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Framework for shared services
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Overview of HR Shared Services

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Overview of HR Shared Services

  1. 1. Meeting notes from the <br />IQPC 9th Annual Asian Shared Services & Outsourcing for HR Conference<br />May 4-5, 2011<br />Kuala Lumpur, Malaysia<br /><br />1<br />Overview of HR Shared Services<br />
  2. 2. Objective of Shared Services<br /><br />2<br />Combine common HR functions to for advantages <br />economies of scale<br />cost-savings<br />Front-line HR focus<br />HR strategic work<br />business partner w/ BU managers<br />
  3. 3. Shared Services Continuum - Centralization<br /><br />3<br />pull together “back-office” administration under one roof in a single location, managed as a single team<br />efficiency gain from<br />elimination of the work that was previously done in multiple groups and locations<br />processes reengineered<br />optimize business workflow for results<br />in most cases, work is simply relocated to a new location but, workflow largely remains the same before the centralization <br />Generally speaking, centralization doesn’t go far enough<br />
  4. 4. Shared Services Continuum –Shared Services<br /><br />4<br />focus on customer service delivery by<br />developing service level agreements (SLA)<br />with performance metric score-cards<br />cost is managed<br /> a true shared service model looks at end-to-end processes globally<br />
  5. 5. Shared Services Continuum –Off Shoring<br /><br />5<br />Companies are increasing their presence in the global marketplace<br />The consequence for HR<br />delivering global policies relevant to the new market<br />weaving in corporate policies with local practices<br />Companies gain by leveraging the consistency of a shared service model globally in disparate locations<br />
  6. 6. Shared Services Continuum –Out Sourcing<br /><br />6<br />Companies with matured shared services<br />May look for further cost-reduction and labor arbitrage<br />Turns to third-party service providers <br />manage the organization’s transactional tasks<br />may outsource a specific function such as payroll or staffing<br />A more aggressive a strategy may outsource the entire shared services function<br />only the strategic and business partnering function remains in-house<br />
  7. 7. Foundation for Shared Services<br /><br />7<br />Process Reengineering<br />Is the process by which HR organizations thoroughly evaluate, assess and align HR policies<br />Global consistency is a strict requirement<br />Only critical country exceptions are allowed, typically for legal purposes.<br />Allowing for business process exceptions, continuing to do things they used to be, creating process excursions, erodes the benefit of shared services.<br />
  8. 8. Foundation for Shared Services<br /><br />8<br />HRMS<br />A common infrastructure allows for “sharing”<br />business processes, service delivery and knowledge-base across the globe<br />maintains all data related to the entire employee life-cycle<br />rely on “employee self-service”<br />Self-service is built on the premise of consistent policies which applies to employees globally<br />reduce reliance on in-person contact with HR for basic queries and administrative services<br />Moving HR to the intranet is an accepted practice<br />
  9. 9. Foundation for Shared Services<br /><br />9<br />Change Management<br />Managing expectations is essential<br />employee wants the same level of direct one-to-one contact<br />convince management teams the value of offloading tactical work <br />while line managers will want to see higher strategic work delivered by HR<br />HR team will need to be retrained<br />Skills to perform in a shared service center<br />front-line HR will need to develop strategic consulting skills to work with business units.<br />Any change will require executive sponsor such as the CEO and CHRO<br />
  10. 10. HR Culture Shift<br /><br />10<br />
  11. 11. Shared Services Functions<br /><br />11<br />
  12. 12. Shared Services Functions – HR Administration<br /><br />12<br />HR Administration: the various administrative work required of HR<br />Transactions may include<br />interview arrangement, training course scheduling, benefits management, and performance review processing<br />strategy can reduce manual transactions<br />Requires standardization in processes and policies<br />coupled with an automation strategy<br />
  13. 13. Shared Services Functions – Employee Queries<br /><br />13<br />Employee Queries: Ad hoc employee requests<br />take up a significant portion of an HR professional’s time<br />Business group managers want HR to respond and provide service to the organization<br />HR can provide value on strategic level but<br />administrative and first-line response can be delivered in a different manner<br />
  14. 14. Shared Services Functions – Vendor Management<br /><br />14<br />Vendor Management: Many HR already outsource certain aspects of services<br />may be benefits administrators, payroll processors or recruiting agencies<br />A central management team to<br />contracts negotiations, management of services and performance indicators<br />
  15. 15. Shared Services Functions – Data Transaction<br /><br />15<br />Data Transactions: All HR functions require access and use of relevant HR data<br />ad hoc requests or silo data reporting slows down an organization’s ability tap into organization HR metrics and indicators<br />ideally, HR functions can leverage on a single data platform<br />
  16. 16. Location Strategy: Global Service Centers<br /><br />16<br />Americas: The Americas region, particularly in the US, have the most established shared services models<br />technology, common language, standardized policies make it easier to migrate towards a shared services platform<br />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<br />
  17. 17. Location Strategy: Global Service Centers<br /><br />17<br />EMEA: Advancement in shared services has been slowed due to the region’s cumbersome regulatory and data-protection environment<br />HR technology platforms are beginning to allow pan-Europe approaches to payroll and recruitment administration<br />APAC - China: For many US MNCs, China presents the biggest market share potential for growth<br />China is in its infancy stages of developing shared services organizations<br />But, as companies grow, they invest in setting up infrastructure for shared services. <br />focus on Greater China (China, Hong Kong and Taiwan)<br />as teams have more experience, many companies are moving their Southeast Asia organizations under the China umbrella<br />
  18. 18. Location Strategy: Global Service Centers<br /><br />18<br />APAC India: As the global leader in business process outsourcing, India has developed core expertise in managing services for large multinational corporate clients.<br />this may include benefits management, payroll processing, employee records and HR reporting<br />
  19. 19. Transformation Challenges<br /><br />19<br />A clear decision and direction set for by head of HR will help set the stage. Items to address:<br />Why make any changes?<br />What are the business and HR imperatives driving the change?<br />How will the organization gain with this change?<br />Define what is changing<br />What stays the same?<br />What changes?<br />What are the desired results?<br />Roles and Capabilities <br />Define and train for skills needed for new roles in shared service center<br />Develop new skills for those front-line HR professional remaining in the business partner role<br />Employee Feelings/Emotions<br />Helping employees through the change process<br />
  20. 20. Conclusion<br /><br />20<br />HR is required to evaluate its own service delivery strategy to meet this demand<br />Business is growing in sheer size and complexity<br />Expectation of HR service delivery is unprecedented<br />A strategic assessment of HR structure can go a long way in optimizing HR<br />both in terms of services and business partnership <br />shared services model allows HR to deliver excellence in both the tactical and strategic aspects<br />neither of which can be accomplished well if kept under existing conditions simply by adding more HR headcount<br />
  21. 21. References<br /><br />21<br />“New Era for HR Shared Services,” Business Week Research Services, September 2007<br /> “Finding your place on the HR shared services continuum,” Mercer, 2008<br />“Beyond Centralization: Driving High Performance Through Fully Realized Shared Services,” Accenture, 2007<br />IQPC 9th Annual Shared Services & Outsourcing for HR - HR Transformation Summit. May 4-5, 2011<br />
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