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Macy's is scrapping a costly mail center and implementing Oracle benefits administration software for employees as part of a major project to overhaul HR.
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Macy's plans to go live with Oracle HCM Cloud in July 2017, replacing a 20-year-old on-premises PeopleSoft system. The cloud will provide core HR; payroll; benefits administration; compensation including bonuses and incentive pay; workforce analytics; and talent management software such as recruiting, onboarding and management of employee goals.
The project is intended to improve and streamline services to employees. It is also aimed at freeing HR leaders from administrative tasks to allow them to focus on talent development and strategies to improve the business, said Christopher Coy, director of the project, called HR Reinvent.
"We want HR business partners to be more strategic," Coy said. "We want them engaging with employees, driving culture, driving sales and driving the business."
Automated benefits services driver for change
A key advantage of Oracle HCM Cloud includes benefits administration software to automate notices to employees. Macy's, which has more than 200,000 employees during the holiday season, processed more than 1 million benefits transactions last year.
Most employees, including 22,000 executives and most of 148,000 hourly employees, can be notified via company-provided email of possible changes or enrollment in benefits.
However, 45,000 part-time or seasonal employees do not receive a company email.
This creates "an email problem" for transactions involving benefits, Coy said during a presentation at Oracle HCM World in Chicago.
Macy's, based in Cincinnati, currently spends about $200,000 a year on a center that notifies the 45,000 employees about benefits by mailing letters.
Macy's legal team has advised that federal law requires that communications about health benefits must be mailed first class unless an employee receives a company-provided email. It cannot be a personal email.
Coy said the 45,000 employees cannot receive a company email because of licensing costs and because of the risks of providing so many temporary employees with a company account from which they could send out emails.
Cloud is catalyst for data warehouse
To solve the email problem, Macy's will integrate the Oracle cloud with a data warehouse to feed a Macy's custom messaging system, which all employees can access through the Macy's portal. The cloud project is a catalyst for building the data warehouse, Coy said.
The messaging tool can trigger an email and an electronic communication through the company portal. The portal messaging would comply with the federal ERISA law.
"This solves our email problem," Coy said. "Our employees actually see the portal all the time. They log on to a computer or desktop at work or at home. This is even available through their point of sale registry. If they are selling, they can see that."
The messaging system is for interior communications within Macy's. It cannot be used like email to send written notes anywhere.
Oracle HCM Cloud would hold core information on all employees. The cloud would be integrated with the data warehouse, including possibly with plug-ins to replicate benefits tables or with tools to extract HCM data, said John Joseph Antoniraj, senior consultant with Deloitte Consulting, the implementation partner for Macy's.
Cloud adds new features for benefits administration
Oracle benefits administration software offers some special features not provided by the on-premises PeopleSoft System.
The HCM cloud, for example, can be configured for life events, such as an employee's move to a different state, a marriage, an adoption or a divorce. The cloud can trigger an electronic communication depending on the particulars of the event, Antoniraj said.
If an employee moves from Ohio to New York, for example, there would be no communication because there is no change in benefits from Macy's.
However, if an employee moves from New York to California, a communication would be sent because Macy's provides several plans in California that are not available in New York.
The HCM cloud also offers "date tracking." The system can look back to determine an employee's exact benefit choices at a certain point in time and then look at what choices would be available in the present under a life change.
"It gives us the ability to either choose to communicate or not to communicate depending on whether your benefit data has changed or not changed," Antoniraj said. "It is a very powerful feature."
The benefits administration software can also flag an employee to take a certain action based on a change after an employee enrolls in benefits. If an employee increases a life insurance benefit, the system would send an electronic communication to provide proof of good health or evidence of insurability.
The PeopleSoft system cannot be integrated with the data warehouse with the same options as provided by the HCM cloud.
Oracle HCM Cloud to provide more online services
In addition to automated benefits services, the Oracle HCM Cloud will provide a new user interface for more online services for employees. New hires, for example, will no longer be required to fill out seven different forms during onboarding.
As part of the change, Macy's is consolidating some 2,000 different processes into 200. Onboarding is currently provided in different ways in different parts of the organization, but it will be a consistent process with the Oracle system, said Bill Tompkins, senior vice president of human resources and total rewards at Macy's.
In the future, Macy's could benchmark and predict theft, attrition and performance, down to the individual employee, manager or store level, according to a blog by Paul Kaptein, a director of product marketing at Oracle.
The cloud will also end Macy's dependence on an old system that has needed costly customizations and upgrades over the years.
"We want a steady stream of innovation and enhancements," Tompkins said. "By going to the cloud and getting two enhancements a year, we will always be at the forefront of the newest thinking of the collective mindset of HR and technology people around the world."
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