognize the benefits of ESS for accomplishing routine tasks. In today’s volatile business climate, payroll and HR departments are being asked to do more with less. Implementing ESS is one way to achieve that goal and provide real value to employees because ESS is an effective and low-cost way to make HR services available to employees. According to a recent Towers Perrin report, employers adopted Web-based employee self-service systems in record numbers during 2000, increasing two to threefold between 1999 and 2000. The newfound interest in ESS reflects a realization among businesses that self-service technology can benefit payroll and human resources departments in a number of ways. “ESS transforms the relationship between employees and the HR and payroll departments by making administrative processes disappear,” says David Stein, Sr. Vice President of Workbrain, Inc. “Allowing employees to initiate frequent workplace activities such as time entry, vacation requests, and benefits information requests frees up HR and payroll from administering the tasks. This enables these departments to become increasingly strategic for success and a competitive advantage.” Web-based ESS installations gained momentum in large organizations throughout the late 1990s as companies sought to reduce costs and improve service to employees, according to the Best Software, Inc. white paper, “Developing a Winning eHR Strategy With Employee Self-Service.” By streamlining administrative functions through automation, HR can better define its overall contribution to company initiatives. Among its many benefits, ESS can help to attract, develop, and retain top employees; reduce transaction costs; and improve HR and management productivity. The paper went on to say that ESS is being adopted more readily by small and mid-sized businesses as implementation costs decrease and complexity diminishes. E-mail and Internet access, two key elements of a successful ESS system, continue to increase among small and mid-sized organizations, with over 85% reporting e-mail capability and a more than 60% deployment rate for Internet access and corporate Intranets. Statistics from the Cedar 2001 Human Resources Self-Service Survey corroborate the growing presence of ESS in a variety of business settings. Based on responses from 304 organizations with over 500 employees, the survey indicates a continuing increase in Web-based functionalities. And while the implementation rate of Web-based self-service solutions slowed in 2001—most likely due to the distressed economy and the failure of many dot-coms—the trend is still clearly in an upward direction. Underscoring that fact, the survey reported that expenditures for Web-based solutions in 2001 were 13% higher than in 2000.
Why Use ESS?
Characteristics of Web-based self-service such as 24/7 access are an added plus for companies that provide services to a diverse and often dispersed workforce. Moreover, the value and experience that employees gain from this interaction will pave the way for additional self-service options. “ESS functionality can open new avenues of communication for employees,” said Kathleen Cullen, CPP, PHR, Marketing Coordinator at Infinium Advantage. “Links can be created to other sites on the company intranet or the Web. Company procedural manuals, employee handbooks, health insurance benefit handbooks, plus other important company information can be made readily available to employees anywhere at any time via the company Intranet.”
Feature-Laden ESS Systems
ESS systems can offer an array of features that meet the needs of a specific organization or industry. Many functions, though, are similar from one product to another. Following are some of the features found on current ESS systems:
Access to personal information. One popular form of self-service allows employees to view and edit their personal information and elections via the Internet or company Intranet. Companies can give their employees permission to review and make changes to their personal data (name, address, etc.), W-4 elections, and voluntary deductions, as well as view their payroll stubs and W-2s. When a change is made, an e-mail alert automatically notifies the payroll department, significantly speeding up the process and reducing errors.
Electronic time sheets. Electronic time sheets can dramatically improve the payroll efficiency of employees who use computers, and they are especially useful for companies with multiple worksites. These fast-growing companies often have a widely distributed sales force, employees who telecommute, or contract workers on location at other companies. With electronic time sheets, employees enter their hours and worksite (if applicable) according to company-defined categories. Then, they forward the sheet electronically to their supervisor who can approve it online. Some systems automatically generate e-mail notifications when time sheets are approved. Electronic time sheets improve accuracy and, according to some reports, can cut handling time by 50% to 75%. The 2001 Cedar HR Self-Service Survey found that over 35% of respondents already provide online time-sheets and more than 60% plan to implement self-service for this function.
Savings from Web-based services. Self-service programs can be executed over the Internet or a company Intranet. Internet-based payroll solutions, for example, facilitate cost savings by allowing companies to reduce the IT resources needed to support the payroll function. A Web-based payroll solution eliminates the need to purchase and maintain specialized hardware, thereby eliminating maintenance costs and assuring that the latest features are available to all employees. Additionally, ESS can “save time and dollars associated with updating materials for employees,” says Jim Kizilewicz, Vice President of Marketing at Kronos. “For example, updating the employee handbook and circulating those updates is done online instead of on paper. It improves process efficiencies because changes can be made on the fly and circulated to a wide audience, rather than having to issue a paper memo through interoffice mail.”
