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July 23, 2010
SHRM Poll: Shared Services and Centers of
Excellence
Shared Services & Centers of Excellence | ©SHRM 2010
SHRM Poll: Shared Services and Centers of Excellence
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Contents:
Introduction
Shared Services Centers
Centers of Excellence
Results by Organizations That Do Not Use a Shared Services/Centers of Excellence HR Transaction Model
Methodology
Shared Services & Centers of Excellence | ©SHRM 2010
Introduction
This study examined the shared services centers (consolidated administrative HR functions) and centers of excellence (localized areas of in-depth HR expertise) models used for administering HR transactions and services. The shared services model, as envisioned by Dave Ulrich, is a way to promote HR expertise and deliver improved services companywide through the division of tasks and expertise.
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Shared Services & Centers of Excellence | ©SHRM 2010
Shared Services Centers
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Shared Services & Centers of Excellence | ©SHRM 2010
Does your company administer and deliver HR transactions through an internal and central shared services department?
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Yes, 75%
No, 25%
Note: n = 484.
Shared Services & Centers of Excellence | ©SHRM 2010
Does your company administer and deliver HR transactions through an internal and central shared services department? (Differences by organization demographics)
• Publicly owned for-profit organizations (74%) were more likely than nonprofit
organizations (53%) to administer and deliver HR transactions through an internal and
central shared services department.
• Large-staff-sized organizations (500 or more employees) (78%) were more likely than
small-staff-sized organizations (1 to 99 employees) (62%) or medium-staff-sized
organizations (100 to 499 employees) (63%) to administer and deliver HR transactions
through an internal and central shared services department.
• Organizations with multinational operations (75%) were more likely than organizations
with single country operations (64%) to administer and deliver HR transactions through
an internal and central shared services department.
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Shared Services & Centers of Excellence | ©SHRM 2010
What business model does your company use to administer and deliver HR transactions?
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37%
2%
61%
Completely in-house shared services
Completely outsourced shared services
A combination of in-house and outsourced shared services
Note: n = 352. Only respondents who indicated that they administer and deliver HR transactions through an internal and external shared services
department were asked this question.
Shared Services & Centers of Excellence | ©SHRM 2010
What business model does your company use to administer and deliver HR transactions? (Differences by organization demographics)
• Government agencies (58%) were more likely than publicly owned for-profit
organizations (24%) or nonprofit organizations (21%) to use completely in-house
shared services.
• Publicly owned for-profit organizations (72%), privately owned for-profit organizations
(68%) and nonprofit organizations (79%) were more likely than government agencies to
use a combination of in-house and outsourced shared services.
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Shared Services & Centers of Excellence | ©SHRM 2010
To what degree has your company's shared services organization…
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0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
increased employee satisfaction with HR service delivery? (n = 277)
gained endorsements and support from the business unit(s) and local leaders it serves? (n = 276)
decreased employee satisfaction with HR service delivery? (n = 267)
lost endorsements and support from the business unit(s) and local leaders it serves? (n = 267)
26%
32%
4%
3%
50%
48%
18%
18%
17%
11%
36%
27%
7%
9%
43%
52%
To a large degree To some degree To a slight degree Not at all
Note: Percentages may not total 100% due to rounding.
Shared Services & Centers of Excellence | ©SHRM 2010
To what degree has your company's shared services organization… (Differences by organization demographics)
• Increased employee satisfaction with HR service delivery
> Privately owned for-profit organizations reported greater average degrees of
increased employee satisfaction with HR service delivery than publicly owned for-
profit organizations.
> Organizations with single country operations reported greater average degrees of
increased employee satisfaction with HR service delivery than organizations with
multinational operations.
• Decreased employee satisfaction with HR service delivery
> Publicly owned for-profit organizations reported greater average degrees of
decreased employee satisfaction with HR service delivery than privately owned
for-profit organizations or government agencies.
> Large-staff-sized organizations reported greater average degrees of decreased
employee satisfaction with HR service delivery than small-staff-sized
organizations.
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Shared Services & Centers of Excellence | ©SHRM 2010
What are the top three positive outcomes your company has experienced as a result of its shared services center?
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1%
3%
9%
11%
14%
14%
18%
19%
25%
31%
33%
36%
37%
0% 10% 20% 30% 40%
Other
Improved ability to calculate metrics around HR functions
Maintained (i.e., did not see an increase in) administrative costs
Improved employee satisfaction with basic HR transactions
Reduced transaction errors
Reduced routine HR-related calls/emails from employees
Reduced/eliminated paper-based record keeping
Greater strategic functioning of HR
Improved efficiency of operations
Better tracking of employee data
Consolidated redundant HR functions
Reduced administrative costs
Reduced HR staff time spent on administrative tasks
Note: n = 247. Percentages do not total 100% as multiple response options were allowed.
