The document discusses a SHRM poll on shared services and centers of excellence models for administering HR transactions and services. Some key findings include: - 75% of organizations administer HR transactions through an internal shared services department. Larger organizations and those with multinational operations were more likely to use this model. - 61% use a combination of in-house and outsourced shared services, while government agencies were more likely than others to use completely in-house services. - Top positive outcomes of shared services included reduced HR staff time on administrative tasks and reduced administrative costs. Larger organizations saw greater benefits. - Top challenges included employee resistance and transition difficulties. Multinational organizations saw more relationship challenges between HR

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

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. 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. Shared Services Centers
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5. Does your company administer and deliver HR transactions through an
internal and central shared services department?
No, 25%
Yes, 75%
Note: n = 484.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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. 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.
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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. 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.
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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.
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24. Centers of Excellence
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25. Do you have centers of excellence that offer HR services/functions?
Yes, 49%
No, 51%
Note: n = 222.
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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. 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. 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. 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. Does your company have decentralized HR generalists in separate
business units and/or individual locations?
No, 42%
Yes, 58%
Note: n = 232.
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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. Organizations That Do Not Use a Shared
Services/Centers of Excellence HR
Transaction Model
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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. 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. 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. 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. 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. Demographics: Organization Operations
Multinational, 45%
Single country, 55%
Note: n = 324
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39. Demographics: Union Status
Union, 27%
Non-union, 73%
Note: n = 328
Shared Services & Centers of Excellence | ©SHRM 2010 39

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. 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