VideoExpectations Gap
Despite numerous successes and rosy predictions of growth, however, E-HR is not without problems. For one, getting these systems installed and working can be complicated, time-consuming, and expensive. Most of the deployments cited here, while having originated from one to three years ago, are still under way — although in fairness, this is often because their value in one area has prompted companies to extend them.
One issue is that any new HR software system has to work with current hardware and software, and despite claims of easy integration, such is not often the case. Even assuming that everything has been installed correctly and is working properly, there can be unforeseen performance issues. "If you send an E-mail to your 20,000 employees telling them to now go to this Web site and review their benefits programs — well, if they all go immediately, it could be pretty slow or even go down," says Steve Fein, director of HR delivery services at management consultants Towers Perrin in Stamford, Connecticut.
These and other risks are not well understood, according to a survey conducted by Towers Perrin. There's a disturbing gap between what executives expect from HR systems and what they actually receive. For example, while more than 95 percent of executives surveyed believe E-HR can improve the quality and timeliness of service to employees, only 70 percent report actually receiving this benefit. Another key benefit, the ability to improve overall organizational efficiency, is expected by more than 95 percent of those surveyed but was actually reported by only 67 percent.
Yet even with these problems, perhaps one of the most powerful benefits of E-HR is the way it can restore the human touch to some of the country's largest corporations. Referring to the mySocrates system, GM's Barclay says, "You can't underestimate the power of what a tool like this does for making a large company feel small." Those who have rolled out Web-based systems say that their acceptance is immediate. Far from feeling fobbed off on a computer system, employees feel they've been given something substantive and responsive, two characteristics rarely ascribed to employee handbooks. For example, GM is now working on a "what-if" calculator that will let employees figure out how much they would get in retirement pay if they retired at various ages or adjusted other variables such as investment choices.
Barclay says a multifunction system such as mySocrates provides a strong base on which to add new features. "Our goals were to be common and consistent, so that all our employees can not only transact their personal business but also access information about their workplace, get tools and information about business processes, and use it for education, too. That was the master plan."
That broad approach to E-HR does not lend itself to the slam-dunk ROI analysis that a more limited system might. "Initially, when you're looking at individual productivity, it's very, very difficult to put a business case to it," says Barclay. "We could cite which applications would save money, but there's a bit of a leap of faith in there. Now that we have had two years of experience, we can determine what it's saving us."
Barclay won't divulge a figure, but it's safe to say that GM expects its commitment to show up on the bottom line.
Peter Krass is the president and founder of Petros Consulting and a former senior editor at Inc., InformationWeek, and Planet IT.
What Are Your People Worth?
For most companies, employee costs are the single largest expense. Yet precious few CFOs can define human capital, let alone put a price tag on it. So first, what is human capital? Human-resources professionals define it as the combined skills, knowledge, and experience of an organization's employees.
What's it worth? Few know. In fact, in a recent survey conducted by CFO Research Services, financial executives were asked whether they know the return on their organizations' investments in human capital, and only 16 percent said they did to a considerable or great extent. Not good. In response, vendors, consultants, and financial and HR executives are focusing on the burgeoning field of human-capital management (HCM). The central tenet of HCM is that companies must stop thinking of employees as an administrative cost and instead see them for what they are: a strategic investment. That should affect how the HR function is perceived, yet according to the survey, only 11 percent of CFOs today see HR as primarily strategic.
Investment in HR technology also drew a less-than-enthusiastic response. Fewer than half said they were largely or highly satisfied with their ability to track employee turnover. When financial executives were asked how well their systems facilitate systematic workforce planning, only 15 percent said they were largely or highly satisfied. When asked about HR systems' ability to measure employee skill levels, the satisfaction rating fell to 11 percent, and for the task of assessing a return on human-capital investments, the rating was just 8 percent.
Is HR prime ground for simple forms of automation but immune to more-profound changes that might elevate its status? Software vendor Recruitsoft thinks not. The company has compiled a list of the top trends and practices for HCM automation. Among its top drivers: the prevalence of project-based workgroups, which create demand for a new breed of HR systems that can keep up with the freewheeling, now-you-see-'em-now-you-don't nature of such groups.
Reader Comments» Post a comment