The benefits of online employee self-service systems are manifest and obvious, but careful planning is still required to ensure the software delivers on its promise. What are the real world lessons that can be learnt and what benefits can be achieved? Angus Kidman reports
The primary motivation for most employee self-service systems is simple: reducing the administrative tasks associated with payroll and leave management, and thereby reducing costs and increasing profitability for the business.
That focus becomes even more important as new options (such as superannuation funds choice) get added to the menu. A recent survey by the Aberdeen Group found that reducing the cost of employee benefit selection was the top priority for C-level managers, both in HR and elsewhere. Reducing the overall workload came second in that list, while maintaining staff retention levels was third.
As that ranking of priorities suggests, ESS systems can offer broader business benefits than simply lowering costs and reducing headcounts within the HR and payroll departments. Freed of the need to concentrate on administrative trivia, HR and finance staff alike can concentrate on higher-level business goals.
Compass Group finds direction
For national catering and food services company Compass Group, the shift to employee self-service was a natural extension of a broader consolidation and expansion plan. With around 12,000 staff over 600 locations and 22 separate internal companies, Compass Group has always had a challenging payroll structure.
Because it operates in so many locations and with a variety of companies, the payroll system for Compass Group was particularly complex. Staff are covered by more than 150 different awards and, more recently, by more than 300 individual workplace agreements. In some locations, managers would interpret award requirements and send in completed timesheets, while others would send in basic timesheet data and rely on the central office to interpret that information. “We had a multitude of people interpreting awards,” says NadiaLake, national payroll and accounts payable manager
In 2001, as part of a plan to expand into Asia, Compass Group decided to centralise its existing payroll arrangements, which had payroll staff in both Sydney and Melbourne, and move all payroll activities into Perth. At the same time, the company wanted to upgrade its ageing payroll software and move to a system that would allow employee self-service.
“We wanted a system that was fully integrated with payroll, HR and self-service,”Lake says. After examining software from a variety of providers, Compass Group ran a phased transition to its new provider, getting the system up and running in its east coast location before moving the entire operation to Perth. “The biggest challenge we had was change management,”Lake says.
Due to the previous system, some staff had been overpaid due to incorrect award interpretations. “The business made the decision that if employees had been overpaid, we’d forget it,”Lakesays.
The new process is much more streamlined. Stafffill out timesheets which are given to their local manager to approve. “Because of our internal structures, it was more logical for managers to approve their manual timesheets,”Lake says.
Because most employees work regular shifts, managers only need to key exceptions into the system before sending it in to the central payroll office to produce payment information. Employees can access payslips and leave information both from onsite computers or from any internet-connected machine.
Since introducing the software, Compass Group has had a major upgrade every year. “We send through a lot of enhancement requests,”Lake says. A change the company requested early on was an enhancement of the rules applying to the superannuation guarantee charge.
One lesson Compass Group learned from the transition was the importance of having existing payroll staff involved in the entire implementation. “The biggest thing is to fully scope out the transition from the old system to the new system. Make sure that the people doing that are the people who will be doing the job in the end,”Lake says.
While a project manager was initially employed to oversee the project, having actual payroll and HR staff involved made the system much more workable. “Although it was hectic, I found a lot of value in being involved from the start with the whole implementation.”
Compass Group also has a member of staff partially dedicated to systems administration, an approach which has paid dividends. “If you actually need to get system things done once you’ve got the database, you need to pay consultancy time,”Lakesays.
Compass Group created a role for a systems administrator within its team, who effectively became a second consultant by working closely with the new provider during implementation. “Now we can write our own awards modifications and make changes without having to run up a lot of costs. If you’re going to have a lot of employees, look at that kind of role,”Lakesays.
TAFE shifts from printing
Employee self-service has helped streamline administrative processes for TAFE Tasmania. With around 2,500 employees covered by the system, human resources manager Paul Gourlay estimates the system is the largest rollout of its kind within the state. “We’re probably the leading user of employee self-service in Tasmania, although we’re not the biggest organisation.”
“We have about 2,500 employees within TAFE, including our casual staff. Virtually all of them are required to use employee self-service for leave and also for payslip information.” For extremely casual staff (such as those employees teachers who only work a handful of days each semester), TAFE Tasmania still uses provides printed payslips.
“Like any HR environment, you’re trying to support the achievements of the business’ objectives,”says Gourlay. “You’re wanting your business units to ensure that they’re working in a way to best meet those outcomes. You need to give them support, and you also need to give them resources and appropriate systems so they can get on and do their core business and not worry too much [and] be bogged down about HR.”
“Employee self-service means our people can apply for leave online, which generates an email to their immediate manager and tells them there’s a leave application there. We get to see all the leave applications for processing purposes as a QA measure but the actual application is no longer a paper-based thing. It’s one business method that helps support our managers out in the field to get on with their core business rather than have to waste time on administration. Employee self-service gives us a much more user-friendly and efficient process by which to do that.”
In the past two years, TAFE Tasmania has also phased out printed payslips in favour of online access. “It was always there, but we were doubling up for a while.” The changeover went smoothly. “Other than a couple of small issues, we’ve not had any complaints. We just had to inform and consult with employees and unions, and agreements were changed to allow for appropriate provisions.”
TAFE generally upgrades its software once a year. One change request it has for the current version involves electronic payslips. “One of the glitches on the electronic payslip is that it doesn’t show the per-annum salary, which some people want for financial purposes such as bank loans.”
As with any large IT project, careful planning is critical. “The key thing is to make sure you’ve undertaken adequate planning, whether it’s a formal business plan or just some specific guidelines in place. Ensure what you want is right and that your clients will be happy with that, and secondly that it will meet the business needs.”