Buyer’s guide to self-service systems (April 2009)

Self service HR is helping to reduce administration but must be controlled carefully, says Nicola Sullivan

What are self-service HR systems?

Self-service HR systems allow both managers and employees access to a variety of electronic information and data relating to a variety of areas, including pay, holidays, expenses, performance and absence. Such systems also enable authorised employees to request holidays, submit expense claims, and change their personal details via an online portal.

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Who are the main providers of self-service HR systems?

ASR, Cerdian, Cezanne Software, ICS Computing, Frontier Software, Midland HR, Northgate Arinso, Oracle, SAP, Sage HR and payroll (owner of Snow Drop and KCS), TeamSpirit, Visual HR.

Where can employers get more information?

For articles go to www.employeebenefits.co.uk/benefits/benefits-administration.html

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Self-service HR systems can be incorporated into central HR and payroll functions to enable both employees and managers to view and alter information and data relating to various areas, including pay, holidays, expenses, performance and staff absence. At its simplest, a self-service system allows staff to amend their personal details, such as address, bank details or phone number, electronically. More complex systems can be used to manage performance appraisals and flexible benefits. Self-service systems are also used to report sickness absence, book annual leave and process expenses.

Jonathan White, new business sales manager at Sage HR and Payroll, says: “Self-service as a concept has been available in its basic form for five or six years. Initially, self-service systems were fairly simplistic and limited in what employees and managers could do through the self-service portal.

‚ÄúMore recently, maybe in the last couple of years, self-service has moved towards online expense claims. Something that is quite new, and an area that is going to grow quite rapidly, is online flexible benefits.‚ÄĚ

Self-service systems reduce the need for laborious paperwork, as well as often expensive and time-consuming administration processes. They also enable managers to collect management information data, such as that relating to sickness absence. For example, employers can implement systems that not only allow staff to notify line managers of their absence by logging details of their illness online, but also alert line managers to any patterns of absence among the workforce. Triggers such as stress or back problems can also be identified and be used to drive an employer’s future provision of healthcare benefits.

Self-service systems can also give managers an overview of an individual employee’s performance and salary history, which can help them conduct staff appraisals. Similarly, some systems can provide an overall picture of which members of a team, or the workforce as a whole, are on annual leave or off sick at any one time, helping managers to plug any staffing gaps more easily.

‚ÄúBefore self-service came along, all these pieces of information just weren‚Äôt available to anyone outside HR and payroll,‚ÄĚ says White.

Clear understanding

To maximise the effectiveness of a self-service system, employers must have a clear understanding of what they want to achieve by implementing it, says Steve Foster, business consultancy manager at Northgate Arinso. ‚ÄúEmployers need to understand what the problem is that they are trying to solve,‚ÄĚ he says. ‚ÄúDon‚Äôt just do it because it looks great to have self-service. What are you trying to do – cut the cost or improve the quality of the service you are providing? ‚ÄúMostly, the business case is around saving costs from reduced paperwork. The ultimate reason for that is it needs fewer people sitting in HR doing administration.‚ÄĚ

Also, employers must be careful about the levels of authorisation they give managers and staff to access and change data. For instance, it would be inappropriate for employees to process expense claims directly without proper authorisation from managers. Another, albeit extreme, example would be if managers were able to terminate employees’ contracts online, which, of course, would raise a raft of legal questions.

The cost of self-service HR systems can vary considerably, depending on the size of the organisation, the depth of functionality required and the number of users. At the bottom end of the scale, systems can cost about £2,000, whereas at the top end, they could cost between £15,000 and £20,000