Shared Services & Centers of Excellence | ©SHRM 2010
What are the top three positive outcomes your company has experienced as a result of its shared services center? (Differences by organization demographics)
• Improved employee satisfaction with basic HR transactions
> Privately owned for-profit organizations (19%) were more likely than publicly owned
for-profit organizations (6%) to report improved employee satisfaction with basic HR
transactions.
• Reduced transaction errors
> Medium-staff-sized organizations (22%) were more likely than small-staff-sized
organizations (5%) to report reduced transaction errors.
• Reduced HR staff time spent on administrative tasks
> Large-staff-sized organizations (48%) were more likely than medium-staff-sized
organizations (28%) to report reduced HR staff time spent on administrative tasks.
• Reduced administrative costs
> Organizations with multinational operations (44%) were more likely than
organizations with single country operations (27%) to report reduced administrative
costs.
> Organizations with unionized workforces (49%) were more likely than organizations
with non-unionized workforces (30%) to report reduced administrative costs.
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Shared Services & Centers of Excellence | ©SHRM 2010
What are the top three positive outcomes your company has experienced as a result of its shared services center? (Differences by organization demographics, continued)
• Consolidated redundant HR functions
> Organizations with multinational operations (40%) were more likely than
organizations with single country operations (27%) to report consolidated
redundant HR functions.
> Organizations with unionized workforces (45%) were more likely than
organizations with non-unionized (30%) workforces to report consolidated
redundant HR functions.
• Greater strategic functioning of HR
> Organizations with single country operations(26%) were more likely than
organizations with multinational operations (13%) to report greater strategic
functioning of HR.
• Reduced/eliminated paper-based record keeping
> Organizations with single country operations (24%) were more likely than
organizations with multinational operations (13%) to report reduced/eliminated
paper-based record keeping.
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Shared Services & Centers of Excellence | ©SHRM 2010
What are the top three challenges your company has experienced with its shared services model?
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Note: n = 235. Percentages do not total 100% as multiple response options were allowed.“Not sure” and “none” responses were excluded from this
analysis.
4%
10%
18%
22%
23%
24%
27%
30%
37%
40%
43%
0% 10% 20% 30% 40% 50%
Other
Expected cost reductions not achieved
Negative impact on relationship between HR staff and other company employees
Difficulty with outsourced portions of HR services
Expected HR staff time savings not achieved
Time to implement the shared services model was lengthier than expected
Performance metrics for this model have not been effectively tracked
Difficulty with the IT infrastructure to support automated, web-based HR functions
Shifting HR staff roles and responsibilities
Transitioning from traditional HR delivery to the shared services model
Employee resistance toward the shared services model
Shared Services & Centers of Excellence | ©SHRM 2010
What are the top three challenges your company has experienced with its shared services model? (Differences by organization demographics)
• Negative impact to the relationship between HR staff and other company
employees
> Organizations with multinational operations (26%) were more likely than
organizations with single country operations (11%) to report negative impact to the
relationship between HR staff and other company employees.
> Organizations in the midwest (27%) were more likely than organizations in the
northeast (3%) to report negative impact to the relationship between HR staff and
other company employees.
• Performance metrics for this model have not been effectively tracked
> Organizations with single country operations (37%) were more likely than
organizations with multinational operations (19%) to report that performance
metrics for this model have not been effectively tracked.
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Shared Services & Centers of Excellence | ©SHRM 2010
What are the top three challenges your company has experienced with its shared services model? (Differences by organization demographics, continued)
• Employee resistance toward the shared service model
> Organizations with unionized workforces (62%) were more likely than
organizations with non-unionized workforces (38%) to report employee resistance
toward the shared service model.
• Transitioning from traditional HR delivery to the shared service model
> Large-staff-sized organizations (48%) were more likely than medium-staff-sized
organizations (27%) to report transitioning from traditional HR delivery to the
shared service model.
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Shared Services & Centers of Excellence | ©SHRM 2010
Is the shared services center just for your location or the entire company?
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Note: n = 219. HR professionals who were employed by a single location/business unit company did not answer this question.
3%
16%
80%
Just this location
Multiple locations but not the entire company
Entire company
Shared Services & Centers of Excellence | ©SHRM 2010
How many separate locations are served by shared services?
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Note: n = 207. HR professionals who were employed by a single location/business unit company and responded that their organization’s shared
service center was just for their location did not answer this question.
0%
10%
20%
30%
40%
50%
60%
70%
80%
One location Two to five locations Six to 10 locations 11 or more locations
1%
15%13%
71%
Shared Services & Centers of Excellence | ©SHRM 2010
How many separate business units are served by shared services?
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Note: n = 215. HR professionals who were employed by a single location/business unit company and responded that their organization’s shared
service center was just for their location did not answer this question.
