Share the risk for successful HR self-service

Keith Rodgers | 3 Feb 2010 | 15:08

Kevin Costner has a lot to answer for. Playing the character Ray Kinsella in the 1989 movie Field of Dreams, he was inspired to build his own baseball pitch after hearing voices telling him: “If you build it, they will come”. Inspirational as that may have been for someone looking to do a little more with their backyard than plant wisteria, as a management philosophy it has wreaked havoc ever since - not least in IT.

The “build it” line has since been applied to everything from railway lines to healthcare initiatives and, fittingly for a misquote (the real line is: “If you build it, he will come”), it tends to be bandied around rather carelessly. Nowhere is this truer than in the world of the web, where countless start-ups and a fair number of established companies have developed and released consumer-oriented products more in hope than certainty that they’ll attract customers.

It’s an even more dangerous philosophy in the business software field, as I was reminded during a conversation with an outsourcing company that had just struck a big HR deal with a well-known multinational. Manager and employee self-service is a significant component of the new agreement and is central to the customer’s plans both to cut HR admin costs and improve employee access to information. But, unusually, the way this deal is structured has less to do with optimistic projections about self-service adoption levels among employees and much more to do with sharing risk and reward.

Of course, the idea of providing employees and managers with online access to HR systems isn’t new, whether it’s to enable them to change their bank account details, view their pay history or carry out transactions such as submitting training requests. Today, self-service isn’t even restricted to the employee base: external job applicants can submit their details online and track the progress of their applications with candidate self-service.

It’s something every organisation should look at seriously, largely because the alternative approach – carrying on paying HR administrators to key endless data and answer a stream of mundane enquiries from employees – makes absolutely no commercial sense.

The problem is that there’s a difference between stuff making sense in principle and getting it to work in practice – a difference that usually comes down to factors such as ease of use, software navigability and how well you’re capable of managing a change project. The self-service software you buy needs to be designed for the way people really work, not the way some code-monkey at a software vendor thinks it ought to work.

In a conventional outsourcing deal, much of the benefit of self-service adoption (especially in terms of cost-reduction) goes to the outsourcer. But in the deal I was told about this week, the benefits are being shared much more evenly between the outsourcer and the customer. Put simply, the more employees use self-service and bypass the outsourcer’s relatively high-cost service centre, the less the customer pays.

Unlike most IT deals, this kind of set-up recognises one commercial reality: customers and suppliers have to make it happen together. Or, as Costner himself might have said: “If you focus on efficiency but build something that employees really want, there’s a fighting chance most of them might actually turn up.”

Paper-based recruitment has no place in an online world

Keith Rodgers | 17 Dec 2009 | 10:56

At a time when high-performing HR functions are being urged to automate anything they can lay their hands on, is there any place left for pen and ink and the humble handwritten note?

The question isn’t mine – it appeared today on an HR forum on LinkedIn, the business social media site, where someone asked if there’s any benefit in job candidates sending a hand-written note rather an email after a job interview. Amid all the navel-gazing and marketing pitches that creep into these kinds of forums, this particular entry drew a surprising number of comments, with opinion fairly evenly divided.

My answer would have been short and sweet: absolutely not. Partly, I have to confess, this is for selfish reasons. My own handwriting’s worse than a GP scrawling a prescription during a speed-writing competition – while drunk. I really don’t see why anyone else should have the edge over me in a job hunt just because they’ve got time to draw their consonants properly.

But it’s really about the fundamentals of the recruitment process. At a time of high unemployment, many organisations are already drowning in paper job applications. The last thing you want is candidates asking for even more of your time so they can thank you for the time you’ve already spent trawling through their CV and interviewing them. What the recruitment world needs is less paper, not more.

I’ve long argued that recruitment is as much a sales and marketing exercise as an HR discipline. You have to identify prospects and work out the most effective way to reach out to them – the web being an ideal platform to do so. You also have to sell your proposition and use your website to promote a positive brand image about your organisation. It’s about both presentation and capability. Faced with a choice between applying for a job through a well-designed website or writing a letter to an old-school outfit and waiting for them to mail an application form, most Gen Y job applicants aren’t going to stop and think twice.

