Shared Services Functions
The functions that could be done from a shared services center may include:
The focus is on the various administrative work required of HR.
Transactions may include interview arrangement, training course scheduling, benefits management, and performance review processing. Organizations with standardization in processes and policies coupled with an automation strategy can reduce manual transactions.
Ad hoc employee requests take up a significant portion of an HR professional’s time. Business group managers want HR to respond and provide service to the organization. However, HR can provide value on strategic level but, provide administrative and first-line response in a different manner.
Whether an HR organization has a centralized shared service function most already outsource certain aspects of services. This may be benefits administrators, payroll processors or recruiting agencies. A central management team may be more effective rather than having each respective functions negotiation contracts, management of services and performance indicators.
All HR functions require access and use of relevant HR data. Whereas ad hoc requests or silo data reporting slows down an organization’s ability tap into organization HR metrics and indicators. Ideally, HR functions can leverage on a single data platform.
Location Strategy: Global Service Centers
The Americas region, particularly in the US, have the most established and leads in the use of shared services models. Advanced technology, common language, standardized policies make it easier to migrate towards a shared services platform.
Depending on the size of the organization and growth strategy in Latin America countries, differences in culture and language may present challenge to shared services.
Advancement in shared services has been slowed due to the region’s cumbersome regulatory and data-protection environment. HR technology platforms are beginning to allow pan-Europe approaches to payroll and recruitment administration.
For many US MNCs, China presents the biggest market share potential for growth. Employee headcount has grown to critical mass and shared services may be viable to increasing HR operational efficiency. However, often the decision to implementing shared services remains with headquarters.
China is in its infancy stages of developing shared services organizations. But, as companies grow, they invest in setting up infrastructure for shared services.
Initially, China shared services teams focus on Greater China (China, Hong Kong and Taiwan). As teams have more experience, many companies are moving their Southeast Asia organizations under the China umbrella.
As the global leader in business process outsourcing, India has developed core expertise in managing services for large multinational corporate clients. This may include benefits management, payroll processing, employee records and HR reporting.
However, talent shortages, IT infrastructure hurdles and lack regional language fluency have limited India as a location of choice for shared services center.
The decision to roll out a shared services infrastructure should not be taken lightly. Setting up shared services will have dramatic impact on how an HR organization delivers its services to the organization. And, such a model will impact employee job function and skills abilities needed within a shared service team.
A clear decision and direction set for by head of HR will help set the stage. Items to address:
Why make any changes?
- What are the business and HR imperatives driving the change?
- How will the organization gain with this change?
Define what is changing
- What stays the same?
- What changes?
- What are the desired results?
Roles and Capabilities
- Define and train for skills needed for new roles in shared service center
- Develop new skills for those front-line HR professional remaining in the business partner role
- Helping employees through the change process
Business is growing in sheer size and complexity, from R&D, engineering to technology manufacturing. Expectation of HR service delivery is unprecedented. HR is required to evaluate its own service delivery strategy to meet this demand.
A shared service model allows HR to deliver excellence in both the tactical and strategic aspects. However, neither of which can be accomplished well if kept under existing conditions simply by adding more HR headcount. A strategic assessment of HR structure can go a long way in optimizing HR for both in terms of services and business partnership.
“New Era for HR Shared Services,” Business Week Research Services, September 2007 http://mediakit.businessweek.com/Products/Research_Services/White_Papers
“Finding your place on the HR shared services continuum,” Mercer, 2008 http://www.mmc.com/knowledgecenter/Finding_your_place_on_HR_shared_services.pdf
“Beyond Centralization: Driving High Performance Through Fully Realized Shared Services,” Accenture, 2007 http://www.accenture.com/us-en/pages/insight-beyond-centralization-fully-realized-shared-services.aspx
IQPC 9th Annual Shared Services & Outsourcing for HR – HR Transformation Summit. May 4-5, 2011 http://www.ssohr.com/Event.aspx?id=442780