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Transforming an HR department through self-service technology

Published in the Rochester Business Journal

Ninety-five percent of finance executives, when surveyed last year by CFO magazine about the key factors contributing to their business’ success, listed human-capital management among the top two or three. And what would boost the performance of this asset? Forty-nine percent of respondents cited increased use of technology.

To thrive in today’s competitive climate, organizations can no longer afford the costs and limitations of labor-intensive manual HR systems that contribute nothing to the performance of their human capital.

And, as proactive human resource professionals move to take on farther-reaching, strategic roles in their companies, they also must find ways to decrease the time and attention traditionally devoted to administrative and other routine tasks.

For decades, companies of all sizes have used automated payroll services to reduce the time required for routine tasks. As other HR information systems – including employee and manager self-service software – become popular, larger companies are the first to adopt them and reap economies of scale. More recently, as technological advancements and demand for such systems increase, they have become more affordable and practical for small and medium-size companies.

Self-service technology: Improving the delivery of HR services

Every day across America, HR staffers help employees replace mislaid pay stubs and W-4 forms, or change records regarding state and federal withholding, benefit deductions, direct deposits, employee addresses, emergency contacts or marital status. In a midsize company, dozens of such changes may need to be input manually before payroll can be processed. When employees visit the HR department and interrupt staff with such requests, 15 minutes may be taken up in exchanging pleasantries, finding the appropriate forms and discussing the changes – resulting in 30 minutes of lost productivity for the company.

But self-service technology offers a more efficient and effective approach to routine HR and benefit transactions. With self service, employees and managers perform basic transactions on line that were formerly completed on paper forms and then manually processed by HR staff – a cumbersome, limited-access process subject to delays and errors.

Employee self-service (ESS)

Once prevalent only in larger corporations, ESS is now available and affordable for smaller to mid-sized companies. ESS typically relies on a web-based, user-friendly solution to provide employees – whether on site, at home, on the road or across the globe – with round-the-clock access to critical information.

When implementing an ESS, the HR project manager determines which data employees can view and update, and which data can simply be viewed on line. Updatable information would include:

  • benefits selection, including open enrollment
  • addresses, phone numbers and emergency contacts
  • education and skills
  • licenses and certifications
  • direct deposit information
  • federal and state withholdings
  • professional memberships

View-only information would include electronic pay statements, employee handbooks and employee directories. Further, employees can use the system to submit time sheets, expense reports, vacation requests for approval, and to enroll in corporate training.

A self-service system encourages each employee to take responsibility for his or her own information. Errors are minimized when an employee inputs his or her own data rather than relying on a third party, and the time and costs involved in handling and mailing paper forms are greatly reduced.

In organizations where some employees do not have daily access to a computer, kiosks can be set up in common areas and users easily trained.

Manager self-service (MSS)

For managers, self-service systems are particularly appealing because they offer additional tools. As employees, managers can view and update their personal information, but they also may access performance reviews, salary budgets and compensation histories for their direct reports, and may view and update transfers and promotions, performance appraisals, terminations and pay increases. Most MSS systems also provide applications for compensation planning and recruitment.

To ensure the security and smooth operation of self-service software, employees and managers are assigned varying access rights based on position in the company, department and key job functions.

Reduced costs and increased user satisfaction

Companies with successful self-serve systems save money by employing fewer HR staff per employee. The Hunter Group’s 2000 Human Resources Self Service Study found that companies using self service were employing one HR staffer per 151 employees versus one staffer for 99 employees in companies without self service.

In smaller, already-lean companies, it may be difficult to reduce headcount simply by installing a self-service system. But automating routine functions allows the HR department to redirect its time and attention to tasks more significant to the organization’s larger goals.

Advocates of self-service also note that many employees prefer the ease and convenience of printing or forwarding their data electronically, for example, when working with a personal accountant or financial planner.

And some employers are saving additional money by eliminating printed electronic pay statements, benefit statements and direct deposit stubs; instead, employees simply view them online, and print them if they choose.

HR as a strategic function

How important is it for HR departments to use technology to free up time to devote to tasks with a greater return on investment?

At present, HR departments spend only 28 percent of their time on high-payback tasks such as designing HR programs and engaging in strategic partnering, while devoting 72 percent of their time to delivering HR services, compliance, transactions and recordkeeping, according to a 2004 survey by Mercer Human Resource Consulting.

As self-service systems deliver on the promise to save the HR department time and to gather and massage data in valuable new ways, executives will find HR professionals providing new higher-level initiatives such as workforce analyses, talent management initiatives, staff development and retention programs, performance management and total rewards programs – all of which will support the company’s growth and competitiveness.


© HR Works, Inc.

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HR Works, Inc., headquartered at 200 WillowBrook Office Park in Fairport (Rochester), New York, with an office in East Syracuse, is a human resource management outsourcing and consulting firm serving clients throughout the United States. HR Works provides scalable strategic human resource management and consulting services, including: affirmative action programs; benefits administration outsourcing; HRIS self-service technology; full-time, part-time and interim on-site HR managers; HR audits; legally reviewed employee handbooks and supervisor manuals; talent management and recruiting services; and training of managers and HR professionals.