Incidentally, this same marketing perspective applies to jobseekers as much as recruiters. If you do ever feel tempted to pen a handwritten ‘thank you’ letter after an interview, it’s worth thinking about the expectations of the people you actually met. Some recruiters might well appreciate the touch, if the responses on LinkedIn are anything to go by – but others will be far from impressed. When I ran the idea past a senior executive at a tech company in Silicon Valley, there was a pause and then came the reply “Are you serious? That’s just weird”.

Don’t be pushed into purchasing software you don’t want

Keith Rodgers | 9 Sep 2009 | 12:08

Which is the most dangerous attribute if you’re buying software or services: fear of the unknown, or blind faith in third party advisers?

I ask because I’ve recently witnessed both among organisations in the HR and payroll purchasing cycle, and I can’t help wondering exactly what percentage of software is bought by people who missed the foundation class on dealing with vendors.

Last week I was talking to a contact who was helping a colleague with an HR procurement project. Her company had already hired a well-known consultancy to manage the selection process, which it appeared to kick off via the time-honoured technique of typing a few keywords into Google or flipping through the back of magazines. This is not an unreasonable approach for a prospective purchaser – you have to start somewhere – but you do rather assume that a consulting company would come armed with some prior knowledge of the HR IT market. This is the only explanation I can come up with for why it completely overlooked one of the market-leading (and eminently qualified) vendors – and why, up against a tight deadline, the HR department had to make do with a flawed shortlist.

The tale reminded me of the time when I sat in front of a very knowledgeable French HR manager who was looking for help replacing his existing system. In the course of our discussions he revealed exactly what quality of service he was getting from his incumbent supplier; I can’t recall exactly where he ranked it on a scale of one to 10, but it equated to somewhere between mind-numbingly pitiful and bloody awful. As far as I can recall, among the supplier’s many failings was a blunt refusal to liaise with the client’s IT department over an integration problem, and a bizarre reluctance to help it migrate to its newest software platform – each of those reasons, you’d think, grounds for ripping up the contract. Naturally enough, we proposed to help him go through a business-needs assessment and start looking at his options.

Several weeks later, however, he came back to say his supplier had now agreed to oversee a migration to its new software. Despite having huge reservations about the quality of service he was getting, his view was that it’s better the devil you know, and so he signed for the upgrade. The fact that this particular devil would leave him burning in the fires of customer service hell with a metaphorical pitchfork in his figurative nether regions clearly wasn’t enough for him to pluck up the courage and see whether anyone else could do a better job.

Now I’m not for a moment underestimating how challenging it can be to select software and services. Organisations invest in new platforms so infrequently that many HR and payroll managers find themselves running selection projects without any prior experience, or with hazy memories of being involved in a project five years earlier. Vendors don’t tend to be forthcoming about weaknesses in their systems (a subject to which I’ll return to in the future). Many try to sell technology rather than the business fix you need, and it’s easy to get swamped by jargon. Worse, you don’t always know what you don’t know, so it’s hard to ask the right penetrating questions.

But there are ways of avoiding some of the problems. Even if you don’t have a strong and supportive procurement or IT department, it’s worth finding out if anyone else inside your organisation can help plug some of the gaps in your own knowledge and experience. If you need to bring in outside help, make sure they have the right expertise – there are good advisers out there, but there are quite a few that are not so good. Make sure you assess all the viable vendor options rather than opting for the easiest short-term choice, because spending a few extra days upfront could save years of grief down the line. And above all, don’t be scared to push back against the people trying to sell to you – or, just as important, against the people you’re paying to help you buy.

Twitter breach proves basic IT security is still a priority

Keith Rodgers | 20 Jul 2009 | 12:21

Brace yourselves for more debate about the security of hosted services following last week’s leak of confidential recruitment documents and other material belonging to Twitter, the social media company.

The drama kicked off on Tuesday when Tech Crunch, one of Silicon Valley’s best known blogs, revealed it had been given documents hacked from Twitter’s internal systems. The information ranged from sensitive material about the names of people who had been interviewed for senior jobs at Twitter (which Tech Crunch nobly said it wouldn’t publish) to financial projections and product plans (which it planned to). In short, it was the kind of security breach that keeps HR and finance managers awake at night.

