hr shared services: best practices, business model and technology

HCI White PaperApril, 2009

HR Shared Services: Best Practices, Business Model and Technology


2HCI • 1250 Connecticut Avenue NW • Suite 200 • Washington, DC 20036 • 866.538.1909 • www.hci.org

This information in this whitepaper is based on the Human Capital

Institute webcast HR Shared Services: Best Practices, Business

Model and Technology, held April 2, 2009, and the information

provided by its presenters, Jim Scully, Founder, HR Shared Services

Network, and Barbara Levin, Senior Vice President, Enwisen.

IntroductionTransforming HR to spend less time on administration and transactions, and more time on strategic work, has been easier said than done. HR shared services plays a vital role in achieving this transformation. Effective HR Shared Services can actually improve the delivery of HR services with fewer resources and lower costs, allowing HR talent to focus on adding value to the business. But how do you get there?

This paper will explain the concept of HR Shared Services, its value proposition, functions and scope, and the best practices that make it effective. The paper will also discuss the multi-tier approach to HR Shared Services , and provide a preview of “HR Shared Services 2.0”

HR Shared Services TodayVery simply put, HR Shared Services consolidates and shares – across an organization’s locations, divisions and business units – the administration and execution of the delivery of HR services to the workforce for the purpose of:




• Better consistency

• Economies of scale

• Improved quality

• Better ROI on technology investments

• Realigning HR talent

• Streamlined costs

More than a decade after large U.S. companies began to adopt shared services in human resources (HR), this delivery model has proven its worth by cutting administrative costs, reducing transaction errors and generating greater employee satisfaction with basic HR processes. Now, as companies devise human capital management (HCM) strategies to give them a competitive edge in hiring, training and deploying employees to meet business goals, HR shared services has entered an era of increased relevance and value.1

Functional ScopeHR Shared Services vary depending on the model used, the employer’s needs and the needs of its employees. Less prevalent functions include relocation assistance and Workers Comp administration. More prevalent are call centers, and personnel and data administration. In between are a wide range of functions that include the following:

• HR Reporting & Analytics

• Defined Benefit Administration

• Defined Contribution Administration

• Unemployment Comp. Administration

• Leave Administration

• Staffing & Recruiting

• Employee Relations

• Training Administration

• Benefits Administration

• Payroll Administration

• HRIS Support

By consolidating these many transactional functions HR can begin its transformation to strategic partner.

1A New Era for HR Shared Services – Business Week Research Services



What makes up the DNA of a shared services center? There are three major components: The functional scope of the center (how and at what level it performs its services), the value proposition to the employer and employees, and the service scope (the actual services it offers). Myriad other factors contribute to the DNA: The employer itself, its history, background, values, leadership, and corporate culture; the population to be served and the technology base.

Moving Toward HR Shared ServicesOnce you have decided to proceed what steps do you take? It’s important to realize that the value proposition and the anticipated scope of the project affects people, process, the organization, and technology. These four fundamentals in turn will affect the shared services initiative. These broad headings are further delineated as shown in Figure 3.

Figure 1. Pivotal Early Decisions

In the initial stages of planning a shared services center, it is important to know that each of the four major fundamentals are by nature interactive. That interaction will shape the key early decisions about implementation. More than a few of the pivotal decisions revolve around the functional and service scope of the shared services center. What are the best practices in this regard?

© HRSSN 2009



Shared Services Best PracticesAs shown in Figure 2, there are functional and management best practices with a significant overlap in the realm of operation.

Figure 2. Shared Services Best Practices

Let’s look at the operational best practices in more detail.

Case Management

Efficient case management is highly automated — routing, documentation, and tracking should always be automated. It should also support root cause analysis, trend analysis, and manpower planning. Case management should fully integrate with HRMS, knowledge management, and the employee portal.

Knowledge Management

Sound management of the knowledge base is a crucial task. The knowledge base is at the heart of a shared services center. One key practice: Use the knowledge base as a supplement to the human brain, not as a replacement. Knowledge management shares some practices with case management, specifically the need for automation in order to promote fast, consistent research and resolution, and the ability to integrate with HRMS, case management, and the employee portal.

Service Level Management

“Sound fundamentals” describe the best practices associated with service level management. There are two important considerations to achieve excellence in service level management: Commit to the standard output of effective processes, not the minimum acceptable service level, and strive to consistently meet customer needs at the lowest possible cost. Then measure your service level, not because it can be measured but because it is valued by your stakeholders.

© HRSSN 2009



Delivery Model & Process

The list of best practices in this area of shared service is long but essential:

• Focus on end-to-end process accountability

• Strive for first call resolution and cradle-to-grave case ownership

• Align with broader organizational culture, values and the leadership and decision making structure

• Focus on the total cost of service, not just direct delivery costs

• Minimize low-quality input channels (fax, e-mail/hard copy forms, spreadsheets); don’t let “garbage in”

• Don’t centralize manual data entry; capture data one time, at the source

• Make standardization and automation prerequisites for functional/service scope inclusion

Cost Allocation & People

Make sure cost guidelines are clear to all parties. Balance the use of charge-backs and market-based pricing against the labor involved in their administration. Above all, avoid the “It’s O.K. if they pay . . .” mentality; you need to stay focused on the company’s bottom line.

When it comes to people, remember that people are not machines — so don’t design roles and jobs or assign tasks as if they were. Finally, apply the Golden Rule: Serve your employees as you would have them serve your customers.

