A Healthy Result

Continued

Real Benefits to Employees

The immediate benefit of ESR for employees is the capacity to take control of their own careers. With ESR, they're able to access and modify some of the details in their personnel records, view pay slips, assess their own readiness for promotion, and browse and enroll in training opportunities. Managers have the same self-service capacity, enabling them to record transfers, promotions, and terminations; indicate contractual changes relating to employees; conduct online appraisal and development reviews; and handle other tasks that make them more accountable for and to their employees.

Accountability to taxpayers is another benefit of ESR. "We've seen health service funding grow from something like £35 billion a year to more than £90 billion a year over the last few years," says O'Connell. "It's a huge, huge investment, and we want to make sure the taxpayer is getting a decent return on investment. Functions become leaner, more efficient, and more productive, with savings that could be plowed into things that have an impact on the patients."

ESR is conservatively expected to save the NHS £119 million annually, reflecting savings in three areas. The largest sum, £92 million, is an estimate of savings if the NHS could reduce the overall sickness absentee rate from 4.7 to 4.35 percent. "When I worked for a local hospital trust as HR director some years ago, I managed to move the sickness absence down to 3 percent," notes O'Connell. "My view is that this will be very doable with the right reporting tools."

Savings from single data entry accounts for about £25 million per year. "This is just about having single data entry between HR and Payroll," he says. "It doesn't take into account the benefit of having a single data entry that will take you through to the Finance system, the Occupational Health system, or the Pension system, for example. That kind of integration will save even more."

The final £2 million stems from having a data warehouse that functions as a central repository when the NHS conducts its annual census of medical and nonmedical staff. An ongoing benefit that has not yet been quantified in financial terms is the savings that will result from having a central repository when employees move from job to job among the 600 trusts. Each year, about 150,000 new positions are filled within the NHS, with the majority of successful applicants coming from elsewhere within the organization. In the past, those employees were treated as new hires. With ESR, their employment records are portable and move with them, eliminating costly startup paperwork. An additional one-time savings of £18 million [US$36.6 million] reflects an estimate of procurement costs if each of the 600 healthcare trusts had to procure and implement its own HR system instead of using ESR.

Further savings are possible from future development of shared services. "One of the things that's currently being looked at, using ESR as an information platform, is assessing critical mass and overhead and possibly re-engineering processes with five or maybe three shared service centers," says O'Connell. "It's already happening in Finance. ESR gives us similar opportunities to radically change how we deliver back-office functions such as HR and payroll, at least in the high-volume transactions. At the moment, we're not far down that road, but I think there's consensus that in three to five years' time, we're not going to have 600 HR departments and 200 payroll groups."