How to implement HR shared services in your workplace

By Indeed Editorial Team

Published 26 September 2022

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

HR shared services is a way of centralising the HR services within a company. They operate in a centralised hub rather than in different areas of the business and can help a business to streamline its HR department, making analytics and information accessible to employees. If you work in human resources, you may wonder how to implement shared services in your department. In this article, we look at what HR shared services are, how to implement them, the benefits of using shared services and some extra tips.

What are HR shared services?

HR shared services is a different way of implementing human resource services. Rather than organising administrative activities independently, shared services mean that organisations arrange them all together in one central technological hub. Employees may engage with the shared services independently by logging into the hub rather than going through an HR manager. This saves administrative time on the HR manager's behalf, enabling them to focus on other parts of their job. When done effectively, the shared services model HR can help businesses be much more streamlined and efficient.

How to implement the HR shared services model

If you're interested in implementing the shared services model in your department, here are some steps:

1. Analyse your current HR department

Think about different HR services like payroll, recruiting, relocation, benefits and leave entitlement, and consider how you can centralise these services into a hub. At this stage, it's a good idea to look at how certain parts of the human resources department are functioning. For example, consider any issues during your latest recruitment drive, and consider how moving to a centralised hub could help with this.

Related: How to write a human resources cover letter

2. Create clear objectives for the shared services

Think about the objectives of your shared services. For example, you may want to use these kinds of services to boost profits or hire talented staff members. Or, you could want to enable your staff to have more say in the service. Having a set of specific goals can help you to properly speak to your staff members and suppliers to ensure that you have the same specifications. It's a good idea to write these objectives down initially, as doing this could help you think strategically and ensure that you don't miss anything.

3. Communicate with your team

The next step is to communicate with your team about the changes to your department. Tell your team about your changes. You could, for example, host a meeting to discuss the move to the shared services model. In the meeting, explain what shared services model HR is and how it can benefit your company. Focus on the positives of the change, but also ensure you're honest about what the change means for the company.

Related: Core HR functions and different human resource specialities

4. Speak to the wider business

Talk to people in the wider business. For instance, you might want to consult management about a new hiring process or consult with the accountancy department about payroll and how the centralised system could change how payroll operates. As HR impacts all employees, ensure that everyone knows how they can access HR services and get the most relevant help when they need it. Being as open as possible throughout the change can help you to avoid any issues later on.

Related: What is payroll processing? (Types, how-to guide and tips)

5. Build a team for the shared services model

The next step is to build a team to administer the shared services hub. This typically includes a few people from the HR team who are adept at handling change. This team can worth with you to move the services over, troubleshoot any issues and answer questions from other employees. You may also wish to include some people that aren't in the HR team. For example, some of your IT professionals could help with the centralisation of the services.

Related: What is human resources? (With duties, skills and tips)

6. Transfer the process in stages

The next step is to start the actual transfer to HR shared resources. This is the main actionable step of the whole process, but you can do it in stages. If you slowly change the processes, you may avoid major disruptions and troubleshoot as you go, adapting and being flexible when issues arise. Doing the transfer process in stages also gives your employees time to adjust to the concept of shared services.

7. Expect minor issues to occur

As with any big change in the workplace, minor issues may pop up when you transfer to the shared services model. Provided that you allow for these, they may not turn into more serious issues. By having the right support and being open about the possibility of problems, you can handle any problems quickly and effectively.

8. Ask for feedback as you go

As you transition into shared services, keep asking your employees for feedback. Make sure that you're fully aware of your employees' opinions about the change and whether they have any issues. This can enable you to make any adaptations if necessary, and it could also help your business relationships with your colleagues, as they may feel like their voice is valuable and appreciated.

Benefits of shared services models for HR

Here are some key benefits of the shared services model:

Cost reduction

Streamlining any kind of service, including HR, usually results in cost reduction. If you start using the same provider for all of your HR services, you may find that you can pay cheaper rates (if outsourcing) or that you increase productivity (if working in-house). Both of these tactics can result in extreme reductions in cost. You can then use these savings within the HR department, for example, with new materials for training staff, or it can go towards the business's overall profits.

Related: How to communicate budget cuts to staff (with tips)

Better services

Generally, streamlining services is more productive and improved. The services are typically more organised, making them much easier to utilise. If you only use one resource for all of your HR needs, then you may find it easier to learn how to perform certain actions or resolve certain issues when they occur.

More productivity

Another benefit of using the shared services model is that it can help you to be more productive as a company. As it's quicker and easier to use, you can save time in the HR department and focus on other aspects of your job. For example, if a shared services hub takes care of the administrative tasks, then you could instead focus your efforts on hiring the right members of staff and ensuring that you can train them in the best ways possible.

Related: How to structure your workday for maximum productivity

Flexibility

Using shared services can also give your workplace more flexibility. This is can be very beneficial, as it can protect you through workplace changes. For example, if another managerial team purchases your business, having shared services can help you to navigate the shift, taking one hassle away from the business in itself.

Data insights

One of the main advantages of using centralised services is that they typically include data insights. You can log on to your dashboard and look at the analytics, allowing you to look at trends. For example, you may assess payroll data and discern when it means that somebody is due a pay rise. You could also look at trends for things like relocation to assess where to branch out.

Related: How to define problems (with definitions and steps)

Communication

The fact that all employees can access some of the HR shared services leads to improved communication. Individual employees can access some areas, although others are managerial only. If an employee sees something on the HR services platform that they would like to discuss further, they can then speak about this to their manager or the rest of the team.

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