Groupon says its focus is on the bottom line, rather than top-line growth.
With an Internet-based program, retail personnel can administer their basic HR needs at the store without calling HQ.
When it comes to IT spending at retail companies, the human resources function has been something of a stepchild. It’s had to get in line behind the competitive resource demands of customer-facing web site bells and whistles and back-end systems that manage inventory and logistics. But as retailers poke into every corner of their operations to find savings and boost margins, the web is slowly emerging as HR’s new best friend.
It can reduce the load on the human resources staff who spend hours getting answers to the same questions for employees over and over again by putting that information online. And by streamlining communication between workers and the company, it also can support strategic objectives such as employee retention, those using it say.
Hannaford Bros. Co., a grocery store chain in New England and New York, will this summer roll out HR self-service in its 115 stores, using an HR solution from Lawson Software Inc. and Compaq Computer Corp. in-store kiosks. Employers will be able to use either web-enabled kiosks in the stores or home PCs to access and update personal information on file, making changes to name, address, emergency contacts and insurance beneficiaries or even changing their tax withholding information. “If we can provider better ‘customer service’ to our associates, if they can view their pay and benefit information online and answer their questions themselves, they’ll be happier and therefore less likely to leave,” says Bill Punsky, human resources information services manager.
Hannaford Bros. HR managers in each store already are able to access each employee’s personal information from their own desktop PCs, which speeds up their ability to answer employees’ questions. In the fall, the company will add functionality that lets employees complete benefits enrollment online, a labor-intensive task at most large companies as forms with current information must be collected for every employee in what’s generally a two- or three-week enrollment period.
Hannaford Bros. hopes the new system will eliminate as many as 250,000 HR-related faxes a year and will reduce employee turnover-at about 60% annually, already under the industry average-by another 2.5%, Punsky says. “This also will present information in a much more user friendly format-it will be less frustrating than going through some of the mechanisms we have today,” Punsky says.
Cost-savings and employee retention were both top of mind at regional discount retailer Ames Department Stores Inc. when it launched Planet-Ames.com, an employee portal from provider Plumtree Software Inc. With 23,000 employees, Ames looked to the web to help break a paper chain of internal communications. It has moved policy and procedure manuals as well as HR FAQs online, saving paper, printing and distribution costs. The portal is also streamlining the in-house job applications process. Jobs once posted on bulletin boards are now posted online, saving administrators several hours weekly in updating the boards.
“Letting employees view in-house job opportunities in the portal increases privacy, making for more satisfied workers in addition to saving time,” says human resources manager Gail Gagnon. “The portal helps ensure that professional choices aren’t public events.” Gagnon adds that the portal also helps retain employees by linking them to resources that promote a healthy work/life balance. “Our portal brings together links to corporate discounts, volunteer opportunities, and a variety of support networks, raising morale,” she adds.
At Best Buy Co. Inc., another Plumtree installation, the corporate portal offers self-service for employee information and benefits information. Employees can use desktops or in-store kiosks to view their own salary and job description and history. On the benefits side, they can access and change enrollment information from home PCs as well. “It’s eliminated a lot of paper and manual entry both on the employee and the benefits administrator side,” says customer relations manager Laurie Roach. “By automating the process, our employee data is more timely and more accurate. And if employees want to know what their own HR data is, they can look online instead of having to call their HR representative.”
$525 a year each
For retailers and other companies with a lot of employees, and a lot of HR and benefits forms to handle, web-based self-service is a tantalizing prospect. Studies have shown that anywhere from 50% to 70% of an HR department’s time is spent in administrative tasks such as distributing forms and seeing that they are filled out and entered into the right system.
“You don’t need someone with a college degree to do that,” says Monica Barron, senior analyst with AMR Research Inc. “Yet estimates are that by the time the forms are passed around, approved, and the data entered, it can cost up to $35 per transaction. At an average of 15 transactions per employee per year, do the math, and you can see that you’d like to start moving some of this out to self-service on the Internet.”
Workscape Inc., a provider of HR and benefits corporate portals and software, says the cost of distributing and filing a paper HR form is $20 to $30, depending on its complexity. Interactive voice response through an automated phone system may cut the cost of the transaction to $2 to $4, while going online can reduce the cost of the same function to as little as a nickel or a dime.
The economic benefits of online HR should come as no surprise to Internet retailers, who’ve already discovered the value of customer self-service online. Buy.com Inc., for example, has deflected 23% of customer e-mails that would otherwise require expensive live help by beefing up interactive self-service technology in the help area of its web site. That reduced customer service costs from 2% to less than 1% of revenues.
Using the web for HR functions can show many of the same benefits. “It’s similar to what they are trying to do with customer self-service,” says AMR’s Barron. “For example, employees would first see if they could find their own answer online. If the matter is too complex, they might be able to send e-mail to HR and receive back either an e-mail answer or a request that they call. You can move through different levels of service, but the more you can move out to the Internet, the less expensive it’s going to be.”