Four big challenges of a HR Shared Services Transformation (part 2)
Transitioning to shared services can help HR organizations transform into more strategic functions that provide maximum value to the business. NorthgateArinso’s experiences with a varied client base provide critical insights into how to approach the transition to shared services most effectively. Four of those key insights include the following:
1. Think business
2. Consider the entire HR service model
3. Balance the global service model with local requirements
4. Manage the HR shared services talent
In part 1 of this post, we discussed the first insight into this process (‘Think business’), which emphasizes the importance of successfully building expectations and an appreciation for shared services with stakeholders throughout the business. Part 2 covers the second insight:
Consider the entire HR service model
HR professionals in different areas do not act independently of each other. The implementation of HR shared services has implications for the whole HR service model and all roles involved, including line management. It involves restructuring the entire HR function to enable efficient and effective service delivery based on clear ownership of HR topics and seamless workflows between the players involved. This is especially important, considering one of the key drivers for implementing HR shared services: Taking on the challenge of becoming a strategic partner by reducing the administrative workload of locally embedded HR professionals and enabling them to strengthen their engagement with activities that have an impact on business success.
Our experiences with companies on their HR shared services journey show that expectations do not match reality. The main reason is that HR shared services centers are often implemented in an isolated way. Insufficient integration into the overall service model can lead to a lack of clarity around ownership of requests and fragmented HR services, which can lead to duplication of activities and long resolution times—all at significant cost to a positive customer experience and the overall perception of HR.
We’ve learned some key lessons from the pioneers and early adopters of the HR shared service model:
- Be aware that one size does not fit all and that the shared services model should match the business structure, be aligned with the HR strategy and meet the specific requirements of the organization.
- Take into account that shared services will fundamentally change the nature of the entire HR service model, its roles and the way customers interact with HR.
- Clearly define roles, responsibilities and accountabilities beyond the HR shared services organization, including centers of expertise, embedded HR staff and line management; and create an engagement contract for how these roles will work together.
- Consider the impact on your HR capabilities, and be prepared to ‘re-skill.’
- Build a suitable governance framework to formalize decision making and effectively manage inherent tensions between centralized HR functions, such as shared services, and locally embedded HR.
- Design your HR processes from an integrated, end-to-end perspective, considering the following aspects for all services provided: who owns, has the specific knowledge, creates solutions and ensures implementation, communicates and coordinates among the different tiers of the service model.
- Consider the impact on line management, its new role with respect to HR topics and its new relationship to HR.
- Provide transparency for who to contact, how and when, changing the reliance of employee and line management on local HR.
- Optimize service delivery by deploying appropriate HR technology, from social media, easy-to-use self-service functionality and knowledge-management applications to automated and integrated case management tools.
- And finally, do not underestimate the change management effort required—within the HR function itself, because the implementation of shared services requires a tremendous ‘mind shift’—but also for the end users of the new service model.
To realize the full potential of HR shared services, it is imperative to consider the entire HR service model. The ultimate goal should always be increasing service orientation and quality by minimizing interfaces and avoiding disruption of the service flow, eliminating duplication and shortening service delivery time.
Next: The third key insight for HR organizations contemplating or beginning the transition to HR shared services: Balance the global service model with local requirements.