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| Industry
News -Human
Resources/Corporate Recruiting |
| Unsettled
Economy Tempting Companies to Make Shortsighted
Cuts in Human Resources Rather than Focus on Deeper
Issues |
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ATLANTA,
GA, March 14, 2002 -- Hackett Best Practices, a
part of Answerthink, Inc. (Nasdaq:ANSR), today announced
findings from the 2002 edition of its ongoing study
of best practices in human resources.
Considered the world's most comprehensive benchmarking
firm, Hackett Best Practices has tracked the performance
of nearly 2,000 global organizations and identified
key differentiators between world-class and average
companies across a diverse set of industries. Participants
in Hackett's studies comprise 80 percent of the
Dow Jones Industrials, two-thirds of the Fortune
100 and 60 percent of the Dow Jones Global Titans
Index. Global study participants include AT&T,
Citigroup, Dell USA, Delta Airlines, Dow Corning,
EDS, Hewlett-Packard, ExxonMobil, General Electric,
Northrop Grumman, Philip Morris USA and Lockheed
Martin.
In compiling its 2002 best practices trend data,
Hackett evaluated the effectiveness (quality and
value) and efficiency (cost and productivity) of
the corporate HR function across five performance
dimensions: strategic alignment with the business;
ability to partner with employees and customers;
use of technology; organization; and processes.
Significant best practices findings and trends include:
· The cost of implementing data standards
and ERP systems is more than offset by resulting
administrative efficiencies. Companies with enterprise-wide
consistency in data structures and an ERP system
spend 23% more on technology than average ($189
per employee annually compared to $154 annually),
yet with these enhancements they are actually able
to reduce total HR administrative costs by 38% (from
$732 to $453 annually per employee).
· Companies with decentralized, manual HR
process administration have administrative error
rates that are three times higher than at companies
with centralized, automated processes. The high
level of error rates at the former increases the
cost of HR transactions by an average of 98%.
· Perhaps the single most successful strategy
for reducing voluntary turnover is investment in
succession management and planning. Companies with
such programs in place have successfully reduced
voluntary turnover by 65%.
· Failure to deploy technology that enables
employee self-service raises health and welfare
administrative costs by as much as 69%. Thus companies
aiming to both reduce HR costs and deliver greater
value to their workforces would be well-advised
to make the investments in technology that allow
employees to access benefits options, obtain answers
to common questions and manage benefits online.
"It is no surprise that recent HR trends are
being driven largely by the need to control costs,
but the best practices approach is to make this
happen through process improvements and optimization
of HR technology and Web architecture, which enable
greater productivity and more efficient access to
information," stated Richard T. Roth, managing
director of Hackett Best Practices. "Instead,
our 2002 data paints a worrisome picture of mindless,
across-the-board cuts in headcount, even though
such behavior will slow companies' ability to rebound
once the economy improves, as it inevitably will."
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