Online HR cuts retailer's costs by £3m

Safeway has cut human resources-related costs by £3m since moving its HR operations online 12 months ago, the grocery retailer...

Safeway has cut human resources-related costs by £3m since moving its HR operations online 12 months ago, the grocery retailer revealed last week.

The company, which has 480 stores across the UK, expects the 40% saving to be repeated annually.

Using the Internet-based human capital management application, from software provider PeopleSoft, all HR matters are dealt with in real time rather than being delayed for up to two weeks as in the past, said Jeremy Wyman, business systems manager at Safeway.

"Take, for example, sickness reporting," he said. "Previously, it was paper-based and then keyed in at the back office - a process that took about two weeks. Now it is two or three clicks on a browser and all the information is readily available, which makes contingency planning much easier."

A key benefit of the software is that it can run on Safeway's in-store radio frequency networks, Wyman said. "This means a manager can connect to the software via a mobile device and access HR information immediately," he said.

Automating HR processes can provide a real return on investment for companies with high employee turnover, said Tony Hart, managing analyst at research firm Datamonitor.

"Retailers have a high turnover of staff so automating processes such as enrolment can provide real 'hard dollar' value by cutting down administration costs," Hart said. "There is also the security aspects, such as turning off e-mail access and credit cards for ex-employees."

The success of the human capital management implementation means Safeway has decided to roll out PeopleSoft's financial management package to integrate the separate aspects of its financial operations, Wyman said.

"Once you see a method working well it is easy to justify other modules," he said. "There is also a strong argument for installing common systems across the back office as controlling the architecture becomes much easier."

The Safeway board is very keen on real-time financial reporting. "Board members already get sent an SMS message twice a day with sales figures so this is a natural progression," he said. "Information about, for example, how much cash is in the safe at any given time can be vital."

The financial management software, which includes procurement and purchasing modules, will be fully installed by next autumn, Wyman added.

Some industry experts have questioned how real time a retail operation needs to be, pointing out that a lot of information reporting works well on a batch basis.

However, Wyman disagreed, "Real time has got to be better than history."

n PeopleSoft's human capital management software is being included at the core of the e-HR component in IBM's Dynamic Workplaces initiative.

Case for implementing online HR software
  • Real-time reporting of sickness and holiday aids contingency planning

  • Automation produces real return on investment with high turnover of staff

  • System works via Safeway's in-store radio frequency networks.

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