0%
10%
20%
30%
40%
50%
One business unit Two to five business units
Six to 10 business units
11 or more business units
8%
23%22%
46%
Shared Services & Centers of Excellence | ©SHRM 2010
Which services are offered through an HR shared services department?
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Note: n = 234. Percentages do not total 100% as multiple response options were allowed.
3%
12%
18%
24%
26%
27%
28%
32%
33%
36%
37%
38%
39%
39%
43%
47%
48%
60%
65%
66%
68%
88%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Other
Expatriate administration
Stock/share administration
Expense reimbursement
Information services
Relocation services
Other benefits (i.e., not health care, retirement, leave or work/life) …
Compensation planning
Onboarding support
Training and development
Performance management
Work/life benefits administration
Pension administration
Time keeping
Recruiting support
Employee assistance/counseling
Employee data collection and maintenance
Leave administration
Payroll
Retirement benefits administration
Flexible spending account administration
Health care benefits administration
Shared Services & Centers of Excellence | ©SHRM 2010
Which services are offered through an HR shared services department? (Differences by organization demographics)
• Relocation services
> Publicly owned for-profit organizations (40%) were more likely than government
agencies (12%) to report offering relocation services through an HR shared
services department.
> Organizations with multinational operations (38%) were more likely than
organizations with single country operations (16%) to report offering relocation
services through an HR shared services department
• Stock/share administration
> Publicly owned for-profit organizations (30%) were more likely than nonprofit
organizations (7%) to report offering stock/share administration through an HR
shared services department.
> Organizations with multinational operations (24%) were more likely than
organizations with single country operations (14%) to report offering stock/share
administration through an HR shared services department
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Shared Services & Centers of Excellence | ©SHRM 2010
Which services are offered through an HR shared services department? (Differences by organization demographics)
• Pension administration
> Organizations with unionized workforces (58%) were more likely than
organizations with non-unionized workforces (32%) to report offering pension
administration through an HR shared services department.
> Medium- and large-staff-sized organizations were more likely than small-staff-sized
organizations to report offering pension administration through an HR shared
services department.
• Other benefits administration
> Large-staff-sized organizations were more likely than medium-staff-sized
organizations to report offering other benefits (i.e., not health care, retirement,
leave or work/life) administration through an HR shared services department.
• Payroll
> Organizations with multinational operations (73%) were more likely than
organizations with single country operations (58%) to report offering payroll
through an HR shared services department.
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Shared Services & Centers of Excellence | ©SHRM 2010
Which services are offered through an HR shared services department? (Differences by organization demographics)
• Retirement benefits administration
> Organizations in the southeast (80%) were more likely than organizations in the
northeast (52%) to report offering retirement benefits administration through an HR
shared services department.
• Flexible spending account administration
> Publicly owned for-profit organizations (75%) were more likely than government
agencies (44%) to report offering flexible spending account administration through
an HR shared services department.
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Shared Services & Centers of Excellence | ©SHRM 2010
Centers of Excellence
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Shared Services & Centers of Excellence | ©SHRM 2010
Do you have centers of excellence that offer HR services/functions?
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Note: n = 222.
Yes, 49%
No, 51%
Shared Services & Centers of Excellence | ©SHRM 2010
Which services do the centers of excellence provide?
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Note: n = 102. Percentages do not total 100% as multiple response options were allowed.
5%
45%
46%
50%
51%
53%
57%
58%
63%
73%
75%
0% 10% 20% 30% 40% 50% 60% 70% 80%
Other
Succession planning
Legal
Diversity programs
Organizational design and change processes
Total rewards planning
HR policy development
Performance management
Employee relations
Recruiting, recruiting and staffing administration or recruiting and hiring policies
Training and education program planning and administration, mentoring, coaching
Shared Services & Centers of Excellence | ©SHRM 2010
Which services do the centers of excellence provide? (Differences by organization demographics)
• Employee relations
> Organizations with single country operations (76%) were more likely than
organizations with multinational operations (50%) to report providing employee
relations through centers of excellence.
> Organizations with non-unionized workforces (74%) were more likely than
organizations with unionized workforces (40%) to report providing employee
relations through centers of excellence.
• HR policy development
> Privately owned for-profit organizations (74%) were more likely than publicly
owned for-profit organizations (44%) to report providing HR policy development
through centers of excellence.
• Other services
> Organizations with unionized workforces (13%) were more likely than
organizations with non-unionized workforces (1%) to report providing other
services through centers of excellence.
