Even as e-commerce start-ups are setting records on Wall Street, a parallel revolution is taking place within corporate walls. Companies such as MCI WorldCom, J.C. Penney, Paymentech and Texas Instruments are moving human resource services on-line via intranets, which use Internet technologies to distribute information and communicate with employees over a company’s internal computer network.
At MCI WorldCom in Richardson, Texas, for instance, employees can sign up for health benefits or view their paycheck stubs on an internal site if they use electronic deposit. They can check their 401(k) or stock options. Managers send employee evaluations and raise recommendations up the corporate ladder for approval with a stroke of a key.
In one year, the number of large U.S. companies moving self-service human resource functions to secure intranet sites has doubled, said consultant Watson Wyatt Worldwide.
In 1998, 50 percent of companies surveyed had moved some human resource services on-line. The year before, that figure was 27 percent.
“We’re now at the point where the technology is sophisticated enough,” said David Nelson, group executive, human resources for Paymentech in Dallas, which rolled out its self-service human resource site in April.
Companies cut mailing, printing and labor costs, and employees seem to like the convenience, executives say.
More important is the potential to free human resource staff for key tasks such as recruiting and retaining top talent, said Mark Gottfredson, director in the Las Colinas, Texas, offices of consulting firm Bain & Co.
“I think the opportunity is there, if the HR world is willing to accept it. As the paperwork demands and the normal workload is decreased, you can move the HR function to a more strategic one,” Gottfredson said. That’s particularly important in a service economy that increasingly depends on human capital, he said.
At J.C. Penney, the aim was to streamline back-office functions for individual store managers who administer employee schedules, vacations and the like, said Jim Sciano, manager of human resource systems for the Plano, Texas-based retailer.
“Our real effort was to reduce the administrative work and focus on things more important, like selling merchandise,” he said.
Because Penney’s sales personnel don’t work on desktop computers, the solution was to place kiosks with computers in break rooms. There are also kiosks where job seekers can apply and take screening tests.
One recent Friday, Louise Hamm, who sells lingerie at Penney’s Valley View, Texas, store, was pulling up next week’s schedule and printing it.
“It’s real easy, and I’m an old person who doesn’t use a computer,” she joked.
Hamm also uses the system to check her time off. It allows employees to update their personal information such as address and telephone number and set up or change direct paycheck deposit.
The next step is a smart system that will automatically schedule sales staff based on high traffic volume from the prior week, said store manager Gregg Carroll.
Sciano won’t disclose cost savings, but he said Penney cut administrative costs for those functions by two-thirds. Some staff cuts resulted, he said, but most were deployed elsewhere at Penney.
Not everyone took to the computers immediately.
“I had one man who held the mouse up in front of the screen to click it” like a remote control device, said Rhonda Morgan, a customer service supervisor who trains employees at the Valley View store.
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Still, they learned fast, and acceptance has been high, Sciano said.
“It was one of our biggest fears going in, yet one of our least problems.”
At MCI WorldCom, about 10,000 of 50,000 or so employees chose their health plans on-line the first year they could do so. A year later, the figure was closer to 40,000, said Dan Toohey, manager of sensitive data development.
A similar system at Dallas-based Texas Instruments Inc. is already paying dividends by freeing human resource staff for weightier duties such as redesigning compensation, said Melendy Lovett, vice president for compensation and human resource services.
One big payoff: In 1997, TI redesigned its pension plan to better compete for technical workers. Using the intranet to let each employee calculate his or her own preference (new plan versus old plan), the redesign and change was accomplished in 10 months, she said.
Employers should make sure sites are easy to use, said Shel Holtz, a California-based consultant on communication and technology.
“I deal with some companies who think, `If you build it, they will come.’ For this type of thing, it’s only `If you build it right, they will come,’ ” he said.
There’s little doubt that the new technologies will dramatically change human resource departments in most companies, said Ed Lawler, director of the Center for Effective Organizations at the University of Southern California.
“If HR manages this well, it will allow them to become more of a business partner,” he said. “However, if HR isn’t up to the task of giving expert advice, it will essentially go away.”