The announcement provoked a barrage of comments on the Tech Crunch site, most of them apparently arguing that it shouldn’t publish anything – a surprisingly ethical stance for the people of Silicon Valley, but one that probably reflects a certain sense of “there but for the grace of God”. But Twitter head honcho Michael Arrington pushed ahead, m’learned friends got involved, some stuff got published – and the net result is that we’re all a little bit wiser about Twitter’s financial forecasts and internal strategy.

Leaving aside the ethical debate, the incident raised a number of concerns about the security of hosted services. Along with a growing number of organisations, Twitter uses the Google Apps hosted service as an internal collaborative tool to share documents, spreadsheets, ideas and the like. According to Twitter’s blog, the information got out because an employee’s personal email account was broken into, giving the hacker information that allowed them to then access that employee's Google Apps account.

As I’ve pointed out before, there are potentially huge benefits for organisations in using internet-based services that store data “in the cloud” rather than on your own system, whether it’s in the form of Google Apps or an entire HR management system. High among them is the ease of sharing information, the ability to access documents from anywhere else, the zero IT-maintenance overhead and the fact that some are cheap or even free to use. But you also need to be aware of the risks. The Twitter breach isn’t anything as spectacular as someone hacking into a data centre – it’s the much more mundane problem of poor user passwords. As Twitter itself pointed out, “this attack had nothing to do with any vulnerability in Google Apps, which we continue to use. This isn't about any flaw in web apps, it speaks to the importance of following good personal security guidelines, such as choosing strong passwords.”

The reality is that you’re as secure as you choose to be when you use either hosted services or conventional on-premise systems. All your employees need to understand what makes a strong password and why you shouldn’t use the same password for everything from Facebook to online banking (let me pause for a moment while I update my own…). And you need to opt in to better security. Google points out, for example, that since 2006 it’s supported “two-factor authentication”, which allows organisations to add an extra layer of security to passwords by using smartcards, devices that generate one-time passwords or even biometrics.

It’s a bit like securing your office. You can give all your employees a front door key, you can invest in a sophisticated electronic access and monitoring system, or you can do something in between. The bottom line is that you choose, consciously or unconsciously, the level of risk you want to take – and you, not the door, are to blame if something goes wrong.

Self-service IT can give your career a boost

Keith Rodgers | 23 Jun 2009 | 17:11

Don’t tell your finance director, but we’ve finally got confirmation of something we’ve all long suspected: almost half of HR managers keep a crafty eye on their CV when they’re deciding which business software or services to buy.

This was one of the findings from a recent survey of 100 UK HR directors and managers, in which 44 per cent of respondents admitted that expanding their personal experience and enhancing their CV were important factors in helping them determine whether or not to invest in HR software or services. The surprise wasn’t so much that these self-serving instincts play a big role in corporate software selection – it was more the fact that so many senior HR professionals had the guts to admit it.

The choices you make about business software and services are bound to have an impact on your career - a very negative impact if you get it hopelessly wrong and end up running some sprawling IT project that never ends, busts the budget and fails to deliver anything remotely resembling tangible value. And there are plenty of people out there who’ll have realised during their software selection process that shoving a major SAP implementation on your CV isn’t exactly going to hurt it. In fact, software and services play such an integral part in modern people management that there are very good reasons why you should boast about what you’ve done on the IT front, assuming you can translate it into some kind of business benefit. The only question is: are you polishing your CV at the expense of the greater corporate interest?

Thankfully, the answer seems to be “no” for the majority of HR professionals. According to the survey, published by Webster Buchanan Research in association with Computers in Personnel, the biggest drivers for investment in software or services are improving quality of service to employees and managers, reducing HR admin costs and cutting IT costs – three factors that were each cited by almost nine out of 10 respondents. In addition, almost eight out of 10 respondents were looking to improve the quality of management information, and almost three-quarters wanted to free HR from its administrative burdens to provide more strategic input to the business.

This all helps explain why technology, such as manager and employee self-service, are grabbing so much attention in both HR and payroll. According to the survey results, 17 per cent of respondents now provide electronic payslips and a further 42 per cent plan to do so within 12 months – so if you’re not doing it yourself, you could soon find yourself in the minority.

Similarly, almost half the respondents planned to give employees access to their pay history online. A raft of other HR self-service initiatives are also in the pipeline, from recruitment to absence management to training.

