HR Shared Services – Challenges to overcome

Zurich, 24.10.2012 Stefan Linde

www.pwc.com

PwC

People & Change Management- creating competitive advantage

Talentmanagement • Strategic Workforce-Planning • Talent Management • Retention Management • Performance Management • Qualification and Training • Demographic Change

HR-Transformation • HR-Strategy • HR Organisation and Process Design • HR Business Partnering • HR Shared Services • HR-Outsourcing-Beratung • HR-IT-Strategie • Saratoga HR Benchmarking

Organisational Change • Organisation Design • Change-Management • Restructuring • Program- and Portfolio- Management

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PwC

Stefan Linde Education Masters degree in economic engineering (Wirtschaftsingenieur), TU Hamburg

Professional background Stefan started working as a consultant for Coopers & Lybrand (later PwC Consulting ) in 1998,

joined IBM Global Business Services in 2002 and returned to PwC in 2007 He is a specialist for Shared Services & Outsourcing, HR Transformation, HR Strategy, HR

Process & Policy Design, Org. Design and Change Mgt. He has led large scale projects at international companies across industries from design to implementation.

Stefan also leads the global PwC Organisation Design network.

Relevant work experience (selection) Project assessment of a global HR transformation for a global Swiss Bank Global Project Lead for a multifunctional SSC for HR : detailed process and organisation design and

implementation of Business Partners, Centres of Expertise and 4 Shared Service Centres in 4 regions of the world. The project was embedded in a larger program to increase efficiency and align the back-office functions of Finance, HR, Procurement and IT

Project Lead Germany in a global HR Transformation for a German-based Chemical & Pharmaceutical company: Global HR Transformation to move from a decentralized, business unit owned HR landscape to a modern HR operating model based on 3 regional Shared Services, global Centres of Expertise and Business Partners. Germany was first to go-live in the new concept with 25 .ooo users.

Project Lead for Global Process Design in the above HR Transformation for a Chemical & Pharmaceutical company. The process design was done jointly with the SAP HCM experts

Project Lead for the global outsourcing of the payroll and travel expense department of a Global Bank. The work included the definition of the scope, negotiation with the provider and communication to the impacted department based on an overall change concept

Process and Transition solution of a Global HR Outsourcing Deal for a Global Automotive Company including change measures for realization

Partner Leader People & Change PricewaterhouseCoopers AG New-York-Ring 13 22297 Hamburg Direct: +49 40 6378 2108 Mobile: +49 170 7851844 E-Mail: stefan.linde@ de.pwc.com

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Transforming the HR function is evolution M

atu

rity

Multi-employerNetwork

Single Outsourcing

Partner

InternalStabilization

Best in class

~ 1:185

Upper quartile

~ 1:117

Median

~ 1:82

Lower quartile

~ 1:55

Transformed HR

Business-focused HR Programs

Full use of self service tools

Level 1 Level 2 Level 3

Streamlining

Process Improvement

Automation

ERP Implementations

Outsourcing selected

HR Processes

Introduction of self service tools

Common Processes

Consolidation of ERP platforms

IT systems providing data

analytics

Shared Services across business

units & countries

Establish HR skills to partner with the

Business

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Strict role segmentation and clear communication channels are prerequisites for any transformation

Strategic

Operational

Bu

siness

HR

HR Business Partner (HR BP)

Manager

Employee

Other Users/Customers

Centre of Expertise

(CoE)

Shared Service Centre (SSC) Centralized

HR

Ser

vice

Del

iver

y

Decentralized

Employee/ Manager

Self Service

(ESS/MSS)

Call Center

HR

Bus

ines

s Pa

rtne

rs

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The proven 4-tier HR operating model is the leading principle for operating HR effectively

Employee Service Center

Generalist: Provides support for all inquiries, handles standard transactions and FAQ’s, and conducts basic research

Employee Service Center

Handles complex transactions and provides solutions, controls policies conducts research, and resolves issues

Tier 1 Tier 2 Tier 3

All

Em

loye

e A

cces

s

Tier 0

Via Interactive Voice Response

Employee & Manager Self Service

Knowledge Base and other ESS/MSS Solutions Access through Web or Wireless Devices

Subject matter expert: Center of Expertise: Development of process, policy and strategy, policy interpretation

Business Partner: Operationalizes HR strategy to business-specific needs

Operational/Business Support

80 - 90% of Contacts 10 - 20% of Contacts 3 - 10% of Contacts

SSC driven Functional / Business driven

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Typical Pitfalls in setting up the HR Operating Model

HR Business Partner

Center of Expertise

HR Services

Objectives & Business Case

Processes Organisation Technology

People

1. Center of Expertise develop HR programs that don´t match the requirements of the Business

2. CoE fails to consider the implemen-tation when designing HR programs

3. Business Partners continue to execute parts of the administration

4. Business Partners feel and behave like a separate, distinct HR unit

5. The SSC work at arms lengths lacking clear focus on service, efficiency, standardisation and governance

6. Continuous improvement for SSC is requested but not budgeted, thus limiting the results

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Critical success factors for a successful HR transformation

Holistic planning : adopt a long term view

Choose the route: don´t go off-road with a race car

Balance of ambition: know what you´re good at

Top-management support: the captain steers the ship

Involvement of IT: involve early and use sensibly

Consistent decision making: beware of “zombie-decisions”

Active change management: involve the business from start

Definition of success: how do you know that you´re there?

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Recent Studies from PwC on HR transformation

Return on Change 2012: brand-new study on the value of change mgt to poject success (German only)

HR SSC Survey Switzerland 2011: Status of HR transformation in large

Swiss/international companies (English & German)

Strategic Workforce Planning 2012: Swiss & German study on

the use of WfP in companies (English &

German)

HR Business Partner 2012: German study

on the acceptance of HR Business Partnering in

companies (German only)

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Swiss HR SSC Survey 2011: snapshots on the results

Outside SSC

SSC

100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

0%

Best Practice Area

Global FTE distribution within complete HR

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Swiss HR SSC Survey 2011: snapshots on the results

90

80

70

60

50

40

30

20

10

Number of employees per HR FTE (global base)

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Snapshot from German Return-on-Change Survey Projects with Change Management are much more successful

Probability of project success

47% 74%

0%

10%

20%

30%

40%

50%

60%

70%

80%

w/o project specific Change Management with project specific Change Management

Return on Change

„Wie hoch ist die Erfolgswahrscheinlichkeit von Veränderungsprojekten in Ihrem Unternehmen ohne bzw. mit begleitenden Maßnahmen?“

Der Mehrwert von Change Management, der „Return-on-Change“ wird im Rahmen statistischer Kennziffern (wie Marktanteil und Rentabilität), sowie als Erfolgswahrschein-lichkeit erhoben. Die Erfolgswahr-scheinlichkeit von Veränderungs-projekten steigt mit einer systematischen Veränderungs-begleitung um 27%.

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Thank you for your attention

Stefan Linde Partner Leader People & Change D: +49 170 7851844 stefan.linde@de.pwc.com

This publication has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this publication, and, to the extent permitted by law, PricewaterhouseCoopers AG, its members, employees and agents do not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it. © 2011 PwC. All rights reserved. In this document, “PwC” refers to PricewaterhouseCoopers AG which is a member firm of PricewaterhouseCoopers International Limited, each member firm of which is a separate legal entity.