Technology impacts all our lives, both personally and professionally. When a major HR technology solution is implemented in an organisation, it usually affects everyone. Teresa Russell talks with two companies about their successful implementation of new e-HR systems
What could Cement Australia and McDonald’s Australia possibly have in common? It’s not the obvious answer – that they both have the word ‘Australia’ in their names. And it’s not that they were both finalists in this year’s Australian HR Awards in The Employee Connect Award for Best Overall Use of Technology category either.
Both companies belong to global organisations that they looked beyond when it came to sourcing a suitable e-HR system. McDonald’s needed a recruitment system and Cement Australia needed a whole HRIS solution. Neither parent company had what their Australian organisations needed, so they each went about creating solutions that are now considered the system of choice for the rest of their organisational worlds.
Cement Australia was formed after Australian Cement Holdings and Queensland Cement Ltd were merged in 2003. The company now employs around 1,500 people, including contractors and truck drivers. Predominantly an east coast operation, it has four major production facilities from Tasmania to Gladstone, producing 3.5 million tons of cement powder each year. A strong distribution network and a retail arm that sells packaged products to hardware stores support the production operation. Its parent companies are based in Switzerland, Germany and Mexico.
McDonald’s Australia is a quick-service restaurant chain with 70 per cent of its restaurants franchised and the rest company-owned. It employs around 65,000 people in Australia and is the largest employer of youth in the country. Its business has changed significantly over the last few years, driven by a change in strategy. It is now the largest coffee chain in Australia, with 350 McCafes open and another 150 opening soon. The demographics of its customers have changed and so have those of its staff. Older workers with a need for flexible daytime hours now complement the traditional generation Y evening and weekend workers.
Wayne Beel, general manager, people and performance, at Cement Australia, says that when the two companies merged to form Cement Australia a few years ago, one had a comprehensive, disciplined, low-cost paper-driven HR process, while the other was part of a big, expensive worldwide HRIS system.
“Neither one was going to suit our needs going forward. We didn’t have the time, money or energy to go to the HRIS solutions at the big end of town, so we built something that was tailored to our needs – and not someone else’s interpretation of what they think we needed,” says Beel. The solution needed to leverage the company’s existing investments in technologies.
Cement Australia wanted a fully integrated and automated HRIS, including leave management, ordering cars, remuneration, employee benefits, payroll, superannuation, employee self-service, recruitment, employee relations, organisational charts, preferred supplier management, learning and development, and performance management, as well as web (intranet) usage analysis.
Frank McManus, vice president and director of people resources at McDonald’s, says that restaurant operations have become more complex as a result of menu enhancements and regulatory compliance over the last ten years. During that time, McDonald’s has been actively pursuing a goal of process simplification. “Over the same period of time, Australia has experienced its lowest unemployment rate in history. Our employment competitors gained ground on us, further reducing our potential applicant pool,” he says.
Following a review of HR processes and taking into account some independent research into its Gen-Y demographic, McManus and his team knew there was an opportunity to realise some efficiencies in their hiring processes, as well as to provide accessible information in a format relevant to its Gen-Y target audience.
If you build it
Cement Australia had a team of four (two HR and two IT) people review the accumulated plethora of HR policies and processes from the merged companies. Led by Sonia Pitt, HR and workers compensation manager, the team had to clean up the data classification inconsistencies and re-engineer and standardise all HR policies and procedures. This process took 12 months and Beel says they understood the processes much better as a result.
All 10 of the off-the-shelf solutions they bought bolted on to Cement Australia’s existing system. IT used the tools to pull all the information out of the system, “turning our vision into practical solutions.” says Beel. “Once we knew everything could be fully automated, HR insisted it be made visually pleasing and user-friendly so that people would want to use it.” They christened the portal ‘RAFT’. The result is a one-stop shop for accurate and up-to-date HR information that Beel believes is “future-proofed” against the ongoing demands for self-service and increasing client needs.
They first launched RAFT 18 months ago when about 60 per cent of the planned final system was available. A system called ‘What’s New?’ sends fortnightly updates to all employees telling them what new functions have been added to RAFT. The system has been built up incrementally since then. Beel says they are now 95 per cent complete.
McDonald’s began the process of commissioning an e-recruitment, e-communication and e-learning tool in late-2005. “We looked around the McDonald’s world and found nothing that suited our needs. McDonald’s Australia is recognised as being the most innovative organisation within the worldwide McDonald’s group. We weren’t prepared to wait and see what developed globally,” says McManus.
Although only 30 per cent of the McDonald’s restaurants in Australia are directly owned by the company, it was prepared to introduce the system they christened ‘metime’ in just these restaurants. However, McManus presented the concept to franchise owners before development began.
