Overview of HR Shared Services
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Overview of HR Shared Services

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    Overview of HR Shared Services Overview of HR Shared Services Presentation Transcript

    • Meeting notes from the
      IQPC 9th Annual Asian Shared Services & Outsourcing for HR Conference
      May 4-5, 2011
      Kuala Lumpur, Malaysia
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      1
      Overview of HR Shared Services
    • Objective of Shared Services
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      Combine common HR functions to for advantages
      economies of scale
      cost-savings
      Front-line HR focus
      HR strategic work
      business partner w/ BU managers
    • Shared Services Continuum - Centralization
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      pull together “back-office” administration under one roof in a single location, managed as a single team
      efficiency gain from
      elimination of the work that was previously done in multiple groups and locations
      processes reengineered
      optimize business workflow for results
      in most cases, work is simply relocated to a new location but, workflow largely remains the same before the centralization
      Generally speaking, centralization doesn’t go far enough
    • Shared Services Continuum –Shared Services
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      focus on customer service delivery by
      developing service level agreements (SLA)
      with performance metric score-cards
      cost is managed
       a true shared service model looks at end-to-end processes globally
    • Shared Services Continuum –Off Shoring
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      Companies are increasing their presence in the global marketplace
      The consequence for HR
      delivering global policies relevant to the new market
      weaving in corporate policies with local practices
      Companies gain by leveraging the consistency of a shared service model globally in disparate locations
    • Shared Services Continuum –Out Sourcing
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      Companies with matured shared services
      May look for further cost-reduction and labor arbitrage
      Turns to third-party service providers
      manage the organization’s transactional tasks
      may outsource a specific function such as payroll or staffing
      A more aggressive a strategy may outsource the entire shared services function
      only the strategic and business partnering function remains in-house
    • Foundation for Shared Services
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      Process Reengineering
      Is the process by which HR organizations thoroughly evaluate, assess and align HR policies
      Global consistency is a strict requirement
      Only critical country exceptions are allowed, typically for legal purposes.
      Allowing for business process exceptions, continuing to do things they used to be, creating process excursions, erodes the benefit of shared services.
    • Foundation for Shared Services
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      HRMS
      A common infrastructure allows for “sharing”
      business processes, service delivery and knowledge-base across the globe
      maintains all data related to the entire employee life-cycle
      rely on “employee self-service”
      Self-service is built on the premise of consistent policies which applies to employees globally
      reduce reliance on in-person contact with HR for basic queries and administrative services
      Moving HR to the intranet is an accepted practice
    • Foundation for Shared Services
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      Change Management
      Managing expectations is essential
      employee wants the same level of direct one-to-one contact
      convince management teams the value of offloading tactical work
      while line managers will want to see higher strategic work delivered by HR
      HR team will need to be retrained
      Skills to perform in a shared service center
      front-line HR will need to develop strategic consulting skills to work with business units.
      Any change will require executive sponsor such as the CEO and CHRO
    • HR Culture Shift
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    • Shared Services Functions
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    • Shared Services Functions – HR Administration
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      HR Administration: the various administrative work required of HR
      Transactions may include
      interview arrangement, training course scheduling, benefits management, and performance review processing
      strategy can reduce manual transactions
      Requires standardization in processes and policies
      coupled with an automation strategy
    • Shared Services Functions – Employee Queries
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      Employee Queries: 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
      HR can provide value on strategic level but
      administrative and first-line response can be delivered in a different manner
    • Shared Services Functions – Vendor Management
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      Vendor Management: Many HR already outsource certain aspects of services
      may be benefits administrators, payroll processors or recruiting agencies
      A central management team to
      contracts negotiations, management of services and performance indicators
    • Shared Services Functions – Data Transaction
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      Data Transactions: All HR functions require access and use of relevant HR data
      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
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      Americas: The Americas region, particularly in the US, have the most established shared services models
      technology, common language, standardized policies make it easier to migrate towards a shared services platform
      Latin America: 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
    • Location Strategy: Global Service Centers
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      EMEA: 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
      APAC - China: For many US MNCs, China presents the biggest market share potential for growth
      China is in its infancy stages of developing shared services organizations
      But, as companies grow, they invest in setting up infrastructure for shared services.
      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
    • Location Strategy: Global Service Centers
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      APAC India: 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
    • Transformation Challenges
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      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
      Employee Feelings/Emotions
      Helping employees through the change process
    • Conclusion
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      HR is required to evaluate its own service delivery strategy to meet this demand
      Business is growing in sheer size and complexity
      Expectation of HR service delivery is unprecedented
      A strategic assessment of HR structure can go a long way in optimizing HR
      both in terms of services and business partnership
      shared services model allows HR to deliver excellence in both the tactical and strategic aspects
      neither of which can be accomplished well if kept under existing conditions simply by adding more HR headcount
    • References
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      “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