By Ian J. Cook, CHRP

In 2011, lots of HR groups will be searching for the means to increase employee satisfaction AND increase productivity. According to a recent report by McKinsey Quarterly, part of the answer lies in the use of Web 2.0 technologies. In the report, based on the views of 1,700 executives around the globe, two of the primary benefits identified by those using Web 2.0 tools are “decreased time to market for products” and an “improvement in employee satisfaction”. 

Web 2.0 covers a wide-range of technologies and tools. These would include social media such as Twitter and Facebook. They also include wikis, podcasts, searchable employee profiles and collaboration sites such as Groupsite or Ning. What all these tools have in common is that they facilitate and manage the co-creation of content. As with all processes, technology is simply a tool and the value comes from how these tools are deployed.

Through their research, McKinsey has identified what they describe as the “rise of the networked enterprise”. The networked enterprise has integrated the right Web 2.0 tools into both their internal and external practices to increase the effectiveness of employee-to-employee activity, deepen their relationship with their customers and enhance their collaboration with their suppliers. In this way they are re-designing how they do business and are seeing significant benefits in terms of speed of delivery and cost savings. One of the key benefits that is relevant to HR groups is the way that these tools increase people’s ability to access experts and expert information quickly and simply. They also have been identified as significantly reducing the costs of communication between employees.

McKinsey’s survey found that organizations with a high level of usage of Web 2.0 were gaining significant cost and productivity advantages. Those who were using it solely to support internal practices had a median operational cost saving of 10 per cent. It also identified that those organizations who were gaining the most benefit from the application of these tools were those that had integrated the tools right into the day-to-day actions and focus of their employees. This underlines the fact that the promise of Web 2.0 is not just about adopting the technology or starting a blog, the value comes from utilizing the capabilities of the technology to deliver something you need faster, better and for a lower cost. The really good news for HR groups is that achieving this has a positive impact on employees’ satisfaction levels.

So while some organizations are still debating whether or not to allow employees access to Facebook, leading organizations have been embracing the second wave of the World Wide Web to enhance their business and reap the rewards. With productivity and employee morale high on the agenda for 2011, it is time to start following their lead.

Ian J. Cook MA, MBA, CHRP is the architect and driving force behind the HR Metrics Service. As the Director of Research and Learning for BC HRMA he and his team are keeping HR professionals up to date on the best in HR knowledge and practice.