Even if economic realities slow down the pace of self-service adoption (as they probably will), the findings suggest that the majority of companies now find the business case for HR self-service pretty compelling. And why not? You can cut admin costs by letting employees enter data and carry out routine transactions, and you can typically provide quicker services and better information access to everyone involved in the process. Achieve that kind of business outcome and, who knows, your revamped CV really might help to propel you to a better job.

Let’s stop making excuses about IT

Keith Rodgers | 13 May 2009 | 13:02

Taking a trip to San Francisco last week reinforced the chasm that exists between the frantic, anarchic pace of innovation that drives Silicon Valley and the stifling conservatism that holds back IT adoption in much of HR in the UK. Somewhere in the middle is a compromise that could transform the way we work, but who’s looking for it?

Having spent the best part of this decade in San Francisco before recently moving away, my judgment on these things is bound to be a little prejudiced. But when HR talks about the emergence of software as a service today, Silicon Valley diehards snigger and recall how application service providers (ASPs) were trying out the same IT outsourcing models in the late 1990s. While HR managers muse on how Web 2.0 tools are starting to move from the consumer world of MySpace and Facebook into the business world, Silicon Valley thinks of people such as Ismael Ghalimi, who organised the first Office 2.0 conference in San Francisco back in 2006.

Of course, there are good reasons for HR not to be at the vanguard of technology adoption. For one thing, the first releases of software products often have problems – in fact, it’s common in the Valley for start-ups to release half-finished products under the guise of a “Beta” program, so they can gain a foothold in the market and get free feedback from early adopters. You’re usually better off waiting for later releases and a few real-life proven business benefits before parting with your cash. And yes, there are significant barriers to adopting technology in HR, including tight budgets, time constraints, lack of resources and the fact that HR doesn’t exactly leap to the front of the queue when it comes to IT priorities. But that doesn’t explain why so many HR functions lag behind their peers on the adoption curve.

Take established technologies such as HR self-service. Why, when half the western world is comfortable doing its banking online, do some HR managers still worry whether self-service access to pay and personnel details can be managed securely? Why are fundamental HR disciplines still run by shifting pieces of paper around and keying in data, when basic automation would cut costs, reduce data duplication and minimise errors? And why do HR and payroll departments put up with a steady stream of employee enquiries that could be resolved with a couple of days’ work writing a frequently-asked questions section for their HR intranet?

Prudence is one thing, but sometimes the biggest problem in HR IT adoption is a lack of drive. Technology is never the panacea for HR’s challenges but there are plenty of examples where HR functions have invested wisely in software and services and got decent business returns. If HR laggards aren’t curious enough to analyse the business case for investing, and passionate enough to sell the argument internally, they’re never going to cross that divide.

Step outside your payroll comfort zone

Keith Rodgers | 14 Apr 2009 | 15:04

Think it’s tough trying to squeeze efficiencies from your HR and payroll operations? It could be a lot worse. Imagine you are running payroll in 11 countries by using 13 different systems and outsourcing partners - and then being told to consolidate it all.

That was the scenario outlined by Ray Porter, employee services director at global IT giant Dell and vice chair of Webster Buchanan’s multi-country payroll forum. It’s what Ray took on when he was given responsibility for Dell’s Asia Pacific and Japan payroll operations two years ago. Today, after driving through a major change project, he’s on course to have most of the company’s regional employees paid by a vendor from only two locations, China and Malaysia, by the end of this year.

You can imagine what this means in terms of efficiency. Two consolidated centres bring enormous economies of scale, and having just one supplier to deal with cuts your vendor management costs and can give a bit of clout during contract negotiations. Then there are the benefits that come from improving management control, opening up access to information and reducing the risk of payroll failure. On top of that, the quality of payroll service has also improved.

I’ve had numerous conversations with Ray about how he handled the project. Several things are worth keeping in mind if you’re looking to drive through efficiency changes in your own HR or payroll function. First, there’s Ray himself: while he’s got plenty of payroll experience gained prior to Dell, his background is in operations. So he came into this project, not as a guru steeped in the complexities of Asia-Pacific payroll legislation (he hires people for that), but as a change expert. While I’ve met plenty of senior HR and payroll professionals over the years who’ve successfully led major change projects, I’ve also met plenty more who don’t have that experience. It’s not a criticism, but if you’re in that position you may want to think about bringing in change expertise, either through consultants or by recruiting someone in-house.

