How HR shared services can help you

There is no one model for HR shared services, so you can look at the options to find out which ones fit your business best. You may find that as your business grows in size, you are more in need of an HR shared service centre. This is worth considering if you are running a medium-sized business, for example.

One of the core benefits of HR shared services is that they are flexible with customer needs, although certain aspects may benefit some of your business processes more than others.

The different models for HR shared services can be defined by what their ‘sourcing’ and ‘shoring’ designs are:

• in-sourced: these services are resourced in-house and are internal to your business;
• outsourced: these services are resourced externally and are provided by a different company;
• onshore: the HR shared service centre is provided on-site at your business;
• offshore: HR shared services are provided remotely, off-site.

What areas do HR shared services cover?

You can integrate this service with your performance strategy and overall business strategy, using people analytics. HR shared services work with the following HR areas:

• staff payroll systems and data
• employee data
• recruitment processes and data
• other people data and analytics
• learning and training development and services
• administration of leave, sick pay and holiday pay
• HR service/customer support centre.

So, having HR shared services covers many aspects of your HR needs. With this model, employees at your business are considered customers and internal users of a service, which your shared services team provides. HR shared services should be part of a multi-tiered HR service delivery model. A multi-tiered service delivery model includes:

• HR business partnering, in which the company works with HR professionals who can help develop strategies in collaboration with the company’s business managers;
• centres of excellence run by HR specialists who are responsible for implementing and maintaining complex programmes related to benefits, performance and staff training.

With a streamlined HR shared services delivery model, you can ensure smoother operation of these services, which can be integrated with the rest of your HR team and business. To do so, you will need a knowledgeable team of well-trained HR staff who are capable of tackling these tasks.

How to create an HR shared service centre

You will want your HR shared services to run as smoothly as possible.

To prepare for this, read through the tips below as they will help you to create effective processes:

• create clear targets for success;
• consider which service model works best for your business, e.g. outsourced versus in-sourced;
• work out a budget for shared services and what resources would need to be implemented;
• build project teams for HR;
• review your current HR processes and see if they can be updated or integrated more effectively into your new HR shared services;
• transfer HR activities to your new shared services in phases;
• train current HR staff in the new shared services processes, and if necessary recruit new specialist staff with the required knowledge to carry out the new tasks and responsibilities;
• create lines of communication between your new HR shared services team and the rest of your business, adapting the way that HR views your employees and line managers. They will need to see them more as customers and internal users of a service and should communicate what services are available through these new lines of communication.

What are the positive aspects of using HR shared services?

Here are some of the benefits of integrating HR shared services into your business model:

• cutting back on unnecessary costs: by streamlining your human resources services you can reduce your expenditure on business processes. You can also reduce costs by outsourcing human resources services to countries where the equivalent wages are lower;
• you can ensure that your human resources services are sound in terms of legal compliance, which requires specialist training and employee qualifications/experience;
• if you choose to have an in-house service, you can consider offering it to other businesses too, thereby creating another revenue stream;
• with fully qualified and trained HR shared services you can provide a better HR customer service and troubleshoot issues more quickly and effectively. This is because a well-trained HR shared services team will be up to speed with your company’s people analytics, HR strategy and workforce reporting;
• when your HR responsibilities are shared more effectively, it frees up time for your HR specialists to focus on developing your HR strategy.

Disadvantages of outsourcing HR shared services

Although outsourcing HR shared services can save you money, it is worth considering the downsides of doing so in the long term.

Consider the following complicating factors of outsourcing:

Lack of required knowledge/expertise

By outsourcing , you lose the in-house knowledge and expertise of an in-sourced team. An in-sourced team with good knowledge of your staff and their processes will be able to provide more effective and faster customer service resolutions. You may have to train your outsourced team and will need to present your HR strategy to them first. Otherwise, a lack of knowledge among your HR team is likely to slow down troubleshooting workflows during crucial moments.

Lack of availability

An outsourced team may be less readily available to provide customer service to your team than an in-house one. This may slow down your HR processes in the long term.

Other points to consider with HR shared services

Although switching to HR shared services can be an exciting step in the right direction for your business, you must keep in mind what you are trying to achieve in terms of streamlining and cost-saving.

To establish a successful HR shared services department, you need to be prepared for any complications that may arise during the switchover. If your new shared services team does not operate effectively, you might find that it ends up costing you all of the time and money that you were trying to save.

Prevent potential problems by being prepared as you begin making the switch to HR shared services:

Ensure that your team has the required skills to provide the new services

You need to make sure that your shared services team has the necessary skills for the role, including customer service, project management and legal compliance knowledge. Make sure that your staff undergo all of the applicable training to enable them to perform these new duties, bearing in mind that traditional HR roles do not usually involve these responsibilities.

Make sure that a job description is created for roles within the new HR shared services team

To work out what skills your HR shared services team will need, you should outline a list of the key duties and responsibilities that you will require of each member of staff. That way, you can not only match the right member of staff to the roles available, but you will be able to work out what training you need to provide for your staff to fit each role. This way, you can ensure smooth operation, analyse performance, create targets for learning within the team and make sure that shared services staff have the skills required to perform their responsibilities.

Make sure that HR shared services fits in well alongside the rest of your HR team

You should make sure that HR shared services operates alongside your HR team and is integrated effectively with the other processes in your business. For instance, consider creating a shared pool of resources and communications. If possible, consider creating meetups for shared services and your other departments to discuss processes, compare strategies, share ideas and build relationships.

Ensure that HR shared services dovetails with the rest of your business

This is an especially difficult step if your shared services department is off-site or located in a different company. It is therefore important to arrange meetups for shared services to meet the rest of the team; if they are remote, this can be conducted via an online meeting. Consider inviting your HR shared services team to conferences and social events so that they can share ideas with key members of your business and build relationships with them.

Creating an HR shared services team has many potential benefits for businesses that are growing. For instance, you might be looking for a more cost-effective, streamlined approach to handling HR processes. Consider the positive aspects of the model as well as the complications that may arise. Shifting to shared services requires a lot of time and effort, including providing the relevant training to staff and re-evaluating your current HR processes. However, having a highly specialised and knowledgeable services team can increase your ability to provide performance analysis as well as training and learning development programmes to employees and line managers.
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