Today, I had an opportunity to step away from the usual daily grind and attend the Quarterly IHRIM meeting.  Several of Atlanta’s best Human Resources and IT professionals  gathered at the Oracle office in Atlanta.  IHRIM is an abbreviation for the International Association for Human Resources Information Management.  From the IHRIM website, you’ll learn that its mission is “to be the leading professional association for knowledge, education and solutions supporting human capital management.”  There were two brief presentations and a time for networking during lunch.  One of the topics was presented by CherryRoad Technologies Director of Enterprise Services, David Downey.  David talked about how companies are able to utitlize Business Intelligence to support better business decisions.  One of the most disturbing points he made referenced a 2009 Gartner paper that “more than 35% of the top 5,000 global companies will regularly fail to make insightful decisions about significant changes in their business and markets.”

The goal of all companies should be to constantly strive to improve business performance.  But, each company must know what they want to measure before implementing a new plan of action.  Since I have spent over 10 years in the Human Resource function, I immediately began to think on the topic of metrics and how each Human Resource deparment should define specific metrics and determine new ways to streamline processes; One such process is onboarding a new employee.  Most companies mail a packet of information to a new employee to complete manually.  HR Administrative staff type up the offer letter, locate all of the required Federal and State forms, policies, etc, and spend upwards of $25 on Federal Express to send a new hire packet to the employee.  Once the employee completes the packet, which, by the way, will most likely result in errors, omissions and invalid forms, the payroll staff is responsible for entering the data into the HRMS.  Even after all of those tasks have been completed, the last step is to engage your HR staff yet again to file all of the information in the appropriate folders.  In the presentation material by CherryRoad Technologies, they defined how to calculate the cost per hire.  For your employees that are tasked with this manual process, take the annual salary plus benefits and divide by the number of work hours per year (e.g., 2080 hours).  Now that you have the hourly rate for the employee, you take the number of hours it takes one of your staff members to hire an employee and multiply by the hourly rate.  You are able to calculate the average cost per hire by determining all new hire costs per month and then by dividing by the total number of new hires.  For those companies with high turnover, the costs could be astronomical, as you may infer from the information above.

The solution is to completely automate your new hire paperwork by selecting a transactional onboarding vendor.  Many onboarding solutions on the market simply post PDF files to a portal and still require the employee to manually complete and return the paperwork.  However, the AllegroHR Onboarding application completely automates the onboarding process by engaging the employee in a wizard like application that collects all of the pertinent data, free of errors and omissions, to complete the required Federal, State, and policy forms.  Furthermore, AllegroHR Onboarding is able to consume data from most Applicant Tracking Systems (ATS) to pre-populate the employee onboarding screens and eliminate the need for duplicate entry of basic demographics and job information.  Once the onboarding process is complete, the employee data is then transferred through an automated file interface into the HRMS.  The ROI on this automation has saved some of Emerald Software Group’s customers upwards of $1 million dollars per year.  In summary, define the metric, calculate the existing cost, and set a plan of action to cut costs and you just might find your company reaping the rewards of a more efficient process.

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In a recent conversation with Chuck Ros, the CEO of Emerald Software Group, he reminded me of a survey conducted by the Aberdeen Group.  The survey concluded that the average cost of onboarding a new employee is approximately $110.  Coming from a Human Resource background, I was not at all surprised.  As a matter of fact, the figure seemed a bit low to me, but let’s assume for a moment that the Aberdeen figure is correct and attempt to determine the cost based on a few practical assumptions:

$28.50 – The Average Cost of Standard FedEx Delivery with every paper form that you could ever imagine and more!

$30.00 – Administrative cost associated with preparing the new hire package (i.e. typing the Offer Letter, gathering required forms, stuffing the envelope, requisitioning new employee items for the first day, etc.)

$15.00 – Administrative costs associated with data entry, employee records retention/filing, and error resolution.

$30.00 – Employees who complete manual paperwork and are not engaged in their core job function.

