Eighteen months into a quiet effort to use technology to streamline its human resources operation, Citigroup Inc. feels it has some accomplishments to brag about.
The disparate benefits programs and HR policies that Citi inherited through mergers and acquisitions have largely been consolidated. Most things once done by paper are now done through an intranet, including benefits enrollment, on-the-job training, and corporate recruiting. And while convenience and uniformity have been among the primary results, Citi is finding wider ripples in the form of cost savings and corporate culture-building.
"Ultimately, these are significant changes that will allow us to service the needs of our employees better, faster, and cheaper," said Michael Schlein, Citigroup's senior vice president of global corporate affairs and human resources.
Other large U.S. banks have embarked on similar initiatives, but Citi's longstanding image as a technology-oriented organization makes its efforts in this area noteworthy. One reason is the company's sheer size - 270,000 employees in 100 countries, who are now all connected to the same e-mail network.
Citigroup is one of many banking companies that have been busy with merger integration. The coordination of business lines by necessity took a higher priority than the synthesis of human resources activities, Mr. Schlein said.
"When Citibank and Travelers merged at the end of 1998, senior management was focused most intensely on integrating the businesses wherever it made sense, and I think some of the staff functions were secondary," he said. "In other words, first things first. They focused on the businesses first to get them working well and together. So when I came into HR, there were things that were still unreconciled or unresolved."
Upon his promotion to his current position, Mr. Schlein said he found "unwieldy and disparate HR systems that were expensive to manage." Among other problems, the former Citicorp's HR was highly centralized at the corporate headquarters and the former Travelers Group had the opposite approach.
Early last year, Mr. Schlein said, he and Citigroup's chief operating officer, Charles O. Prince, got together to try to tackle the problem.
"We had people in corporate doing what people in business were doing, and it was duplicative and unnecessary," Mr. Schlein said. "You had people second-guessing each other - classic tensions between corporate and businesses that breed distrust and finger-pointing. Something needed to be done."
By trimming jobs and expenses, corporate human resources managed to pare down its budget by 50% over 18 months, Mr. Schlein said. Some of the cost savings have come from reassigning what were once HR responsibilities to the various business lines, and thus shifting financial responsibility.
"That's a dramatic restructuring," Mr. Schlein said. "Ironically, we weren't doing it for budgetary reasons. We were doing it for management reasons, but, sure, we saved a lot of money."
Last fall, Citi coordinated benefits across the United States and moved the system to the Internet. There were all sorts of positive repercussions, Mr. Schlein said, from the fact that HR only had to administer a single plan to the fact that employees who worked side by side no longer were being offered different practices.
Previously, Mr. Schlein said, whenever an employee asked a question about benefits, the HR person would first have to ask which company the employee came from, since both legacy sides offered different benefits packages. By keeping employees in outdated categories, Mr. Schlein said, the old system had worked against the goal of fostering a common Citi culture.
E-learning is another area Citi has branched into. Instead of flying people to off-site sessions to sharpen their product knowledge or other skills, it has the training delivered to the employee's desktop.
"If we send employees to a classroom, it usually involves an airplane, a hotel, a day or two out of the office, all for a few hours of training on a system," Mr. Schlein said. "If we can deliver that training to you at your office in front of your computer we save a great deal - just the hotel costs and travel costs alone are significant savings."
For example, he said, Citi recently started a Web-based travel and entertainment reimbursement program. It would have cost about $70 per person to train people to use it in a central setting; online training cost about $7 an hour.
"That is significant," Mr. Schlein said. "Plus, if the system itself is online, doesn't it make sense that the training should also be online?"
Another push to eliminate paper has taken place in recruiting, where Citi is among a number of large companies encouraging job applicants to approach it electronically rather than by snail mail.
Citi seems to take things a step further. Prospective employees can submit resumes along with the type of job they are interested in, and the company will e-mail them when a suitable opportunities arises, said Edith Ginsberg, the senior human resources officer at Citi's corporate center. In one of Citi's businesses, more than 50% of potential employees schedule their job interviews online, she said.
"The electronic job boards have very much taken the place of the classified ads," Ms. Ginsberg said.
Mr. Schlein said these small adjustments add up to more efficiency and productivity. "By unifying benefits, e-learning, and the changes I've described, there's no question we have saved tens of millions of dollars annually, and we're just getting started," he said.
Between the HR functions that are online and the corporate T&E and procurement options available electronically, "it's the beginning of self-service," Mr. Schlein said. "More and more functions will be available to employees through self-service online, and the savings are meaningful."
For example, an employee who moves can make an address change in the system without having to talk with an HR professional. "You're more likely to get it right than if you have to call someone else and they fill out a form that is entered by a third person," Mr. Schlein said. "Again, with technology, we can do it better, faster, and cheaper."
Even some of the orientation given to new hires has been moved online, including a video emphasizing a global corporate culture. A new, centralized e-mail directory lets all those 270,000 staff members contact one another more freely. Every employee gets a daily e-mail with memos, news stories, and other information, and senior management does a quarterly Webcast.
"We all see exactly the same exact thing," Mr. Schlein said. "So, I can strike up a conversation with a colleague in Singapore and say, 'Hey did you see that?' and they have. It is the electronic equivalent of what used to be water-cooler conversation."
Mr. Schlein said that employees can now view their compensation and medical information, change their tax withholding and marital information, all online. And, he expects online capabilities to be expanded considerably in the next few months.
"Now you can go online and see the value of your stock, your pension, or you can change the way your 401(k) is invested," he said. "You can decide if it's the right time to exercise your options, all through the privacy of your own computer."
Some aspects of the system need tweaking. For instance, there are still separate sign-on procedures and passwords for different systems. "We are going to fix that," Mr. Schlein said. "We are going to have a single-sign-on solution for most of the HR sites by the end of this year."
He said that he personally conducts a good deal of business from his home and car using a cell phone and a Blackberry instant messaging device.
Indeed, Mr. Schlein said, being an early adopter of the Blackberry once let him look good in front of Citigroup chairman and chief executive officer Sanford I. Weill.
Mr. Schlein was working with Mr. Weill on the announcement of a big deal, and "I had nine of the answers to the 10 questions he asked me," he recalled. "Less than 10 minutes later, I had the answer to the last question - from London. Sandy looked at me and said, 'How did you get the answer?' I showed him the Blackberry. I think he thought it was pretty cool. In such a short amount of time, we've seen technology transform so much."
