HR On Demand: Lowering cost through software

In fact, very little in the human resources area is left for HR professionals to do—so little, that the company manages all HR functions with only two full-time HR professionals, who spend most of their time with high-touch issues like employee training and coaching, dispute resolution and resolving other employee issues.

All other HR-related matters are handled through hosted, self-service, Web-based systems. For performance management, such as goal-setting, performance evaluations, compensation and individual development plans, LifeLock employees and managers access SuccessFactors’ SuccessPractices performance and talent management system. For applicant tracking, candidate sourcing and hiring, LifeLock uses Advanced Personnel Systems Inc.’s SmartSearch. And for benefits management, the company uses ADP’s HR/Benefits Administration Service, which reconciles and audits insurance carrier invoices and synchronizes benefits administration with payroll.

“In today’s HR world, we are moving away from paper and have to be more strategic because we’ve gotten leaner and meaner, and that means we need to add more value to the organization,” said Christian Graca, LifeLock’s director of human resources. “So we went to a hosted model where [everything] is in the hands of manager and employees. At any time, managers can see where their employees are compared to their goals, and managers can do the same. Employees can sign up for benefits by themselves, and I can post jobs and track applicants from one central location.”

LifeLock is doing what more and more mid-sized companies are doing—turning to hosted or on-demand HR and talent management systems to lower costs, reduce overhead, and provide self-service opportunities for managers, employees and candidates.

These organizations want easy-to-use, easy-to-buy solutions in a model where the vendor implements and operates a unique and separate instance of the technology platform at its facility for each customer. And the market is complying, said Leighanne Levensaler, principal analyst for talent management at Bersin & Associates, an Oakland, Calif.-based learning and talent management research firm, with a growing number of hosted offerings.

What LifeLock has done—adopt a talent management suite, and then add other hosted HR capabilities like benefits management and recruitment—is what more and more midsized companies are doing, Levensaler said. Other popular hosted talent management suite vendors include ADP, Ultimate Software and Lawson; typical modules include workforce planning, recruitment management, career management, succession planning, and compensation and rewards management.

Costs tend to be lower than systems maintained in-house, Levensaler said. Although there can be up-front implementation fees, the standard pricing is per user, based on the functionality used. Return on Investment tends to be good, she said, because of performance and corporate efficiencies gained.

That’s certainly what Graca found.

“We can do everything with two full-time HR people managing a 350-person organization that’s growing. Without a system like this, I’d need at least one more full-time HR person, which would cost us at least $40,000 per year.”

Efficiency and motivation are other hidden cost-savers. “At the beginning of the year we set organizational goals for the organization, and using SuccessFactors’ system, each employee can see what those goals mean for his operational area and for him specifically,” Graca explains. “So the employee and the employee’s manager can quickly see how well the employee is meeting his goals.” That information can both motivate the employee and prompt the manager to take action, she added.