The sum of the individual costs above get us really close to the $110 total that Aberdeen researched and calculated.  My total does not even include the cost of possible fines from federal and state governments that penalize companies for a failure to collect valid forms.  Often times, these penalties come as a surprise to  companies who otherwise thought that they were complying with all of the legal requirements for each form.  My estimate also filters out the wasted time spent completing manual paper forms on the first day of work.

Now, I’d like to move on to the monthly and annual costs of onboarding a new employee.  Let’s assume that you are working for a company that hires 100 new employees per month.  If my math is correct, that’s a whopping $11,000 per month or $132,000 per year, just to onboard your new hires!  If you are a wise Human Resources professional, you’ll determine a way to reduce the costs associated with hiring a new employee. What if you could reduce the cost to $66,000 per year?  Companies are able to completely automate their onboarding process through a world class SaaS provider,  Emerald Software Group.  While most companies in the onboarding business emphasize the acculturation of a new associate, Emerald Software Group focuses on the transactional aspect.  For example, Emerald Software has a State W-4 Tax library for all 50 states and the District of Columbia.  In addition, the Federal W-4, Form I-9, and Form 8850, have all been automated.  By incorporating these forms into the paperless onboarding process, you can be assured that your Human Resources department will always have valid forms and steer clear from errors and omissions.  After a recent implementation with a client in all 50 states, an extremely excited HR representative sent us the following note and with this, I will sign off until next time:

“I can now leave at a decent time every day!  All of our forms are completed in record time and the employees are very complimentary of the AllegroHR onboarding system.  We spoke with several onboarding providers and none of them had the transactional capabilities that you have.  Your automated state tax library alone, made the project worthwhile.  Thank you!  Thank you!  Thank you!!!”

Effective May 1, 2009, the State of Arizona will require employers to provide the revised A-4 Withholding Form.  Senate Bill 1185 amended the amounts to be withheld for Arizona withholding purposes and the amounts will continue to be a percentage of the Federal Withholding.  A detailed explanation of the changes can be accessed by visiting the Arizona Department of Revenue website.

Hosted customers of Emerald Software Group’s AllegroHR Suite, will receive this update automatically.  Throughout the onboarding process, our software eliminates errors and ommissions by enforcing each state’s unique business rules.  Each state tax withholding tax form, along with the Federal W-4, are often completed incorrectly and have to be returned to the employee.  With the AllegroHR onboarding solution, the state and federal tax forms are always completed as valid forms.

The AllegroHR Suite automates the State W4 Form for each of the 50 states and the District of Columbia through UOB 2.0.  For an interesting article on this topic, check out Chuck’s Blog.

Acceptable Documents

Effective April 3, 2009, employers will be required to use the revised Form I-9 issued by the United States Citizenship and Immigration Services. The amended Form I-9 may not be used until April 3, 2009. The primary reason for the change is to further improve the employment verification process so that certain unauthorized individuals are not allowed to work in the United States. For more detailed information, employers may refer to the USCIS Handbook for Employers (Form M-274).

The changes to the Form I-9 are outlined below:

• Employers will no longer be able to accept documents with an expiration date.
  • This measure will deter counterfeiters from substituting an unauthorized user’s photograph in expired documents to obtain unauthorized employment.

Section 1

• Provides a fourth choice by making “citizen of the United States” and “noncitizen national of the United States, as defined in 8 U.S.C. 1408″ two separate categories.
  • The reason for separating the two groups is to “eliminate one difficulty that currently exists when prosecuting those who make false claims to U.S. citizenship.”
• Replaces the text “An alien authorized to work until –/–/– (Alien or Admission number ————-” with the text “An alien authorized to work (A or Admission —— —— ) until (expiration date, if applicable –month/day/year) –/–/–.”

