0
SHRM Poll: Shared Services and Centers of
Excellence


                                     July 23, 2010
SHRM Poll: Shared Services and Centers of Excellence




Contents:

           Introduction

           Shared Services ...
Introduction



This study examined the shared services centers (consolidated administrative HR
    functions) and centers...
Shared Services Centers




               Shared Services & Centers of Excellence | ©SHRM 2010   4
Does your company administer and deliver HR transactions through an
internal and central shared services department?




 ...
Does your company administer and deliver HR transactions through an
internal and central shared services department? (Diff...
What business model does your company use to administer and deliver
HR transactions?



                                  ...
What business model does your company use to administer and deliver
HR transactions? (Differences by organization demograp...
To what degree has your company's shared services organization…



                            To a large degree          ...
To what degree has your company's shared services organization…
(Differences by organization demographics)



•   Increase...
What are the top three positive outcomes your company has
experienced as a result of its shared services center?


       ...
What are the top three positive outcomes your company has
    experienced as a result of its shared services center? (Diff...
What are the top three positive outcomes your company has
    experienced as a result of its shared services center? (Diff...
What are the top three challenges your company has experienced with
its shared services model?



            Employee res...
What are the top three challenges your company has experienced with
    its shared services model? (Differences by organiz...
What are the top three challenges your company has experienced with
its shared services model? (Differences by organizatio...
Is the shared services center just for your location or the entire
company?



                                           ...
How many separate locations are served by shared services?




                 80%                                       ...
How many separate business units are served by shared services?




                                                      ...
Which services are offered through an HR shared services department?


                                Health care benefit...
Which services are offered through an HR shared services department?
(Differences by organization demographics)



•   Rel...
Which services are offered through an HR shared services department?
(Differences by organization demographics)



•   Pen...
Which services are offered through an HR shared services department?
(Differences by organization demographics)



•   Ret...
Centers of Excellence




              Shared Services & Centers of Excellence | ©SHRM 2010   24
Do you have centers of excellence that offer HR services/functions?




                                                  ...
Which services do the centers of excellence provide?


       Training and education program planning and administration,
...
Which services do the centers of excellence provide? (Differences by
organization demographics)



•   Employee relations
...
Over time, to what degree have the services of your central centers of
excellence…



                                   T...
Over time, to what degree have the services of your central centers of
excellence… (Differences by organization demographi...
Does your company have decentralized HR generalists in separate
business units and/or individual locations?




          ...
Does your company have decentralized HR generalists in separate
business units and/or individual locations? (Differences b...
Organizations That Do Not Use a Shared
   Services/Centers of Excellence HR
            Transaction Model




            ...
What is the primary reason for your company not adopting a shared
services business model?


    No perceived need for thi...
Does your company plan to change to a shared services/centers of
excellence HR transactions model?




                   ...
Does your company plan to change to a shared services/centers of
excellence HR transactions model? (Differences by organiz...
Demographics: Organization Sector



        40%              37%
                                             33%


     ...
Demographics: Location Staff Size


                                                              39%                  39%...
Demographics: Organization Operations




                Multinational, 45%




                                         ...
Demographics: Union Status



                                           Union, 27%




         Non-union, 73%




Note: ...
Demographics: Region


                                                  37%
                40%


                       ...
SHRM Poll: Shared Services & Centers of Excellence


Methodology
             •   Response rate = 18%
             •   Sam...
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Transcript of "Shrm poll shared_servicesfinal"

