World-Class Companies Use I.T. More Effectively For HR - InformationWeek

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World-Class Companies Use I.T. More Effectively For HR

Walk into Starbucks and you might see a Carlson Cos. employee, between latte sips, change her health plan on a laptop wirelessly connected to the company's server through a VPN. She's among the hospitality provider's 37,000 U.S. employees who can change their benefits online, from their office, hotel, or a Starbucks.

Companies like Carlson that run world-class human-resources operations spend about the same amount on IT per employee as those with more humdrum operations, according to research the business-advisory firm Hackett Group released last week. But, the world-class companies spend 27% less per employee on HR overall.

Technology Leverage, pie chart

More proficient IT use lets these companies operate with 35% fewer HR employees, while still providing improved productivity and strategic alignment across the enterprise, the study says. "There hasn't been a day in which someone doesn't walk up to me and say, 'Greg, it only took me five or 10 minutes to change my benefits plan, not the hours or days it took before,'" says Greg Peters, Carlson VP for HR shared services.

Other IT changes driving HR efficiencies at Carlson: an ASP--Peopleclick Inc.--recruits employees and a knowledge system lets non-HR staffers address personnel inquiries, freeing HR for more strategic matters.

World-class companies have a different attitude toward technology than the average company, says Stephen Joyce, Hackett HR practice leader. "They understand it better and work hard to ensure that they derive as much value from it as they can," he says.

World-class companies spend $1,390 on HR per employee versus the average firm, which allots $1,892. For each 1,000 employees, these companies employ about 10 HR staffers, compared with about 16 in average companies. Top HR executives at world-class companies are 115% more likely to report to the chairman or CEO.

For this study, Hackett analyzed about 100 companies. To be designated world-class, a company had to score in the top 25% in efficiency and effectiveness.

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