“They all saw the system as positive, knowing what a competitive labour market we were in. They acknowledged the benefits of implementing a tool that gen Y would feel comfortable using and agreed to implement the system through all franchises,”says McManus, who was pleased it was accepted. “We really needed it to be implemented nationally across all our restaurants for the applicants’ sakes,”he adds.
A small company won the tender to create the new system for McDonald’s Australia. “We needed someone prepared to work with us and develop something that suited our needs. We didn’t want a system that had already been developed. It had to be very user-friendly and unique to McDonald’s,” says McManus.
The goal was to create an end-to-end online solution that allowed applicants to apply online, be assessed and selected online, then undergo online orientation and induction before they commenced their first shift. All applicants have face-to-face interviews that they organise by selecting a space in the manager’s online diary.
“Although this system achieves time efficiencies and is attractive to gen Y, I think its greatest attribute is that it is a fairer system, because it brings a consistency to the treatment of applicants across all restaurants,” says McManus.
Once an employee is hired, their details are automatically transferred from metime to eBOS, the restaurant back office system that manages payroll and rostering, eliminating the potential for administration errors, as well as saving more management time.
Beel says the initial launch went well. “We had a reasonably receptive group who were prepared to give it a go. They gave us a window of opportunity to do it well, but we would have been punished if we’d screwed it up,” he says.
There was no intensive deployment process through Cement Australia. Handouts on the system were available to all staff and they used the tool to educate people as they needed to use it. HR ran workshops at each site, but Beel says because the system employs drop-down choices, it is very intuitive to use.
When applying for funding for the system, Beel requested an initial amount, knowing the project would run to a second phase, which is currently being implemented. Phase two consists of improvements requested by customers.
Having implemented significant infrastructure, policies and roles, HR now began shifting its own role in Cement Australia from being state-based HR generalists to national functional specialists. Beel says the shift will continue towards becoming business change agents.
At McDonald’s, the project team made up of IT, payroll, HR and training developed the new platform and moved it out into all the different markets via 2–3 hour sessions for 10–15 restaurants at a time. The project team won a Circle of Excellence award from their US parent company, presented to initiatives or programs that contribute towards the success of global strategies.
McDonald’s Australia has also run this project out in several phases. “There are always enhancements that can be added. We’re now in phase three, logging all the areas of improvement suggested by the users. For example, the company is looking to develop an online recruitment platform for managers as well as add to its e-learning functionality.
Return on investment
Before getting the green light for this project, Beel had to present a business case to Cement Australia’s executive IT steering committee. “My boss always asks three questions. How much do you want, how long is it going to take and what am I going to get for it? Our company requires any investment to result in a 4:1 ROI,” he says. This means that for every $1 spent, $4 has to be reflected in the bottom line over a three-year period. “I believe we have met this target. Our business analyst has quantified the cost and time savings across the business, including wages, inefficiencies, paper, opportunity cost etc,” says Beel.
At McDonald’s, McManus has calculated an ROI in the first year of 486 per cent, based on the cost of management time saved during the whole process. “Using the platform has reduced the average management time per hire to just 41 minutes. This includes ad placement, screening, organising interviews, correspondence time, orientation and induction. This represents an average management time saving of 539 minutes per month or more than 81,000 hours system-wide per year,” he says.
One other major benefit that has occurred in the organisation is the growth of the talent pool available for traditionally difficult-to-staff restaurants. “We used to have trouble recruiting for our freeway and airport restaurants, because people wouldn’t usually drive out to ask if there were job vacancies there. Now we have waiting lists for people wanting to work in these locations,” says McManus.
Tips on improving e-HR
Beel advises organisations around the same size as Cement Australia to buy off-the-shelf systems that can bolt on to their core database. “HR’s role then focuses on how it should be delivered to suit the customer. You must have the conviction to know what is right and make sure you avoid distractions and see it [these types of projects] through.
He also advocates investing in software that can count who is using what on the system. “If you know you have had 50,000 hits on a particular page that used to involve printing out forms and having them manually approved, you can validate your investment,” says Beel.
McManus says it is important to tailor solutions to suit your business. “Because e-recruitment suits entry-level positions, you should start there and build on to the system as required,” he says. One of the side effects of installing this e-recruitment solution is that it has been a very effective way to communicate information about the business to applicants. “They have become more confident at the interview when armed with the knowledge and they know what is expected of them,”notes McManus.
He also insists that any recruitment system integrate with payroll and not be a stand-alone program. McDonald’s Australia’s metime has been so successful, that it has already been rolled out to Singapore and New Zealand, with other countries to follow.