  1. 1. SHRM Poll: Shared Services and Centers of Excellence July 23, 2010
  2. 2. SHRM Poll: Shared Services and Centers of Excellence Contents:  Introduction  Shared Services Centers  Centers of Excellence  Results by Organizations That Do Not Use a Shared Services/Centers of Excellence HR Transaction Model  Methodology Shared Services & Centers of Excellence | ©SHRM 2010 2
  3. 3. Introduction This study examined the shared services centers (consolidated administrative HR functions) and centers of excellence (localized areas of in-depth HR expertise) models used for administering HR transactions and services. The shared services model, as envisioned by Dave Ulrich, is a way to promote HR expertise and deliver improved services companywide through the division of tasks and expertise. Shared Services & Centers of Excellence | ©SHRM 2010 3
  4. 4. Shared Services Centers Shared Services & Centers of Excellence | ©SHRM 2010 4
  5. 5. Does your company administer and deliver HR transactions through an internal and central shared services department? No, 25% Yes, 75% Note: n = 484. Shared Services & Centers of Excellence | ©SHRM 2010 5
  6. 6. Does your company administer and deliver HR transactions through an internal and central shared services department? (Differences by organization demographics) • Publicly owned for-profit organizations (74%) were more likely than nonprofit organizations (53%) to administer and deliver HR transactions through an internal and central shared services department. • Large-staff-sized organizations (500 or more employees) (78%) were more likely than small-staff-sized organizations (1 to 99 employees) (62%) or medium-staff-sized organizations (100 to 499 employees) (63%) to administer and deliver HR transactions through an internal and central shared services department. • Organizations with multinational operations (75%) were more likely than organizations with single country operations (64%) to administer and deliver HR transactions through an internal and central shared services department. Shared Services & Centers of Excellence | ©SHRM 2010 6
  7. 7. What business model does your company use to administer and deliver HR transactions? Completely in-house shared services Completely outsourced shared services A combination of in-house and outsourced shared services 37% 61% 2% Note: n = 352. Only respondents who indicated that they administer and deliver HR transactions through an internal and external shared services department were asked this question. Shared Services & Centers of Excellence | ©SHRM 2010 7
  8. 8. What business model does your company use to administer and deliver HR transactions? (Differences by organization demographics) • Government agencies (58%) were more likely than publicly owned for-profit organizations (24%) or nonprofit organizations (21%) to use completely in-house shared services. • Publicly owned for-profit organizations (72%), privately owned for-profit organizations (68%) and nonprofit organizations (79%) were more likely than government agencies to use a combination of in-house and outsourced shared services. Shared Services & Centers of Excellence | ©SHRM 2010 8
  9. 9. To what degree has your company's shared services organization… To a large degree To some degree To a slight degree Not at all 3% lost endorsements and support from the business 18% 27% 52% unit(s) and local leaders it serves? (n = 267) 4% decreased employee satisfaction with HR service 18% 36% 43% delivery? (n = 267) gained endorsements and support from the business 32% 48% 11% 9% unit(s) and local leaders it serves? (n = 276) increased employee satisfaction with HR service 26% 50% 17% 7% delivery? (n = 277) 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Note: Percentages may not total 100% due to rounding. Shared Services & Centers of Excellence | ©SHRM 2010 9
  10. 10. To what degree has your company's shared services organization… (Differences by organization demographics) • Increased employee satisfaction with HR service delivery > Privately owned for-profit organizations reported greater average degrees of increased employee satisfaction with HR service delivery than publicly owned for- profit organizations. > Organizations with single country operations reported greater average degrees of increased employee satisfaction with HR service delivery than organizations with multinational operations. • Decreased employee satisfaction with HR service delivery > Publicly owned for-profit organizations reported greater average degrees of decreased employee satisfaction with HR service delivery than privately owned for-profit organizations or government agencies. > Large-staff-sized organizations reported greater average degrees of decreased employee satisfaction with HR service delivery than small-staff-sized organizations. Shared Services & Centers of Excellence | ©SHRM 2010 10
  11. 11. What are the top three positive outcomes your company has experienced as a result of its shared services center? Reduced HR staff time spent on administrative tasks 37% Reduced administrative costs 36% Consolidated redundant HR functions 33% Better tracking of employee data 31% Improved efficiency of operations 25% Greater strategic functioning of HR 19% Reduced/eliminated paper-based record keeping 18% Reduced routine HR-related calls/emails from employees 14% Reduced transaction errors 14% Improved employee satisfaction with basic HR transactions 11% Maintained (i.e., did not see an increase in) administrative costs 9% Improved ability to calculate metrics around HR functions 3% Other 1% 0% 10% 20% 30% 40% Note: n = 247. Percentages do not total 100% as multiple response options were allowed. Shared Services & Centers of Excellence | ©SHRM 2010 11