Section 2

• List A Documents
  • Foreign passport that contains a temporary I-551 stamp or temporary I-551 printed notation on a machine-readable immigrant visa.
  • Forms I-688, I-688A, and I-688B are no longer used. These forms are no longer issued and have all reached the document expiration date.
  • Adds references to I-94A

• List C Documents
  • Replaces Social Security number card with “Social Security account number card”
  • Form FS-545 and Form DS-1350 are separated into two separate line items
  • Employment Authorization document issued by the Department of Homeland Security

Section 3

• Clarification to Reverification Policy
  • Reverification is not required for those employees whose work authorization does not expire:
    • Certain citizens of the Federal States of Micronesia or the Republic of the Marshall Islands
    • Asylees
    • Refugees

Emerald Software Group can help your company remain compliant with your Form I-9, as well as many other state and federal forms, through a completely paperless process with allegroHR.

Emerald Software Group is a world leader in business solutions based upon Business Process Management (BPM) technologies. The company’s Human Capital solutions include onboarding, employee lifecycle requisitioning, personnel change management, and employment verification services including integration to the Department of Homeland Security’s e-Verify program. The company also offers other solutions in Applied BPM. Emerald operates in both North America and Europe. Emerald Software’s website is www.emeraldsoftwaregroup.com.

Emerald Software Group is a leader in new employee onboarding systems. Customers often seek to maximize their opportunities to automate this critical business process; this blog identifies and describes the most common tasks within the onboarding processes—both transactional onboarding and acculturation—that customers have most frequently and commonly asked Emerald Software to automate.

Transactional Onboarding

The objectives of transactional onboarding are to achieve value by optimizing, perfecting, and controlling specific work tasks in the process of onboarding an employee. Tasks meeting these objectives fall into three categories: automating paperwork and forms, automating the flow of data, and ensuring compliance.

Automating Paperwork and Forms – These tasks replace paper forms with electronic data collection, sometimes completely eliminating the forms in lieu of strictly electronic data collection (sometimes referred to as “virtual forms”). The ability to electronically sign forms is important for many documents.  An onboarding system may be tasked with automating the Form I-9, State W-4’s, Federal W-4, Company Policy and Acknowledgement Forms, and the Form 8850.

Automating the Flow of Data – These tasks represent the near‐instant processing of data collected by the onboarding system into other systems or partner systems. Onboarding systems have the obvious benefit that data is collected in electronic form; significant value is achieved by eliminating costs associated with moving new employee forms, including cost of the forms themselves, shipping and postage fees, document latency costs, long term document storage costs, and especially the elimination of re‐keying data through integrating with other systems.  Onboarding systems are often integrated with HRMS Payroll, Applicant Tracking Systems (ATS), and Tax Credit Outsourcing vendors.

Ensuring Compliance – These tasks are often implemented as process improvement features when automating paperwork and forms, as most compliance issues concern completeness and accuracy of employee records, though certain industries may have compliance opportunities for automation with an onboarding system.  The failure to comply with state and federal requirements could cost a company thousands in fines.  Also, paper forms often have to be returned to the employee which takes additional time and resources away from completing a corporation’s core objectives.  The Federal W-4, I-9, and all state W-4 forms are prime examples of forms that all employers are faced with collecting and staying in compliance with.  With a hosted onboarding solution from Emerald Software, all of your Federal and State Forms are always up to date and follow strict business rules that eliminate the possibility of receiving invalid forms.

Acculturation Onboarding
The objectives of acculturation onboarding are to achieve value by accelerating an employee’s integration into the organization, referred to as assimilation, socialization, and indoctrination.  Acculturating an employee is by nature a far less objective and more loosely defined process when compared to transactional onboarding, practically impossible to build completely as an “off‐the‐shelf” system, but Emerald Software has established a framework for building an acculturation onboarding system (usually implemented as a portal, or as a section of the organization’s intranet) that achieves the organization’s unique goals.  Best practices tasks within an acculturation system can be categorized as:  orientation, adaptation, and connection.

Orientation – in this category of tasks, the acculturation platform offers information to the new employee that provides a basis of orienting them to their new job and working environment.  Orientation is ideally achieved dynamically, with the system adapting to the new employee as they work through the acculturation process.  Welcome Messaging, information on the new employee’s job, and information regarding the new employee’s coworkers, are all examples of orientation.

