According to another survey conducted by the research firm of Towers Perrin,  businesses that have utilized Web self-service and knowledge based human resource tools have shown 100% improvement in administrative timeliness, 38% improvement in accuracy and workload was reduced by 50%. 

The following is a company saving analysis based on 1000 employees

HR Services

Estimated Current Annual Admin. Cost

(Source)
Cost Elements 

(SHRM) 17 hrs/ee/yr

HR: Orient & Enroll  

(SHRM) 2 hrs/ee/yr  

HRO HR Clerks.+ (23% in benefits/taxes)

$1200 per clock per location

(AON) $10 /ee/yr

$1,462,680

1000

Annual Gold Service Fee

Projected annual savings with the system installed   

$602,340 Net

• Reduce or eliminate the cost of printing and distributing pounds of paper (new hire packets, SPDs, company handbooks, open enrollment documentation, etc.)
• Reduce time processing paperwork (keying, faxing, sending, emailing, etc.)
• Reduce mistakes due to human error
• Reduce the number of claims errors/issues by working with clean data and faster eligibility turnaround
• Reduce the cost to carrier for processing paperwork
• No hardware or software costs

SOFT COST SAVINGS

• Increase time spent on plan design and communications
• Consistency in new employee orientation to reduce liability
• Consistency in training in various employment practice liability issues
• Create immediate access to your employee benefits data
• Enhance communication between HR and employees
• Reduce repetitive HR administrative tasks
• Improve employee productivity and satisfaction
• Reduce legal and regulatory exposure - stay compliant!
• Provide accurate information to the carrier
• Reduce the cost of handling routine employee inquiries through self-service

A study that was conducted by the Aberdeen Group shows that:

"Benefits cost the American employers approximately $2 trillion yearly. Companies characteristically spend between $1,000 and $1,700 per employee, per year for HR administration alone."

"Among the organizations surveyed, the six most commonly reported self service applications were benefits administration, compensation changes, recruiting and staffing, training administration, employment verification, and maintenance of basic employee data. These represented average three-year savings of $123,507 per 1,000 employees for organizations employing multiple technologies. Additional savings were realized in some organizations through electronic pay-stub distribution and computer-based time and attendance reporting (respectively, $17,973 and $67,026 per 1,000 employees over a three-year period)."

The Hunter Group 2000 Human Resource Service Survey, which included 342 companies representing 6 million employees found: 

"Organizations continue to report success with their deployment of Human Resources self service capabilities. Over 90% report success in meeting their objectives. The results are compelling: 100% return on investment within a year; reduced headcount, transaction costs, and cycle time; and improved employee satisfaction."

Alfred J. ("Al") Walker, senior consultant with Towers Perrin and editor of the new book, Web-Based Human Resources (McGraw-Hill, 2001), sees much in store for the future of online HR. Among the observations Walker recently shared in a chat with Associate Editor Jill Elswick: Web-based HR will allow "mass personalization" of benefits communications, benefits professionals will delve more into plan-design strategies, and highly integrated systems will ease the total rewards concept.

            Think back to the last time you filled out mountains of paperwork for various benefits plans merely to change an address, add a dependent or switch insurance providers. Remember your employees attending open enrollment meetings, calling the HR department for additional benefit booklets, and applications. And the time it takes to keep up with cafeteria plan, 401k, and medical insurance premium deductions?

            How about those monthly chores such as keeping up with who is eligible for benefits and reconciling eligibility against the benefit carrier's billing. Not to mention the paperwork in managing Cobra, HIPAA and FMLA etc.

            That stack of forms is more than a nuisance. It is a big expense to the company. In fact, American employers spend an average of $13.89 per employee every month just to administer benefits paperwork. With online employee benefits processing, this cost can be slashed to $2, because data only has to be entered once. And staffers can be freed up for other tasks - resulting in dramatic improvements in the bottom line.

Real Company, Real Savings

• Lucent Technologies Inc., The company estimates it saved $1.2 million the first year it put SPDs online.

• Glen Brandow, an IBM spokesman "Web-based enrollment was just as attractive to the company, which saved about $1 million last year in costs associated with delivery of benefits information," Brandow says.

• Dell Computer replaced its legacy HR system with a fully web-native, self service core system for the US—at a fraction of the cost of most major core HR system projects. In the first year alone, this system saved the company $2.5 million.

• In 1999, HP began a strategic push to drive $1 billion out of its infrastructure costs. HR as a function was able to drive a third out of its direct expenses through a reduction in full-time employee headcount and shutting off multiple service delivery options. Since then, all of their continued technology deployment has been self-funded through cost savings already achieved.

• MITRE CORP., AN independent, not-for-profit company, provides federal agencies with system engineering and information technology expertise. Founded in 1958, the Bedford, Mass.-based company's more than 4,000 employees support four primary customers: the Department of Defense, the Federal Aviation Administration, the U.S. intelligence community and the Internal Revenue Service. (Mitre won a CIO Enterprise Value Award for the system. For more on the MII, see "Common Knowledge," CIO, Feb. 1, 1999.) In all, the MII has enabled Mitre to save $16.6 million in labor and material costs since 1996. The savings are allocated as follows: (human resources and administration ($5.6 million), information systems management ($2.9 million), financial operations ($3.6 million), technical operations ($2 million) and miscellaneous other services ($2.6 million).