  12. 12. What are the top three positive outcomes your company has experienced as a result of its shared services center? (Differences by organization demographics) • Improved employee satisfaction with basic HR transactions > Privately owned for-profit organizations (19%) were more likely than publicly owned for-profit organizations (6%) to report improved employee satisfaction with basic HR transactions. • Reduced transaction errors > Medium-staff-sized organizations (22%) were more likely than small-staff-sized organizations (5%) to report reduced transaction errors. • Reduced HR staff time spent on administrative tasks > Large-staff-sized organizations (48%) were more likely than medium-staff-sized organizations (28%) to report reduced HR staff time spent on administrative tasks. • Reduced administrative costs > Organizations with multinational operations (44%) were more likely than organizations with single country operations (27%) to report reduced administrative costs. > Organizations with unionized workforces (49%) were more likely than organizations with non-unionized workforces (30%) to report reduced administrative costs. Shared Services & Centers of Excellence | ©SHRM 2010 12
  13. 13. What are the top three positive outcomes your company has experienced as a result of its shared services center? (Differences by organization demographics, continued) • Consolidated redundant HR functions > Organizations with multinational operations (40%) were more likely than organizations with single country operations (27%) to report consolidated redundant HR functions. > Organizations with unionized workforces (45%) were more likely than organizations with non-unionized (30%) workforces to report consolidated redundant HR functions. • Greater strategic functioning of HR > Organizations with single country operations(26%) were more likely than organizations with multinational operations (13%) to report greater strategic functioning of HR. • Reduced/eliminated paper-based record keeping > Organizations with single country operations (24%) were more likely than organizations with multinational operations (13%) to report reduced/eliminated paper-based record keeping. Shared Services & Centers of Excellence | ©SHRM 2010 13
  14. 14. What are the top three challenges your company has experienced with its shared services model? Employee resistance toward the shared services model 43% Transitioning from traditional HR delivery to the shared services model 40% Shifting HR staff roles and responsibilities 37% Difficulty with the IT infrastructure to support automated, web- 30% based HR functions Performance metrics for this model have not been effectively 27% tracked Time to implement the shared services model was lengthier than expected 24% Expected HR staff time savings not achieved 23% Difficulty with outsourced portions of HR services 22% Negative impact on relationship between HR staff and other company employees 18% Expected cost reductions not achieved 10% Other 4% 0% 10% 20% 30% 40% 50% Note: n = 235. Percentages do not total 100% as multiple response options were allowed.“Not sure” and “none” responses were excluded from this analysis. Shared Services & Centers of Excellence | ©SHRM 2010 14
  15. 15. What are the top three challenges your company has experienced with its shared services model? (Differences by organization demographics) • Negative impact to the relationship between HR staff and other company employees > Organizations with multinational operations (26%) were more likely than organizations with single country operations (11%) to report negative impact to the relationship between HR staff and other company employees. > Organizations in the midwest (27%) were more likely than organizations in the northeast (3%) to report negative impact to the relationship between HR staff and other company employees. • Performance metrics for this model have not been effectively tracked > Organizations with single country operations (37%) were more likely than organizations with multinational operations (19%) to report that performance metrics for this model have not been effectively tracked. Shared Services & Centers of Excellence | ©SHRM 2010 15
  16. 16. What are the top three challenges your company has experienced with its shared services model? (Differences by organization demographics, continued) • Employee resistance toward the shared service model > Organizations with unionized workforces (62%) were more likely than organizations with non-unionized workforces (38%) to report employee resistance toward the shared service model. • Transitioning from traditional HR delivery to the shared service model > Large-staff-sized organizations (48%) were more likely than medium-staff-sized organizations (27%) to report transitioning from traditional HR delivery to the shared service model. Shared Services & Centers of Excellence | ©SHRM 2010 16
  17. 17. Is the shared services center just for your location or the entire company? Just this location Multiple locations but not the entire company Entire company 3% 16% 80% Note: n = 219. HR professionals who were employed by a single location/business unit company did not answer this question. Shared Services & Centers of Excellence | ©SHRM 2010 17
  18. 18. How many separate locations are served by shared services? 80% 71% 70% 60% 50% 40% 30% 15% 13% 20% 10% 1% 0% One location Two to five locations Six to 10 locations 11 or more locations Note: n = 207. HR professionals who were employed by a single location/business unit company and responded that their organization’s shared service center was just for their location did not answer this question. Shared Services & Centers of Excellence | ©SHRM 2010 18
