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.”
UltiPro
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:
- Electronic “portal-like” bulletin
board
- Central-source links to healthcare providers and
training courses
- Employee access to HR and pay information
via the Web
- Ability to demonstrate total employee compensation
- Immediate access to HR information
- Ability to make instant changes to benefits choices and
personal information
- Online benefits enrollment
“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."
SymphonyHR
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.
LifeWorks Online
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:
- Child care
- Elder care
- College locators
- Budgeting and financial planning calculators
- Moderated chats
- Screened bulletin boards
- Web-based training programs
- Interactive stress management programs
More than 3,000 pages of practical life articles
PayCheckCity.com
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.
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Reprinted from the March 2002 issue of PAYTECH,
© 2002, American Payroll Association, San Antonio, TX, all rights
reserved.
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