Shared services in HR

HR shared services streamline HR tasks through centralized, technology-enabled solutions, enhancing efficiency and employee satisfaction. This model allows HR to focus on strategic roles, improving compliance, performance, and cost savings while presenting implementation challenges.

By Brad Nakase, Attorney

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Table of Contents

1. What is HR shared services?

2. Advantages of HR shared services

3. Difficulties with Shared HR Services

4. Best practices for HR shared services

5. Conclusion

What is HR shared services?

An HR shared services model can help HR departments deliver their services to employees faster and more effectively. It presents an opportunity to separate the operational from the strategic so each part of the department can be most effective in providing a positive employee experience. Let’s take a closer look at HR shared services, their benefits and challenges, and best practices.

The HR Shared Services function as a centralized center for HR administrative and operational tasks, featuring technology-enabled automation and self-service for employees, as well as multi-tiered service levels and solutions. This makes it possible for businesses to deliver regular HR services as effectively as possible.

The multi-tiered human resources service delivery model includes HR shared services. It makes it possible for the other HR department divisions to concentrate on strategic projects.

Advantages of HR shared services

Using HR shared services can help your company in a number of ways, such as:

HR takes on a more strategic role

The more seasoned HR specialists can concentrate on strategy because of the separation of duties. This offers more opportunities to evaluate HR’s effectiveness using HR metrics that link the department’s accomplishment of its strategic goals to the the company’s success. It is imperative that HR participate in the creation of the business plan in order to be a true business partner. It guarantees that an organization’s business plan places a high priority on employee satisfaction and people management.

Compliance and consistency

You may be sure that you’re in compliance with rules and regulations because HR matters are always dealt with in the same, uniform manner. This improves the working environment for employees and reduces risks for the company.

Improved performance

Establishing well-defined roles for administrative procedures enables companies to achieve optimal performance. Streamlined procedures and improved workflows make this possible. Operational excellence leads to enhanced employee experience and efficiency in addition to superior HR services.

Increased employee satisfaction

Workers swiftly and easily get what they need and have their problems resolved. This improves both the digital and overall worker experience. Workers now anticipate that all systems will be engaging, simple to use, and meet their demands and needs. This includes the systems they use on the job. Employee dissatisfaction arises when expectations and experiences don’t match.

Reduced costs

There are various ways that HR shared services can save expenses for businesses. For instance, transactional HR services require fewer seasoned HR specialists, which lowers labor expenses. Additionally, cost-saving measures are aided by the efficiency gained through the simplification and streamlining of services.

Difficulties with Shared HR Services

Implementing HR shared services is not always easy, but it can help human resources reach operational success and make the department more strategic. Organizations deal with a number of difficulties.

For most organizations, there is no digital roadmap. A well-defined digital strategy and roadmap are vital for Human Resources to integrate technology that enhances employee experience and creates efficiencies in light of the growing automation trend. Simple tools like live chat and virtual agents like ServiceNow are examples of example technologies. More sophisticated applications like robotic process automation (RPA) and solutions for HR analytics and reporting are also relevant. Instead of having a well-thought-out plan in place for their HR digital transformation, a lot of companies, unfortunately, employ digital solutions on an as-needed basis.

Determining the business impact of HR shared services is a challenging task. Organizational leaders may therefore take some time to realize its advantages and the reasons it should be given priority. In light of this, you need to precisely define the value that shared services bring to the company.

No one size fits everyone. Regretfully, not every business unit may find that shared HR services are the best fit. In certain cases, HR shared services might help and support one business unit while being a barrier for another. Because of this, it is essential to perform a cost-benefit analysis in order to figure out which business units, the organization as a whole, and the cost benefit from it. An example would be collaborating with a certified global upskilling partner who excels at developing skills for common business domains but might not have the capacity to do so in highly specialized ones.

Making sure that all procedures and actions, from SMEs to new hires working in the human resources shared services center, are properly documented is essential when making the switch to an HR shared services model. This is an ongoing project. To ensure that the HR shared service operates as efficiently as possible, it is necessary to control the time needed to transfer, document, and apply knowledge.

Within the HR department and throughout the company, collaboration might suffer. There could be a gap between the various components of the HR team, specifically between the shared services and other, more specialized or strategic team members. Managers must therefore make a deliberate effort to foster a team mentality. Likewise, maintaining constant communication and engagement with employees is still necessary even with an HR shared service center. As a result, it’s critical to interact and establish new connections with significant business unit stakeholders on a regular basis. Successful businesses depend on effective systems, but those systems only become effective when strong relationships are built between them and the internal customers they serve.

Best practices for HR shared services

How can your HR department manage and oversee a creative and valuable HR shared service center based on the HR shared services model?