Second, this kind of project would never leave the drawing board in many organisations because of a combination of excess caution, low ambition, poor vision and lack of commitment. It’s true that there have been plenty of badly-run centralisation initiatives. And the list of things that can go wrong in something of this complexity is scarily long - think of the people and process issues, the language and cultural barriers, the technical challenges of building two service centres and migrating onto one technology platform. But while you need to go in with caution, there’s a big difference between caution and paralysis - and paralysis isn’t an option in the current economic mess. It’s better to think big about what you might be able to achieve and then scale back to what you’re capable of, rather than starting out in your comfort zone and scaling back from there.

HR should hurry up and embrace Web 2.0

Keith Rodgers | 18 Mar 2009 | 16:55

It’s good to see the CIPD warning HR about the perils of ignoring Web 2.0 tools for knowledge sharing and collaboration. After all, the reality is that HR needs Web 2.0 far more than Web 2.0 needs HR.

Social networks, blogs, wikis and other Web 2.0 tools may be relatively new to the HR community, but debate has been raging for years about how to turn them from consumer devices into useful business tools. I remember attending the inaugural Office 2.0 conference in Silicon Valley back in autumn 2006, where experts suggested recruitment could be the ‘killer application’ for Web 2.0 (geek speak for indispensable software). The argument was that growing numbers of people use the web for recruitment already, so it would lend itself nicely to new ways of working.

Admittedly most of the people attending that first Office 2.0 conference were in the business of selling software and services rather than actually using them, but by the time the second event came round the following year some real-life case studies had emerged. And what was eye-catching about them was that they tended to be driven from the ground up. Instead of the IT or HR department encouraging adoption it was often younger employees who led the way, driven by sheer frustration at how hard it was to share information and collaborate in a corporate or public sector environment.

Pharmaceutical giant Pfizer was a good example. One employee talked about how he’d circulated notes about a conference he’d attended and found they generated a huge volume of internal emails. That prompted him and a colleague to set up an internal blog, which by autumn 2007 was getting 400,000 hits and was being funded by the company. At the same event, Morgan Stanley revealed it was running 70-80 Web 2.0 projects, many of them driven by a 20-something in-house pioneer.

The reality is that blogs, social networks such as MySpace and video-publishing sites such as YouTube have long been a way of life among “Generation Y” and are spreading across all age groups. It’s all about user-generated content and sharing, the opposite of the one-way ‘push’ approach and formal meetings that characterise traditional corporate communications. Frankly, if you’re used to tracking what your friends are doing through Twitter and sharing photos and updates through Facebook, you’re not going to be massively impressed if your HR department takes three months to set up a cross-functional steering committee to investigate internal communications policy.

The problem for HR is that Web 2.0 tools will continue to be used by employees, whether through officially sanctioned channels or not. If HR chooses not to participate it will simply be bypassed – to its own cost, and to the detriment of the rest of the organisation. On the other hand, the potential benefits of using some of these tools are huge, from improving internal communications and collaboration to expanding recruitment channels and building alumni networks. Sure, there are big issues to tackle along the way. But those challenges will be confronted with or without HR’s involvement – and HR should be helping to shape the solutions.

Putting benchmarking in context

Keith Rodgers | 30 Jan 2009 | 14:54

HR and payroll have long relied on benchmarks to measure their performance. Why is it then that we rarely end up comparing like with like?

Take payroll. The kinds of metrics that keep HR, finance and payroll professionals awake at night are fundamentals such as accuracy, timeliness, compliance, quality of service – and, of course, cost. On the surface, three of these are pretty straightforward. Payroll’s ultimate goal is to deliver pay 100 per cent accurately, 100 per cent on time and comply with all of its regulatory and internal requirements. The fact that it’s pretty much impossible to be right all of the time means that when it comes to accuracy, most companies settle for something close to industry standard.

But what does industry standard really mean? In a mid-sized or large organisation accuracy is determined by a wide range of factors, including whether payroll is adequately resourced, the degree of automation and the extent of outsourcing. Several factors are, to an extent, outside payroll’s control, including the quality of data supplied by HR and others – which explains why some organisations now distinguish between errors created by payroll and those originating from the rest of the business.

