The Road Less Traveled: Merrill Lynch & Co. - ' Page 4 '

Most problems, however, are resolved in Tier 1, not only making it easier for employees to get quick answers, but also streamlining the process for correcting HR problems before they escalate.

Last September, during Merrill's annual benefits enrollment period, for instance, some employees who had shifted from part-time to full-time status found that their medical and other insurance deductions were higher than expected. So they called and e-mailed the Hopewell office.

Within a day, a report of call-center activity alerted Merrill HR staff that a persistent issue was arising and should be addressed. Checking with the benefits group, HR discovered a coding glitch in a computer that spit out the incorrect deduction for newly classified employees. The system was reprogrammed and the mistake wiped out within a day.

"It was a wonderful demonstration of how the system is supposed to work," says Robert Kiely, Merrill's first vice president for human resources, who oversees the Hopewell site. "We don't have four people chasing their tails anymore, trying to figure out what's wrong when the same thing is going wrong multiple times throughout the organization." Tying that example to expense reductions, Kiely adds: "We require fewer people to solve problems; there's a huge link between that and improved productivity."

In the past, the people spinning in circles would have been relationship managers in the business units. With fewer routine tasks sent their way after the Hopewell site opened, fewer relationship managers were needed. As a result, some of the company's nearly 400 relationship managers were reassigned to Hopewell and other call centers, but more than 100 were let go.

The remaining relationship managers were linked again to the business units—this time not in teams, but as individuals—with instructions to make themselves relevant in personnel issues such as talent development and retention.

"There was initial resistance to the HR program," says Joseph Casey, Merrill's chief operating officer for human resources. "It was a complete cultural change for the company. The business units were skeptical of the model," particularly the idea of working closely with HR specialists as strategic allies. That relationship is still being fine-tuned.

In most business units, department heads view the human resources managers in their midst as a place to offload jobs corporate executives usually aren't prepared for, such as recruitment and ongoing training. But that's not enough to make the reorganization worthwhile.

The true value of the connection between relationship managers and business units is about to be demonstrated by the next crop of executive talent at Merrill, says Kassel.

"We're about to begin a rigorous program of hiring as well as an internal search for management talent," says Kassel. "We're going to bring on thousands of people, and a thousand of them will be at the senior vice president level. The burden of determining who these people are and placing them in the appropriate business units is very much on the shoulders of relationship managers. We could never have even dreamed of doing that before."

Perhaps the biggest challenge faced by Merrill's HR team involved the technology used to serve the call center. The problem wasn't the routing and switching systems required to funnel the thousands of calls and e-mails to the right people in Hopewell. Merrill is a company awash in customer service technology, because so much of its business is directly with consumer and institutional clients. As a result, Siebel CRM software used throughout much of the company was migrated to Hopewell to "answer" the phones and distribute the e-mails. "We configured Siebel to address the tasks that are handled by service center personnel," says David Kelley, Merrill's chief technology officer for the corporate technology group.