Adaptation – these tasks of acculturation onboarding are intended to guide an employee into their new role. Even with a job that is generally universal and with an experienced candidate, there may be unique approaches, perspectives, and strategies that the employee must adapt to; often adaptation is associated with training and gathering feedback from the new employee.  Access to job training materials and employment surveys are often associated with adaptation.

Connection – these tasks of acculturation onboarding serve to help the new employee develop interpersonal communications and relationships within the company. Much is being written today about the use and value of social networking for the enterprise, as this is an ideal way of accelerating the establishment of interpersonal relationships.  With Web 2.0 technology, employees are able to get connected with both the organization and fellow associates by using these vital onboarding features.

In summary, implementing an acculturation and/or transactional onboarding system depends heavily on the organizational requirements.   Each organization should establish priorities regarding their objectives and plan their onboarding implementation accordingly.  Emerald Software Group has a long history of helping companies meet and exceed their objectives through the art and science of onboarding; acculturation and transactional.

Emerald Software Group, a leading publisher of business process driven workforce management solutions,recently announced the release of version 2.0 of its Universal Onboarding product. The new version incorporates more business rules and logic for state tax requirements, provides more options for integrating with companion HR systems such as recruiting and HRMS, introduces new features for generating offer letter templates, and offers more features in federal employment verification among many new capabilities. Emerald Software’s Universal Onboarding, or UOB, is designed to meet all the universally common transactional onboarding requirements for employers in the United States; Emerald also offers employee onboarding capability for other countries and in any language supported by browsers.

Learn more at
http://www.emeraldsoftwaregroup.com/Onboarding

Many companies today are starting to realize the importance of automating the onboarding process.  However, the current economic condition has some companies terminating more employees than they are hiring.  Whether the termination is voluntary or involuntary, every company must follow a set of guidelines for successfully offboarding the terminating employee.  For example, certain employees may have company property, such as, laptops, blackberries, office keys, company credit cards, etc.  In my previous blog, I touched on the allegroHR Staff Service Request (SSR) and how items may be requisitioned for new and existing employees.   Once the Personnel Change (Termination) is submitted through the allegroHR Personnel Action Notification (PAN) system, email notifications are sent to internal business owners based on the items that are in the terminating employees’ possession.   Once these owners receive the notification, they are able to work with the employee or employee’s manager directly to collect all items that need to be returned.

I would venture to say that many companies have a long standing tradition of collecting paper forms or Termination Checklists.  Many of these forms must be signed by multiple employees and almost always require fax or snail mail, especially when working in a centralized Human Resource department with many locations.  With the allegroHR PAN application, a manager is able to submit a termination from the allegroHR portal or the existing HRMS portal.  Once the termination is submitted, the workflow process routes the request through all of the reviews and approvals until the action is completed.  To reduce data entry errors, data from the PAN system is easily integrated into a company’s existing HRMS.  By taking advantage of this technology, companies are able to realize a high ROI by increasing efficiencies and remaining compliant with regulatory requirements.  To find out more about PAN Terminations and Offboarding, visit the link on this page.  As always, feel free to leave your comments and questions.

This afternoon, I had the opportunity of spending a few hours with several Human Resources professionals at the local IHRIM event in Atlanta.  These events attract those that are in a HR Technology role and whose primary function is to improve HR processes and to act as a liaison between HR and IT.  Professional speaker, author, and corporate culture expert, Larry Johnson, was the main attraction.  His message was about the infamous “C” word.  That’s right!  You guessed it — Change!  If any of you have bought a new home, gotten married,  or had a child, you really know what change is all about.  Furthermore, those of you that have implemented a new HR system or migrated to a new version of your existing HRMS, are sure to know what “change” is all about.  Perhaps you are even considering implementing a paperless onboarding solution.  Larry went on to describe how we all go through various stages during a major change: excitement and fear, disillusionment, frustration, and finally, integration and effectiveness.  Next, the speaker provided a formula that really made a lot of sense and should be applied to any type of change we are contemplating.  Let’s consider the following variables:

P1 – the pain of continuing with the old way

P2 – the pain of continuing with the new way

P3 – the pain of the journey

If P1 + P2 > P3, then change is necessary.