By the same token, the levels of resource and automation within payroll will have an impact on two other core metrics: cost and quality of service. You can achieve world-class accuracy figures for a payroll serving thousands of employees if you throw enough money at it, and you can deliver top quality customer service if you hire enough experts to answer employee queries knowledgeably or invest in a comprehensive website and self-service. The point is that many organisations would rather accept slightly poorer quality in return for lower investment.

With this number of interconnected variables, it’s no surprise that when you start to compare payroll performance company-to-company, you get some big discrepancies. When Webster Buchanan Research explored payroll performance among a selection of multinationals last summer, for example, we found that FTE ratios – the number of payroll employees against the number of employees paid – ranged from 1:200 to 1:1000 across different European payroll functions. That didn’t necessarily mean that one payroll team was five times more efficient than the other: it meant that multiple factors had come into play, from the complexity of the local country environment to the nature of each payroll function’s work. Working with a number of large multinational companies, we've analysed these factors in a report designed to help organisations build their own payroll performance scorecards.

Of course, contextual factors are there to help provide more nuanced insight into performance – not excuse poor results. If your HR or payroll performance doesn’t stack up against third party figures, the best reason for analysing the discrepancies is to see what you can do to up the ante – rather than merely defend the status quo.

DfT shows how not to do large-scale IT change projects

Keith Rodgers | 23 Dec 2008 | 11:12

If you’re thinking of embarking on any kind of consolidation initiative in HR or payroll, last week’s damning government report on the Department for Transport’s (DfT) shared services fiasco provides a helpful guide to what not to do.

The DfT was accused of “stupendous incompetence” by the House of Commons Public Accounts Committee for its efforts to pull HR, payroll and finance administration into one in-house shared services centre. And for good reason. In the course of a project that converted £57 million worth of anticipated benefits into an £81 millon net cost to the taxpayer, the department seems to have broken pretty much every rule in the book.

The project, which kicked off in April 2005, provides half-a-dozen good lessons for any organisation looking to embark on a big IT-related change project.

1. Don’t skimp on the planning Despite being aware of the risks, DfT put together an aggressive timetable for its shared services project that called for two agencies (the Driver and Vehicle Licensing Agency and the Driving Standards Agency) to go live within a year, believing that there was “no advantage in planning for a longer detailed design and later start”. This compressed timetable was at the root of many of its problems – not least its decision to save time by building on an existing IT system rather than going out to tender. Anyone who’s been involved in tendering knows it can be a time-consuming and tedious process, requiring liaison with multiple departments – but it has the big advantage of forcing you to define your requirements closely and analyse risks.

2. Get buy-in Centralised shared services projects are all about standardising on best practices – but the committee reported that the DfT couldn’t fully resolve “the inherent tensions in securing the agreement of seven separate agencies to a single set of processes”. After going live, meanwhile, it seems DfT wasn’t overly concerned that users lacked confidence in the system, believing this was normal for a large change programme.

3. Know what you’re capable of According to the committee’s report, the department didn’t have enough skilled or experienced project management staff. Likewise, its various agencies “were unable to provide appropriately skilled staff with detailed knowledge of their individual business processes to work at the shared service centre”. This kind of skills gap isn’t uncommon in a shared services project, so you need to be sure you can track down outside help if you need it and budget accordingly

4. Monitor progress and act on the evidence The department realised within two months of kicking off the project that its original timing assumptions were wrong, but pushed on regardless. Not surprisingly, the committee recommended that future projects adopt a milestone approach to assess progress and check the feasibility of the budget and timetable

5. Use meaningful metrics More than three-and-a-half years on from the project launch, DfT collects data on only 14 out of 18 performance indicators, which implies less than total commitment to the principles of performance management. Worse, at the time of the committee hearing, it had hit only four of them. In its defence, DfT argued that its performance lagged averages in the private sector because it has less economies of scale and government reporting requirements add complexity. Both claims may well be true – but, if they are, the department needs to develop more meaningful metrics that take these factors into account.

6. Test, test, test The harsh reality of software is that it usually doesn’t work the way you expect first time round, so you have to test extensively before you go live. DfT took the opposite approach, cutting testing from two months to two weeks to make up lost ground – and, not surprisingly, ended up with an unstable system.

The DfT initiative isn’t the first time that these kinds of mistakes have been made, of course – although it’s rare for one organisation to tick off quite so many boxes on the blunder checklist. The question is, will the rest of us learn from its experiences?