Decision tool. Self-service has great potential to support the decision-making process by allowing employees to perform “what if” scenarios to test decisions before implementing them. Employees can be given access to tools to try out various strategies for insurance coverage, benefits contributions, and other financial planning, which eliminate the need to request the information from HR or payroll.
Employee Self-Service Options Abound
Numerous self-service products are available to streamline HR and payroll functions. Following are descriptions of a few of them:
ESP Payroll WorkCenter
ProBusiness offers an Employee Services Portal (ESP) that puts control in the hands of employees with self-directed administration services. Some of the product’s features include up to three years of pay history, viewing and printing capability for W-2 forms, changing direct deposit designations, verifying paid time off balances, and viewing company pay dates and holidays.
“By giving employees round-the-clock direct access to their information it empowers the individual employee and at the same time frees up the payroll staff to focus on more strategic activities,” explained Brian Jaffe, Sr. Vice President of Marketing at ProBusiness. “The feedback we’re getting from our customers is that it’s a win/win both for the employees and for payroll administrators since it streamlines the process of updating employee records, which results in better accuracy.”
The UltiPro® solution from Ultimate Software is a comprehensive payroll and HR self-service system that delivers functionality to employees in all roles across an enterprise. UltiPro offers the following features:
“At Ultimate Software, we believe that self-service should be the cornerstone of a larger portal strategy for business,” said Laura Perkins, Vice President of Product Strategy at Ultimate Software. “A good self-service or portal [solution] can provide business value for all types of employees, including payroll and HR administrators, supervisors, managers, and executives."
Empagio, an Employee Resource Company (ERC), delivers an integrated suite of Web-based HR, payroll, benefits management, and employee/manager self-services through its SymphonyHR™ product. SymphonyHR has five functional components:
Employee Portal—allows employees to view and manage certain types of information, such as benefit preferences, in a secure environment.
Human Resources Administration—a global repository for basic HR data, including demographics, status, compensation, skills, and training.
Payroll Administration—provides a comprehensive range of payroll functions and keeps track of changing tax legislation.
Benefits Administration—maintains participant information; keeps track of benefits plans; performs cost plan analysis, budgetary projections, and outside carrier reports.
Benefits Open Enrollment—gives employees the ability to check available benefit plan information and make enroll-ment changes.
Ceridian’s LifeWorks® Online is a Web-based workplace effectiveness tool that enhances a company’s HR services by making information and resources about important life issues readily available to employees. Key features of the system include:
More than 3,000 pages of practical life articles
Developed by Symmetry Software, PayCheckCity.com is a Web-based payroll calculator available to anyone in the U.S. who receives or prepares a paycheck. “‘What-if’ scenarios are the bane of most payroll departments,” said Symmetry’s Jon Bohnert. “With paycheck calculators, companies can refer employees to a _set of online paycheck tools to let them do their own ‘what-ifs,’ and ultimately refer them to an online wizard for _W-4 processing.”
The site offers ten calculators that can be co-branded for a company intranet. These calculators are designed to match the look and feel of the employer’s Web site, and are updated whenever there is a change to any withholding calculation. “Virtually every community in America has employees whose paychecks have had withholding computed by a Symmetry tax table,” said Bohnert. Companies currently using PayCheck_City.com include Bristol-Myers Squibb, Guardian Life Insurance, Intel, and the University of Minnesota.
Here to Stay
When properly implemented, ESS solutions are a win/win proposition for employees and employers alike. Employees appreciate the convenience and ability to control personal data, which can ultimately affect performance and retention. Within the payroll department, self-service eliminates paper shuffling and removes tasks that can be handled more efficiently by others. Finally, storing information electronically is cheaper than filing paper documents in cabinets.
As the technology becomes more affordable and the number of self-service features increases, ESS solutions will find greater acceptance in the business world. Whatever system you choose to streamline your business, ESS is here to stay.
Monty Montgomery is Editor of Membership Publications in APA’s San Antonio, TX office.
Reprinted from the March 2002 issue of PAYTECH,
© 2002, American Payroll Association, San Antonio, TX, all rights reserved.
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