  19. 19. How many separate business units are served by shared services? 46% 50% 40% 30% 23% 22% 20% 8% 10% 0% One business unit Two to five Six to 10 business 11 or more business units units business units Note: n = 215. HR professionals who were employed by a single location/business unit company and responded that their organization’s shared service center was just for their location did not answer this question. Shared Services & Centers of Excellence | ©SHRM 2010 19
  20. 20. Which services are offered through an HR shared services department? Health care benefits administration 88% Flexible spending account administration 68% Retirement benefits administration 66% Payroll 65% Leave administration 60% Employee data collection and maintenance 48% Employee assistance/counseling 47% Recruiting support 43% Time keeping 39% Pension administration 39% Work/life benefits administration 38% Performance management 37% Training and development 36% Onboarding support 33% Compensation planning 32% Other benefits (i.e., not health care, retirement, leave or work/life)… 28% Relocation services 27% Information services 26% Expense reimbursement 24% Stock/share administration 18% Expatriate administration 12% Other 3% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Note: n = 234. Percentages do not total 100% as multiple response options were allowed. Shared Services & Centers of Excellence | ©SHRM 2010 20
  21. 21. Which services are offered through an HR shared services department? (Differences by organization demographics) • Relocation services > Publicly owned for-profit organizations (40%) were more likely than government agencies (12%) to report offering relocation services through an HR shared services department. > Organizations with multinational operations (38%) were more likely than organizations with single country operations (16%) to report offering relocation services through an HR shared services department • Stock/share administration > Publicly owned for-profit organizations (30%) were more likely than nonprofit organizations (7%) to report offering stock/share administration through an HR shared services department. > Organizations with multinational operations (24%) were more likely than organizations with single country operations (14%) to report offering stock/share administration through an HR shared services department Shared Services & Centers of Excellence | ©SHRM 2010 21
  22. 22. Which services are offered through an HR shared services department? (Differences by organization demographics) • Pension administration > Organizations with unionized workforces (58%) were more likely than organizations with non-unionized workforces (32%) to report offering pension administration through an HR shared services department. > Medium- and large-staff-sized organizations were more likely than small-staff-sized organizations to report offering pension administration through an HR shared services department. • Other benefits administration > Large-staff-sized organizations were more likely than medium-staff-sized organizations to report offering other benefits (i.e., not health care, retirement, leave or work/life) administration through an HR shared services department. • Payroll > Organizations with multinational operations (73%) were more likely than organizations with single country operations (58%) to report offering payroll through an HR shared services department. Shared Services & Centers of Excellence | ©SHRM 2010 22
  23. 23. Which services are offered through an HR shared services department? (Differences by organization demographics) • Retirement benefits administration > Organizations in the southeast (80%) were more likely than organizations in the northeast (52%) to report offering retirement benefits administration through an HR shared services department. • Flexible spending account administration > Publicly owned for-profit organizations (75%) were more likely than government agencies (44%) to report offering flexible spending account administration through an HR shared services department. Shared Services & Centers of Excellence | ©SHRM 2010 23
  24. 24. Centers of Excellence Shared Services & Centers of Excellence | ©SHRM 2010 24
  25. 25. Do you have centers of excellence that offer HR services/functions? Yes, 49% No, 51% Note: n = 222. Shared Services & Centers of Excellence | ©SHRM 2010 25
  26. 26. Which services do the centers of excellence provide? Training and education program planning and administration, mentoring, coaching 75% Recruiting, recruiting and staffing administration or recruiting and hiring policies 73% Employee relations 63% Performance management 58% HR policy development 57% Total rewards planning 53% Organizational design and change processes 51% Diversity programs 50% Legal 46% Succession planning 45% Other 5% 0% 10% 20% 30% 40% 50% 60% 70% 80% Note: n = 102. Percentages do not total 100% as multiple response options were allowed. Shared Services & Centers of Excellence | ©SHRM 2010 26
  27. 27. Which services do the centers of excellence provide? (Differences by organization demographics) • Employee relations > Organizations with single country operations (76%) were more likely than organizations with multinational operations (50%) to report providing employee relations through centers of excellence. > Organizations with non-unionized workforces (74%) were more likely than organizations with unionized workforces (40%) to report providing employee relations through centers of excellence. • HR policy development > Privately owned for-profit organizations (74%) were more likely than publicly owned for-profit organizations (44%) to report providing HR policy development through centers of excellence. • Other services > Organizations with unionized workforces (13%) were more likely than organizations with non-unionized workforces (1%) to report providing other services through centers of excellence. Shared Services & Centers of Excellence | ©SHRM 2010 27
