Employee Self-Service Takes Off

Empowered workers boost companies' bottom lines

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Post offices, grocery stores and retail giant Home Depot offer self-service checkout. It's a concept that has migrated to the human resources world with great results. Workers can be given the ability to track, review, and amend their personal records including payroll deductions, vacation balances, and health insurance benefits. This enables human resources personnel to focus on other goals.

"We are able to redirect our time to more strategic objectives, which can have a huge impact on the bottom-line,'' says Eric McGahhey, manager of human resources for ActiveHealth Management.

Recruiting, employee retention, and assisting senior management with achieving their business goals are among some of those other efforts that ActiveHealth Management's diminished human resources staff can now focus its attention on.

Partner Insights

McGahhey, a one-person human resources department, says the New York City-based health management firm sought a more efficient means to both send and receive information from the 220 workers located in its Illinois, Ohio, and Virginia offices.

Top 10 Benefits of HR Software

* Increase employee and manager productivity.
* Improve service to employees and managers.
* Reduce administrative and operating costs.
* Improve overall organizational and HR efficiency.
* Enable HR to service the organization more strategically.
* Enable HR to become a strategic business partner.
* Improve the timeliness and accuracy of data.
* Make HR call centers more efficient.
* Enhance the ability to recruit and retain top talent.
* Increase employee satisfaction and reduce turnover.

Source: ADP

Before engaging ADP's employee management service, called Benefits Expert, in mid-2002, ActiveHealth had a long, drawn-out process for activating health coverage for a new hire. Information flowed through a matrix of contacts that included telephone calls, postal mailing of forms, and restricted portals for contacting insurance carriers. It could take as long as two months to process coverage.

McGahhey says ActiveHealth has realized a significant, albeit undetermined, cost savings since it began utilizing the ADP product. Meanwhile, the time to process requests through the Web-based benefits administration portal has been reduced to a week.

"I don't have to enter the data into the system, it's automatically submitted to the carrier,'' McGahhey says, "and the proper amount is deducted from payroll."

Not Hot? But Warm

If not hot, HR is at least increasingly productive for accountants, consultants, and resellers. Browser-based self-service has brought previously unavailable capabilities to companies of all sizes.

And Web-based functions may pull companies like Creative Solutions, the Dexter, Mich.-based tax and accounting software vendor, towards HR functions, although probably not completely into that market.

In December, CSI introduced Web Employee, a Web option that gives employees of the accountant's clients read-only access to their payroll information, including the paycheck, stubs, and W-4s. The company is considering adding the ability to read and edit W-4s online, says CSI marketing vice president Jack LaRue.

"We are looking at tying some of the HR things a little bit closer," he says. However, LaRue emphasized that CSI has no intention of expanding its market beyond accounting firms.

Similarly, Andover, Mass.-based Exact Software has its eye on the HR self-service market. The company has HR functions in the Macola ES line and its Internet-based e-Synergy CRM application. There is no announced date for a self-service component. But the company has no doubt about the potential for savings.

"Some of the estimates we've seen is that you can cut HR costs by half," notes an Exact spokesman.

In the accounting market, Best Software's Abra Suite has been a major offering for some time. Products from the St. Petersburg, Fla.-based Abra Specialized Business Solutions are sold through a large number of software resellers.

Best is putting an increased emphasis on HR, having established the Consultant Alliance Program, a network of HR consultants.

The company has been in the self-service business for some time. But last fall it replaced its older component, Abra Self Service, with Abra Workforce Connections.

"The old self-service module did not have any workflow," says Tom Tillman, director of product marketing for Abra. "Employees could look at certain things, but the ability to change things was very limited. There was no approval workflow in the product."

Delphia Sees Opportunity

Brian Delphia agrees that there is a lot of opportunity to computerize HR departments. His Columbus, Ohio-based reselling firm closed four deals in the first week of February. None of the new clients had previously used HR software.

