Analysts and thought leaders have been touting the benefits of shared services for some time now, but many organizations have yet to implement shared services for HR. Many customers we speak with start the journey to HR shared services by assessing the feasibility of the project - it is a big undertaking and the costs and benefits should be weighed before proceeding. The good news is that most customers find the returns on invested time, money, and resources are well worth the initial investment. In this post, we’ll take a look at how you might evaluate the feasibility of switching to a shared services model, covering the kinds of investments you can expect to make in your transition as well as the significant benefits and valuable gains of an HR Shared Service Center.
Anticipate Your Up-front Investments in HR Shared Services
The cost drivers for transitioning to shared services largely depend on your organization’s structure but there are general drivers that you can anticipate. For instance, you’ll likely see costs associated with implementing new technology to support the new ways your employees will work. Shifting employees away from old habits and training them in new ways of working is critical at this time. Implementing change management can support the HR Ops team’s transition into new ways of doing their jobs, minimizing frustration and getting employees back to work quickly. The costs associated with a change management program should be considered.
You’ll also want to have a plan in place to measure your KPIs so you can continuously optimize your Shared Service Center. Ideally, the technology you implement to support the HR shared services team should take this into account, so you can measure SLA performance, easily streamline processes, and identify opportunities for improvement. This will also help you prove your ROI over time.
Cloud technology means that you no longer need to co-locate employees in one center, but if you choose to, you’ll also need to investigate which current office space could house your HR operations team or if you need to invest in a new space. You’ll need to map out your ideal tiered org chart, and by auditing your existing talent pool, you can identify areas where you need to hire or re-train existing employees - and if you’ll need to financially incent any employees to move geographically.
Reap the Benefits
The costs of new buildings, new technology, new teams, and new hires may seem to be hard to swallow, but it’s important to measure the estimated benefits you’ll see to truly understand the feasibility of shared services for HR. Ultimately, a shared services model can save you significant amounts of money by increasing the agility and efficiency of your HR operations. Eliminating manual work and centralizing HR information and processes saves substantial amounts of time and resources, allowing your team to work quickly to resolve issues faster.And standardizing processes provides your team with consistent information and ways of working, and reduces the risk for error, translating into faster response and resolution times.
Not only will you see a significant increase in your team’s efficiency and quality of service, you’ll also see positive effects on your employees. Fast, consistent, and efficient HR Service Delivery means that your employees are receiving the best levels of support, helping them resolve their questions quickly and get back to work faster. This customer-like support also translates into positive employee experience, which substantially increases productivity. The impact of shared services on employee experience yields real value and serious benefits for your company.
Nicole Lindenbaum is the Director of Product Marketing at PeopleDoc by Ultimate Software. Nicole leads the global messaging strategy for PeopleDoc by translating technology into business benefits HR can actually understand. With significant experience in HR technology, Nicole writes and speaks about HR service delivery, employee experience, digital transformation, and the future of work. Nicole holds a BFA from Syracuse University and an MBA from Washington University in St. Louis. She lives in Brooklyn, NY.