Transform

The first step toward HR shared services maturity is transformation. The majority of organizations today are in this position. Among the activities are:

Find out which tasks will be covered by HR shared services. Should the task entail a substantial amount of procedural or administrative work, it can qualify for the HR shared service center. You would also take into account HR tasks that are simple and repetitive and have a high potential for standardization. Payroll, benefits administration, hiring procedures, organizational and staff information management, and some learning and development initiatives are examples of common HR services tasks.

Clearly define positions and duties. Assemble your HR shared services team and decide who will be in charge of what. For instance, who among the employees will be in charge of what employee services? This is crucial if you’re implementing HR shared services in a global organization since it will consolidate employee services across several sites.

Select the appropriate technology to help you and your staff. Your company should be able to deliver services successfully and efficiently with the help of HR shared service solutions. When selecting an HR technology vendor, some features to consider are knowledge management and ticketing policies, issue routing, SLA monitoring, and employee self-service.

Additionally, remember that these apps typically handle sensitive employee data, such contact or medical details. You should so search for HR solutions that provide a high degree of data protection. Ideally, you would start with a mobile-friendly, cloud-based solution. Furthermore, it ought to interface with your main HRIS.

Make the most of its potential

As HR Shared Services reach the next level of development, they ought to be able to:

Provide enlarged or new services. The HR shared services company is expanding the range of services it provides. This can entail extending services to additional regions. Global business services (GBS) is a popular means for established shared services companies to obtain extra advantages through global administration and integration, claims Scott Madden. GBS firms are by their very nature global in their client base and tend to incorporate higher-value operations. Naturally, in this instance, your clients are your staff members.

Increase the capacity for automation. Processes managed by HR shared services have a significant potential for automation because they are standardized and repeatable. Consider which procedures require little to no human intervention, then automate those. Here are a few examples of HR automation:

Pre-employment evaluations
Automated email chains
Creating official PDF documents automatically during the onboarding of new employees
When an employee is let go, access to applications is removed.
Expense claims

Make the most of analytics and reporting. HR is becoming known for its use of metrics in reporting, measuring, and overseeing HR activities and programs. This is still helpful and will stay so. Nonetheless, analytics has received more attention lately, and its applications now include diagnosing, prescribing, and predicting in addition to monitoring, reporting, and measuring. Utilizing various forms of HR analytics is therefore becoming more and more essential.

To forecast future results, predictive analytics makes use of both historical and current HR data.

Prescriptive analytics provides potential courses of action that businesses might pursue based on the data and patterns that are identified by predictive analytics. Diagnostic analytics helps identify the root cause of an issue so that it can be properly addressed.

Incorporate social media. The most forward-thinking businesses understand that social media interaction is essential to connecting with both consumers and staff. The most astute HR departments use a variety of social media channels in addition to LinkedIn to market their company and draw in talent. A little more than half of recruiters use Facebook, compared to 87% who use LinkedIn, according to Jobvite’s Recruiter Nation poll. On the other hand, it is highly probable that applicants will check job postings on Facebook. In actuality, Facebook was utilized by 67% of job searchers who utilized social media to locate their most recent position.

Improve

Well-developed HR shared service centers are constantly improving their operations and utilizing a lot of automation and analytics.

Process automation, also known as robotic process automation, makes it possible to fully automate the integration of various HR services. One example would be to set up automated reminders for when someone forgets to activate their account. As a result, there is less spam and more focused conversation. Creating flows across HR procedures is another example. In the event that an applicant gets hired while lacking an important talent, the learning system may suggest that the candidate receive training in that area. These system integrations are the outcome of robust and valuable automation.

Focus on constant growth. Get input from your staff regarding the HR shared service center and consider how to improve your processes. Regular surveys are one way to accomplish this. Additionally, take into account the organization’s evolving needs, such as those resulting from rapid growth or policy changes. You can establish a culture of continual improvement by being responsive.

Make an electronic roadmap. The absence of a well-thought-out digital strategy is a major issue facing shared service departments today. An ambitious and well-defined aim, along with a technological roadmap help the shared service center transition from an administrative stewardship to a lean, state-of-the-art technology center.

Invest in the ongoing professional development of staff members providing shared HR services. One recurrent issue is that workers in shared services sometimes have few opportunities for professional growth. To put it another way, a company can present a more accurate picture of the jobs that will be required in the future if it has a clear digital roadmap and vision. This covers roles related to automation and other technologies, as well as data input and agile project management. Giving your HR shared service staff continual training can assist your company in maintaining efficiency even as complexity rises.

Conclusion

Employers and HR divisions should constantly aim to offer employee services in an affordable and productive way. Turning human resources into HR shared services can be an ideal way to improve employee satisfaction while putting more of an emphasis on HR strategy that is in line with business objectives.

Leaders must, however, take into account the difficulties ahead of time and take proactive measures to address them before making an investment in HR shared services. Long-term investments are made in pooled HR services. In order to maintain the benefits of an effective HR shared services model, companies need to have visionary leadership, be prepared to make ongoing investments in technology, and invest in the professional development of HR shared services staff members.

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