  28. 28. Over time, to what degree have the services of your central centers of excellence… To a large degree To some degree To a slight degree Not at all 1% decreased employee satisfaction with HR service delivery? (n = 95) 14% 36% 49% increased employee satisfaction with HR service delivery? (n = 99) 23% 48% 15% 13% 1% lost endorsements and support from the business unit and local 15% 34% 50% leaders it serves? (n = 94) gained endorsements and support from the business unit and local 42% 35% 13% 10% leaders it serves? (n = 100) 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Note: Percentages may not total 100% due to rounding. Shared Services & Centers of Excellence | ©SHRM 2010 28
  29. 29. Over time, to what degree have the services of your central centers of excellence… (Differences by organization demographics) • Increased employee satisfaction with HR service delivery > Privately owned for-profit organizations reported greater average degrees of increased employee satisfaction with HR service delivery than publicly owned for- profit organizations. Shared Services & Centers of Excellence | ©SHRM 2010 29
  30. 30. Does your company have decentralized HR generalists in separate business units and/or individual locations? No, 42% Yes, 58% Note: n = 232. Shared Services & Centers of Excellence | ©SHRM 2010 30
  31. 31. Does your company have decentralized HR generalists in separate business units and/or individual locations? (Differences by organization demographics) • Publicly owned for-profit organizations (71%) were more likely than government agencies (35%) to report having decentralized HR generalists in separate business units and/or individual locations. • Organizations with multinational operations (72%) were more likely than organizations with single country operations (44%) to report having decentralized HR generalists in separate business units and/or individual locations. Shared Services & Centers of Excellence | ©SHRM 2010 31
  32. 32. Organizations That Do Not Use a Shared Services/Centers of Excellence HR Transaction Model Shared Services & Centers of Excellence | ©SHRM 2010 32
  33. 33. What is the primary reason for your company not adopting a shared services business model? No perceived need for this HR service delivery model for our organization 46% Concerns about lowered employee satisfaction with HR service 12% delivery Concerns about cost escalation 10% Lack of upper management support for this HR service delivery 10% model Model development/implementation in progress 9% Concerns about loss of support from the business units regarding HR service delivery 3% Current outsourcing arrangement of HR functions works well 1% Other 10% 0% 10% 20% 30% 40% 50% 60% Note: n = 102. Shared Services & Centers of Excellence | ©SHRM 2010 33
  34. 34. Does your company plan to change to a shared services/centers of excellence HR transactions model? 50% 42% 37% 40% 30% 20% 10% 7% 10% 5% 0% Yes, within Yes, within Yes, within No Not sure 12 months 13 to 24 the next 2 to months 5 years Note: n = 104. Only respondents who indicated that their organizations did not administer and deliver HR transactions through an internal and external shared services department were asked this question. Shared Services & Centers of Excellence | ©SHRM 2010 34
  35. 35. Does your company plan to change to a shared services/centers of excellence HR transactions model? (Differences by organization demographics) • Among organizations that do not currently administer and deliver HR transactions through shared services/centers of excellence: > Nonprofit organizations (81%) were more likely than publicly owned for-profit organizations (35%) to indicate that they do not plan to change to a shared services model. > Organizations with multinational organizations were more likely than organizations with single country operations to indicate that they plan to change to a shared services model within 13 to 24 months (23% compared with 5%) or within the next 2 to 5 years (18% compared with 3%). > Organizations with single country operations (78%) were more likely than organizations with multinational operations (36%) to indicate that they do not plan to change to a shared services model. Shared Services & Centers of Excellence | ©SHRM 2010 35
  36. 36. Demographics: Organization Sector 40% 37% 33% 30% 20% 16% 11% 10% 3% 0% Publiclyowned for- Privatelyowned for- Nonprofit Government Other profit profit Note: n= 330 Shared Services & Centers of Excellence | ©SHRM 2010 36
  37. 37. Demographics: Location Staff Size 39% 39% 40% 30% 22% 20% 10% 0% Small (1 to 99 employees) Medium (100 to 499 Large (500 or more employees) employees) Note: n = 316. Shared Services & Centers of Excellence | ©SHRM 2010 37
  38. 38. Demographics: Organization Operations Multinational, 45% Single country, 55% Note: n = 324 Shared Services & Centers of Excellence | ©SHRM 2010 38
  39. 39. Demographics: Union Status Union, 27% Non-union, 73% Note: n = 328 Shared Services & Centers of Excellence | ©SHRM 2010 39
  40. 40. Demographics: Region 37% 40% 28% 30% 19% 20% 16% 10% 0% Northeast Southeast Midwest West Note: n = 316 Shared Services & Centers of Excellence | ©SHRM 2010 40
  41. 41. SHRM Poll: Shared Services & Centers of Excellence Methodology • Response rate = 18% • Sample comprised 484 HR professionals from SHRM’s membership who were employed by organizations with 250 or more employees. • Margin of error is +/- 4% • Survey fielded May 6 – May 12, 2010 For more poll findings, visit: www.shrm.org/surveys Follow us on Twitter: http://twitter.com/SHRM_Research Shared Services & Centers of Excellence | ©SHRM 2010 41
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