This thought process should certainly weigh into your decision to invest in an onboarding solution.  Consider the pain (P1) of the following paper intensive onboarding process:

• Typing an Offer Letter from scratch or in MS Word and having to print the completed form.  Multiply this step by x number of hires per year.
• Returning invalid W-4’s, I-9’s, and state withholding forms to your new employees and the re-entry of such forms into the HRMS.
• Spending $50-$100 dollars per new hire to prepare the new hire onboarding packet: fulfillment costs, mailing costs, and potential omission of certain required forms.
• Having your new employee spend 3-4 hours completing new hire paperwork through a paper intensive process.
• Data entry costs and costly errors.
• The loss of productivity and less than satisfactory acculturation of a new employee.

Next, let’s consider the new way and the pain (P2) of not having a paperless onboarding solution:

• An automated, paperless process with an Offer Letter generator.
• A perfect data package that enforces business rules on the I-9, W-4, and state withholding forms.
• Enter data once and populate many HR forms.
• An interface between the Onboarding system and your HRMS that eliminates data entry.
• A chance to meet the awesome team at Emerald Software Group.

After carefully reviewing the P1 and P2 bullet points above, you should ask yourself this question — Is the sum of the pain (P1) of continuing with our paper intensive onboarding system and the pain (P2) of not having a paperless onboarding solution, greater than the pain (P3) of the status quo?  If so, it’s time for a change and Emerald Software Group’s AllegroHR Product Suite is the answer.

In October 2004, President Bush signed Public Law 108-390 which for the first time authorized employers to store Employment Eligibility Verification Forms (Forms I-9) in an electronic format. The law took effect in April of 2005 and employers began to manage their Forms I-9 electronically. There are many reasons why a company should choose an electronic I-9 over a paper process. Those reasons have been listed here:

• Forms may be easily accessible through a secure internet connection
• Business rules are enforced to prevent Employees and Employers from completing invalid Forms I-9
• Employers with multiple sites may easily monitor the compliance of the Form I-9 at remote locations
  
• An integration with the Department of Homeland Security (E-Verify) can be setup to verify each employee’s eligibility
• Automatic purging of records that are no longer needed (3 years after the date of hire or 1 year after termination, whichever is greater
• Some systems, like Emerald Software Group, allow for reporting on visa and I-94 Expiration dates
• Last but not least, the electronic I-9 is more easily searchable. You’ll spend less time digging through the filing cabinet and more time making sure your I-9’s are compliant.

During the past 10 years I’ve spent in Human Capital management, I’ve noticed that most companies do a less than satisfactory job of requisitioning items for a new hire by their first day of employment. Most of these same companies rely on manual processes to ensure that all of the requisitioned items are ready by the hire date. I recall speaking with a VP of HR recently and I quote: “Jay, one of the most important objectives of our department is to make sure that EVERY new hire has EVERYTHING they need on the first day of employment.” His sentiments regarding this matter are very true. Research has shown that employee retention rates are much greater when new employees have a favorable first impression and as a result, productivity surges, as the employee is equipped with all of the materials they need to accomplish the duties of the job.

Think for a moment about your first day on the job for the company you are currently with. Was your network access setup and login information provided? Did you have an email address? Did you even have a computer or laptop on your first day? I think you get my point — most employees often do not have these critical items by the first day of work, and when this happens, your company loses credibility, the employee retention rate is reduced, and the overall productivity of your new employee is hindered. However, a solution to this problem can be discovered through the use of requisitioning software, such as Emerald Software Group’s Staff Service Request (SSR).

The AllegroHR Suite’s Requisitioning application, Staff Service Request (SSR), is the world’s only life-cycle requisitioning application designed for the specific needs of human capital and workforce management. SSR allows your managers to requisition items for their employees as early as the approval and creation of the open position, and for the life of that position. Once items are requested, owners of the respective groups are notified and the items are filled by the employee’s first day. When the employee arrives, all items have been requisitioned and filled, leaving your employee with a great first impression and equipped to do the job. Those companies that invest in SSR are increasing retention and productivity by Requisitioning the Right Way.