Gallagher shares its journey to the successful implementation of a cloud-based HCM.
By Sufel Barkat
As the global pandemic took hold around the world, most companies adopted a new way of working. Some organizations told their employees to work from home; others kept essential functions operating while following a confusing mix of local and national health and safety regulations. In nearly all cases, company executives turned to their HR leaders to adapt their programs, processes, and policies to keep their organizations functioning and their employees safe.
When the pandemic hit, Gallagher, a worldwide provider of insurance, risk management, and consulting services, directed nearly all of its 30,000 employees to work from home. Fortunately, Gallagher had already completed its conversion from on-premises computing to cloud computing, moving all of its HR functions to Oracle Cloud Human Capital Management (HCM).
This cloud transformation initially began five years ago as a way to better support the company’s tradition of growth through acquisitions. During 2019 alone, Gallagher completed 49 acquisitions with estimated annualized revenue of $468 million. The move to cloud allowed the organization to bring employees from the acquired companies into the fold under a standard set of rules governing salaries, benefits, and promotions.
The shift to cloud computing also gave Gallagher’s HR leaders the agility and flexibility they needed to manage through the COVID-19 crisis, providing the capabilities to:
- update work policies from the company’s headquarters and distribute those changes instantly through the cloud to every Gallagher location around the world;
- accommodate local and national changes in work regulations imposed by health and safety authorities;
- communicate effectively with all employees about the latest health and safety precautions; and
- easily keep track of employees as they update information about their hours and work locations using the “self-service” functions of the software.
These capabilities proved critical to success, allowing company leaders to advise employees on steps they should take to stay safe during the pandemic and work productively from home. All employees and managers continue to have access to the company’s HR systems, no matter where they are working. They always have the latest advice from Gallagher on every aspect of working safely and productively during the pandemic.
And as the pandemic continues to evolve, the cloud-based HCM system is also enabling the safe return to work. Gallagher executives already announced that all employees should plan to work from home until January 2021 and are developing a phased approach to the return to the office. Employees are entering their preferred return-to-work dates into the HCM platform, and managers are using that information to orchestrate their return. The HCM system is also helping business leaders report their plans to local and national health and safety regulators.
During its move to cloud, Gallagher identified three steps for success.
1. Get employee and executive buy-in before starting implementation. Gallagher built a road map to implementation that covered the benefits of moving to the cloud, the costs versus the payoffs, and the time invested and training provided. HR leaders shared the plan with employees and managers to win support and generate enthusiasm before beginning the transition.
Because of the company’s tradition of growth through acquisitions, the road map clearly spelled out how a cloud-based HR system would allow Gallagher to bring acquired companies’ employees into the Gallagher family under a standard set of rules governing salaries, benefits, and promotions.
2. Begin the journey to the cloud slowly. HR leaders should transition non-critical applications first and phase others in gradually, giving employees plenty of time to adjust and offering education and support as they learn the new system.
Before Gallagher moved any critical applications to the cloud, the company did a trial run by creating what it called a “coexistent cloud.” They left their legacy, onpremises applications for core HR in place, and then asked a small group of about 10 HR professionals to test the company’s compensation function in the cloud. The company chose to test compensation because the calculation of pay changes is not critical to Gallagher’s day-to-day functions, so the trial wouldn’t interfere with the business.
The testers, who were accustomed to figuring out the impact of compensation changes using spreadsheets, gave rave reviews to the automated program and reported that the learning curve was very low. They became experts in no time and indicated that they did not want to go back to using spreadsheets. With employees on board, Gallagher decided to move all its HR functions to the cloud.
3. Use this as an opportunity to streamline HR processes. After choosing Oracle cloud software, Gallagher began interviewing cloud implementation partners. The company chose six finalists that then submitted individual plans for implementation. KBACE—a company since acquired by Cognizant—sent experts in core HR, benefits, recruiting, and compensation to answer questions from the Gallagher team, and it got the contract.
Gallagher went live with Oracle Cloud HCM in April 2018 and a year later, added modules to automate payroll and track employee attendance and absences. In the process, Gallagher streamlined many of its HR processes, notably increasing the frequency of performance reviews—previously conducted annually—between employees and their managers. Employees are now able to get feedback more often so they can make changes in their behavior sooner. Performance goals that feed the evaluation process can also change much more frequently to reflect evolving expectations.
The company has also used Oracle Cloud HCM modules to standardize recruiting, simplify payroll processes, and improve reports to executives. Employees in all areas of HR have steadily traded in their spreadsheets and paper-based processes for more automated equivalents.
Gallagher expects to save 30% on its overall HR tech costs during the next five years by moving to the cloud. Even more important than cost savings, the flexibility and on-demand access of a cloud platform has never been more important than during the pandemic. Savvy HR organizations should consider a move to the cloud a top priority in the year ahead.
Sufel Barkat is vice president of information systems at Gallagher.