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Shared Services & Centers of Excellence | ©SHRM 2010
Over time, to what degree have the services of your central centers of excellence…
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0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
gained endorsements and support from the business unit and local leaders it serves? (n = 100)
lost endorsements and support from the business unit and local leaders it serves? (n = 94)
increased employee satisfaction with HR service delivery? (n = 99)
decreased employee satisfaction with HR service delivery? (n = 95)
42%
1%
23%
1%
35%
15%
48%
14%
13%
34%
15%
36%
10%
50%
13%
49%
To a large degree To some degree To a slight degree Not at all
Note: Percentages may not total 100% due to rounding.
Shared Services & Centers of Excellence | ©SHRM 2010
Over time, to what degree have the services of your central centers of excellence… (Differences by organization demographics)
• Increased employee satisfaction with HR service delivery
> Privately owned for-profit organizations reported greater average degrees of
increased employee satisfaction with HR service delivery than publicly owned for-
profit organizations.
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Shared Services & Centers of Excellence | ©SHRM 2010
Does your company have decentralized HR generalists in separate business units and/or individual locations?
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Note: n = 232.
Yes, 58%
No, 42%
Shared Services & Centers of Excellence | ©SHRM 2010
Does your company have decentralized HR generalists in separate business units and/or individual locations? (Differences by organization demographics)
• Publicly owned for-profit organizations (71%) were more likely than government
agencies (35%) to report having decentralized HR generalists in separate business
units and/or individual locations.
• Organizations with multinational operations (72%) were more likely than organizations
with single country operations (44%) to report having decentralized HR generalists in
separate business units and/or individual locations.
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Shared Services & Centers of Excellence | ©SHRM 2010
Organizations That Do Not Use a Shared
Services/Centers of Excellence HR
Transaction Model
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Shared Services & Centers of Excellence | ©SHRM 2010
What is the primary reason for your company not adopting a shared services business model?
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10%
1%
3%
9%
10%
10%
12%
46%
0% 10% 20% 30% 40% 50% 60%
Other
Current outsourcing arrangement of HR functions works well
Concerns about loss of support from the business units regarding HR service delivery
Model development/implementation in progress
Lack of upper management support for this HR service delivery model
Concerns about cost escalation
Concerns about lowered employee satisfaction with HR service delivery
No perceived need for this HR service delivery model for our organization
Note: n = 102.
Shared Services & Centers of Excellence | ©SHRM 2010
Does your company plan to change to a shared services/centers of excellence HR transactions model?
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Note: n = 104. Only respondents who indicated that their organizations did not administer and deliver HR transactions through an internal and
external shared services department were asked this question.
0%
10%
20%
30%
40%
50%
Yes, within 12 months
Yes, within 13 to 24 months
Yes, within the next 2 to
5 years
No Not sure
10%7%
5%
37%
42%
Shared Services & Centers of Excellence | ©SHRM 2010
Does your company plan to change to a shared services/centers of excellence HR transactions model? (Differences by organization demographics)
• Among organizations that do not currently administer and deliver HR
transactions through shared services/centers of excellence:
> Nonprofit organizations (81%) were more likely than publicly owned for-profit
organizations (35%) to indicate that they do not plan to change to a shared
services model.
> Organizations with multinational organizations were more likely than organizations
with single country operations to indicate that they plan to change to a shared
services model within 13 to 24 months (23% compared with 5%) or within the next
2 to 5 years (18% compared with 3%).
> Organizations with single country operations (78%) were more likely than
organizations with multinational operations (36%) to indicate that they do not plan
to change to a shared services model.
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Shared Services & Centers of Excellence | ©SHRM 2010
Demographics: Organization Sector
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Note: n= 330
0%
10%
20%
30%
40%
Publicly owned for-profit
Privately owned for-profit
Nonprofit Government Other
37%
33%
16%
11%
3%
Shared Services & Centers of Excellence | ©SHRM 2010
Demographics: Location Staff Size
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Note: n = 316.
0%
10%
20%
30%
40%
Small (1 to 99 employees) Medium (100 to 499 employees)
Large (500 or more employees)
22%
39% 39%
Shared Services & Centers of Excellence | ©SHRM 2010
Demographics: Organization Operations
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Note: n = 324
Single country, 55%
Multinational, 45%
Shared Services & Centers of Excellence | ©SHRM 2010
Demographics: Union Status
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Note: n = 328
Union, 27%
Non-union, 73%
Shared Services & Centers of Excellence | ©SHRM 2010
Demographics: Region
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Note: n = 316
0%
10%
20%
30%
40%
Northeast Southeast Midwest West
16%
28%
37%
19%
Shared Services & Centers of Excellence | ©SHRM 2010
SHRM Poll: Shared Services & Centers of Excellence
• Response rate = 18%
• Sample comprised 484 HR professionals from SHRM’s membership who were employed by organizations with 250 or more employees.
• Margin of error is +/- 4%
• Survey fielded May 6 – May 12, 2010
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Methodology
For more poll findings, visit: www.shrm.org/surveys
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