Putting HR departments into the computer age is also significantly changing the importance of HR jobs. "No longer is the HR profession just planning the company picnic. They are truly taking a seat at the company leadership table," says Delphia.

The firm is an HR specialist that handles Abra and markets its own HR Actions, which interfaces with Abra. HR Actions automates the handling of employee change forms for existing employees, transfers, new hire/ rehires, and new positions. Eliminating that amount of paper handling is important in reducing cost and elevating the role of the HR department, he says.

"I've seen estimates that about two-thirds of an HR professional's time is spent in paper pushing," says Delphia.

Besides providing a self-service function, HR Actions also helps companies with Sarbanes-Oxley compliance issues. "It has a lovely audit trail. It means your systems for internal control for Sarbanes-Oxley are testable," says Delphia. Enterprise systems have similar functionality, but companies such as ADP, Ceridian, and MBS don't provide it in their software and services, he claims.

Delphia shows an obvious bias for the reliability of resellers that specialize in HR. "HR is a different animal," he says. "I can say that as a CPA, when I first started, I didn't get it."

While Delphia works with about 25 accounting software resellers, the partnerships aren't as easy to establish as it might seem. "There is so much distrust in this community," he says. Other VARs feel that, "I don't want to disclose the names of my customers. You might steal them," he says.

Delphia envisions that the opportunities in selling HR products will continue to be numerous for several years. While the average mid-market company hangs on to an accounting system for seven years, "people change their payroll system every 18 months," he says.

The Net-based Workforce Connections provides standard features such as benefits administration, employee training, certification, health history, and tools to help with government compliance and strategic planning.

Abra products come in a variety of product configurations. The online benefits enrollment is priced at $3,000 for 150 employees and $10,000 for 1,000 employees. The HR Suite, including attendance management, organization change, training, administration, and recruiting, is priced at $16,000 for 1,000 employees, not including payroll and self-service. Self-service with HR administration for 150 employees would cost about $5,500, not including online benefits enrollment and support.

Best's Other HR Shoe

Best's Accpac HR Series, also Web-based, enables midsized companies to collect, manage, calculate, and report all employee data via its Employee Self-Service component.

Users of that module can view and update personal data, obtain benefit plan information, and make plan comparisons. And the more employees with access to their personal data, the more cost-efficient the system becomes, says Dave Emery, product marketing manager for Accpac HR Series and Accpac Options.

"HR self service is more cost-efficient for companies with 250 employees, at least that's what our sales point to," says Emery. But he adds, "However, employee self-service is applicable for any company whose employees have access to their company's Intranets."

The HR Series is built around a required Core Module that handles HR administration, benefit management, attendance, compensation and performance management, Cobra administration, customization, reporting, organization charting, and data import and export. Besides the self-service module, there are also the separately sold Payroll Link, Applicant Manager, and Alerts Library.

Accpac offers two versions: the Corporate and the Enterprise. Pricing for the Corporate Edition starts at $1,000 for a 25-employee system; the Enterprise Edition at $4,750 for a 100-employee system that can also handle unlimited attachments.

Despite the wealth of software available and despite the push for employee self-service, many companies still handle HR the old-fashioned way: They track it on an Excel spreadsheet. That means there is a large market for HR software.

"Many people think the HR product is too big for them, but it is a lot less effort to track on Accpac," notes Sandy Needham, president of American Computer Consulting Co., a New York-based Accpac reseller.

Revenue from the Accpac HR line represents about 10 percent of AECC's annual revenue of $1.5 million. The company has been selling the HR software line since Accpac introduced it approximately three years ago.

In contrast to the accounting market, where many customers are on their second- or third-generation systems, many HR purchasers are first-time buyers, says Needham. The sell is relatively easy, almost too easy to the point that HR installations don't produce a lot of consulting dollars.

The purchaser is "usually somebody whose pain it is to do the job," says Needham. "In the smaller company, it's somebody who does HR and something else."

MBS: A Diverse Line

Microsoft Business Solutions has an array of HR products accompanying its accounting software lines.

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