For several years Denmark’s ninth largest company in terms of sales, heavy goods company DLG, has focused on an ambitious optimisation strategy, in which HR played a pivotal roll
When DLG’s HR department began to review the time records of the company’s 7600 employees, it was like landing in a time bubble. More than 700 employees in Denmark never used the punch card but recorded their hours on paper slips. And upon further in-depth examination of the process things were even worse. The paper slips were first sent to a local secretary, who checked them. The slips were then sent on to the payroll office for yet more checking and registration in the payroll system before salaries were actually processed.
“It was an incredibly heavy and inefficient work process, and on top of that, the many handovers increased the risk of errors even more. We were clearly in need both of simplification and digitalisation and in 2008 we dispensed with the punch cards and dived directly into electronic time recording with ProMark,” says Group Chief Executive for Organisation & Strategy at DLG, Maria Kofod Larsen, who is responsible both for the HR department and communication and marketing throughout the whole Group.
“Since then we have concentrated on optimising all of our work procedures and simplifying the processes. This makes things go more smoothly and this has proved to have major advantages for both managers and employees. Apart from the obvious advantages for managers through their access to detailed data, it has boosted employee satisfaction enormously,” says Maria Kofod Larsen.
Greater employee confidence
The greater employee satisfaction is a direct result of the greater openness provided by exact ongoing T&A registration. The big difference is that employees move from a situation where they have no insight into their own registered hours upon which their salary is based to complete transparency for each individual.
FOUR GOOD PIECES OF ADVICE
from Maria Kofod Larsen
Maria Kofod Larsen says that trust between managers and employees has increased because of the automation of the system so that salary goes directly to salary payment, if the records lie within the agreed framework. Only discrepancies need approval by the manager, and she experiences that there is great enthusiasm among her employees.
“The staff has taken ownership of the system. When I meet the hourly paid workers’ union, they offer comments and suggestions as to how wage reports can be improved in the future. Employees have an entirely different overview of their own data,” the CEO says.
Moreover, there are benefits for the management stemming from electronic recording.
“Absence due to illness is extremely low in DLG, and this has not changed after the introduction of ProMark. But we now have an improved overview which enables us to know exactly where we need to take action if we find trends which require focused action among our employees. As a result we no longer embark on initiatives which are widely based but imprecise. Now, instead, we can focus on the places where we face challenges,” says Maria Kofod Larsen.
In Mark Information's experience DLG’s experiences with increased efficiency are not unique. Many companies are taking the quantum leap from paper-based registration to digital recording. DLG has rolled out digitalisation in stages. First it was done at the head office of the parent company, then in the rest of the country, after which came the subsidiaries. This method ensures that it is a success within one group of employees before the next rollout phase.
The advantage is that the resources saved on unnecessary recording and movement of paper can be used on developing the skills of the employees.
“It has been crucial to us to be able to free up major resources which were previously used on controlling and checking in order to create value and develop the employees. Previously our secretarial staff had to spend time on familiarising themselves with the collective agreements. However, today we have an efficient central HR administration, which monitors an extremely complex area. And therein lies the whole purpose of digitalisation - we reduce the risk for errors, facilitate work processes thereby creating added value for the organisation,” says Maria Kofod Larsen.
Inclusion creates backing
This does not mean that the process was without challenges. Maria Kofod Larsen stresses the importance of involving everyone in the process from the very start.
“In all change processes it is important to involve all links in the chain, and this is particularly important for processes where the company was used to doing things in a particular way, which is the case with T&A registration,” says DLG’s group chief executive.
“It’s not certain that all managers in the organisation have “seen the light” in the same way as the HR department at head office, and of course, there were bumps on the road on the way. But in general, the better one is at explaining how each manager and employee will benefit from a new initiative, the more successful a particular implementation will be. We found it necessary to thoroughly think through the entire process from start to finish,” says Maria Kofod Larsen.
This is something Mark Information recognizes.
“The greatest challenge is always the change management exercise. The involvement of staff is a crucial precondition for success. Should this not be the case, one risks losing a number of employee in the process. Therefore, it is important to get the message across that it is not about control but rather the payment of correct wages and salaries to the staff. This is employees’ most important focal point,” says Managing Director Torkel Olrik.
Lean – now and in the future
DLG solved this challenge by, among other things, involving employees in focus groups right from the beginning. They were also asked to submit suggestions for ongoing improvements and thus take ownership of the process and the final solution. This was of great importance in the wider process of introducing lean production in the DLG group, in which the staff were already working on optimising processes.
Today, DLG only needs to include the drivers in Denmark before the whole hourly paid organisation is using ProMark. DLG has gone an incredibly long way in relatively few years.
“DLG is an extremely dynamic company which has been buying up new companies for integration in the group. The new companies are not necessarily at the same digital level as the other companies in the group, and therefore there will be a continued need for rollouts in the new members of the DLG group,” says Torkel Olrik.
DLG’s group chief executive for Organisation & Strategy stresses that the process has become easier as experience has grown with the previous rollouts and by involving staff in lean production within other areas.
But she stresses that the group’s employees’ focus has not changed - and for good reasons.
“The employees are crucial if processes are to be optimised. When they are involved along with their leaders, it often turns out that they themselves have the solutions,” says Maria Kofod Larsen.