HR Shared Services 2.0 is Here TodayNew technology, including software, and Web 2.0 functionality is here today for HR Shared Services, including:

• SaaS (software as a service) capability

• Virtual staffing

• Better scalability — up and down

• A focus on delivery

SaaS-Enabled

Sophisticated software and interactive, intuitive interfaces allows a greater level of self-service by employees. Sound case management that is integrated with a robust knowledge base reduces the number of people necessary for operational functions.



Virtual Staffing

This is already becoming common. Many global and large national companies are already used to managing virtual teams and contingent employees; and many employees themselves work virtually.

Scalable

New technology allows for greater flexibility in shared services. Services and staffing are more easily adjusted to the workload (demand) and throughput (supply). This is achieved through purchasing technology on demand (SaaS), minimizing in-house IT development and support costs (again, by SaaS), flexible staffing arrangements, and point-solution outsourcing, i.e. subcontracting.

Delivery Focused

New tools and new ideas are fueling a focus on the delivery of services. With strategy and design of shared service centers already in a high level of maturity, more resources can be devoted to satisfying end users.

Challenges & SolutionsHR Shared services centers face a number of challenges — none of which are insurmountable. Challenges include tracking and reporting, consistency and accuracy in responses, dealing with a diverse and often decentralized workforce, response time and call resolution, ramp-up time for new CSRs, and matching staffing with call volume.

How can these challenges be overcome? By combining knowledgebase and case management technologies and best practices to achieve operational excellence.

By integrating an HR knowledgebase with HR-centric case management, you can provide CSRs with on-demand access to any member of the workforce’s personalized policies, benefits, onboarding forms and more to:

• Promote first-call resolution

• Increase call volume productivity

• Speed time-to-productivity for service reps

• Promote accuracy and consistency

• Search on employees with direct look-ups from integrated HRMS views

• Pre-populate HR-specific call tickets with employee data from the knowledgebase and/or HRMS

• Manage tickets easily with dashboards and reports



Shared services experts recommend a multi-tier approach.

Figure 3

In Tier 0, employees answer their own questions and complete their transactions through the employee portal. More complex queries go on to Tier 1, where employees send tickets to the shared services help desk. If questions can’t be answered or conflicts resolved at Tier 1, they go on to Tier 2, where subject matter experts become involved. Of course, the easier Tier 0 is to use and the more it is backed by the knowledge base, the fewer queries move up the chain.

Does the multi-tier system produce results? Barbara Levin, Senior Vice President of Marketing and Customer Community at Enwisen, provided two examples from her company’s experiences.

Figure 4

© Enwisen 2009



Figure 5

And again:

Figure 6



ConclusionIf HR is ever going to complete its move from transactional functionary to strategic partner in today’s employers, a multi-tier approach to delivering HR services will be essential. HR Shared Services centers not only provide the impetus for HR transformation, they improve the employee value proposition and even, arguably, an employer’s brand. By building a strong shared services value proposition and using the best practices outlined in this paper, employers can take advantage of new technologies and ideas to better serve their employees.

Based on the Human Capital Institute webcast, HR Shared Services: Best Practices, Business Model and Technology, April 2, 2009

Presenters

Jim Scully, Founder, HR Shared Services Network

Jim Scully is the founder of the HR Shared Services Institute, and HR Shared Services Network. He works with clients to evaluate, design and implement value-driven HR service delivery models that tailor world class solutions to meet the specific needs and characteristics of client organizations. In working with his clients, Jim brings both consulting and corporate experience. Jim served as Director of HR Shared Services for Georgia-Pacific Corporation in Atlanta. This HR Service Center delivered payroll, benefits, HRIS/personnel administration, and other functional HR services to an employee population of 50,000. Under his leadership, the HR Service Center gained year-over-year improvements in customer satisfaction while achieving significant operational cost savings. Jim was part of the original shared services design and implementation team before joining the leadership team, giving him perspective and lessons learned from initial design and go-live through stabilization and mature optimization.

Jim particularly enjoys helping new HR shared services implementations get off to the a good start by sharing real-life experiences and perspectives. He invites all those interested to join his LinkedIn group, the HR Shared Services Network, as an easy way of connecting with and learning from the HR shared services community at large.

Barbara Levin, Senior Vice President of Marketing and Customer Community,

Enwisen

Barbara Levin has more than 20 years experience in marketing executive roles with leading HCM software vendors and service organizations. She is a frequent author and speaker in the HCM industry - addressing how organizations strategically leverage emerging HR technologies to meet business initiatives and goals. Levin been very active in the Shared Services community. She was invited to Chair the 2008 HR Shared Services Week Forum and will also Chair the 2009 event.



Moderator

Christine Abbatiello

Christine Abbatiello serves as the Director of the Talent Strategy Community at Human Capital Institute, bringing to the organization nearly fifteen years of industry experience in human capital. She is committed to the concept of providing the most in-depth research and knowledge content to this broad and diverse community.

An honors graduate of Colby College with a degree in English Literature, Christine was one of the original employees of Answerthink/The Hackett Group. In her five years there as the Director of Executive Recruitment, she helped grow the organization to over 2000 associates and developed a fully integrated talent management program. Additionally, she has worked in corporate strategy, corporate and agency recruitment and industry consulting before joining HCI in 2008. Christine is committed to the concept of giving back to the community, and served as a volunteer employment transition advisor after the 9/11 Terrorist Attacks and Hurricane Katrina.

Community: Talent Strategy

Track: HR Service Delivery and Shared Services

Sponsor: Enwisen

hr shared services: best practices, business model and technology

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