1. Meeting notes from the IQPC 9th Annual Asian Shared Services & Outsourcing for HR Conference May 4-5, 2011 Kuala Lumpur, Malaysia www.asiahrblog.com 1 Overview of HR Shared Services
2. Objective of Shared Services www.asiahrblog.com 2 Combine common HR functions to for advantages economies of scale cost-savings Front-line HR focus HR strategic work business partner w/ BU managers
3. Shared Services Continuum - Centralization www.asiahrblog.com 3 pull together “back-office” administration under one roof in a single location, managed as a single team efficiency gain from elimination of the work that was previously done in multiple groups and locations processes reengineered optimize business workflow for results in most cases, work is simply relocated to a new location but, workflow largely remains the same before the centralization Generally speaking, centralization doesn’t go far enough
4. Shared Services Continuum –Shared Services www.asiahrblog.com 4 focus on customer service delivery by developing service level agreements (SLA) with performance metric score-cards cost is managed a true shared service model looks at end-to-end processes globally
5. Shared Services Continuum –Off Shoring www.asiahrblog.com 5 Companies are increasing their presence in the global marketplace The consequence for HR delivering global policies relevant to the new market weaving in corporate policies with local practices Companies gain by leveraging the consistency of a shared service model globally in disparate locations
6. Shared Services Continuum –Out Sourcing www.asiahrblog.com 6 Companies with matured shared services May look for further cost-reduction and labor arbitrage Turns to third-party service providers manage the organization’s transactional tasks may outsource a specific function such as payroll or staffing A more aggressive a strategy may outsource the entire shared services function only the strategic and business partnering function remains in-house
7. Foundation for Shared Services www.asiahrblog.com 7 Process Reengineering Is the process by which HR organizations thoroughly evaluate, assess and align HR policies Global consistency is a strict requirement Only critical country exceptions are allowed, typically for legal purposes. Allowing for business process exceptions, continuing to do things they used to be, creating process excursions, erodes the benefit of shared services.
8. Foundation for Shared Services www.asiahrblog.com 8 HRMS A common infrastructure allows for “sharing” business processes, service delivery and knowledge-base across the globe maintains all data related to the entire employee life-cycle rely on “employee self-service” Self-service is built on the premise of consistent policies which applies to employees globally reduce reliance on in-person contact with HR for basic queries and administrative services Moving HR to the intranet is an accepted practice
9. Foundation for Shared Services www.asiahrblog.com 9 Change Management Managing expectations is essential employee wants the same level of direct one-to-one contact convince management teams the value of offloading tactical work while line managers will want to see higher strategic work delivered by HR HR team will need to be retrained Skills to perform in a shared service center front-line HR will need to develop strategic consulting skills to work with business units. Any change will require executive sponsor such as the CEO and CHRO
12. Shared Services Functions – HR Administration www.asiahrblog.com 12 HR Administration: the various administrative work required of HR Transactions may include interview arrangement, training course scheduling, benefits management, and performance review processing strategy can reduce manual transactions Requires standardization in processes and policies coupled with an automation strategy
13. Shared Services Functions – Employee Queries www.asiahrblog.com 13 Employee Queries: Ad hoc employee requests take up a significant portion of an HR professional’s time Business group managers want HR to respond and provide service to the organization HR can provide value on strategic level but administrative and first-line response can be delivered in a different manner
14. Shared Services Functions – Vendor Management www.asiahrblog.com 14 Vendor Management: Many HR already outsource certain aspects of services may be benefits administrators, payroll processors or recruiting agencies A central management team to contracts negotiations, management of services and performance indicators
15. Shared Services Functions – Data Transaction www.asiahrblog.com 15 Data Transactions: All HR functions require access and use of relevant HR data ad hoc requests or silo data reporting slows down an organization’s ability tap into organization HR metrics and indicators ideally, HR functions can leverage on a single data platform
16. Location Strategy: Global Service Centers www.asiahrblog.com 16 Americas: The Americas region, particularly in the US, have the most established shared services models technology, common language, standardized policies make it easier to migrate towards a shared services platform Latin America: Depending on the size of the organization and growth strategy in Latin America countries, differences in culture and language may present challenge to shared services
17. Location Strategy: Global Service Centers www.asiahrblog.com 17 EMEA: Advancement in shared services has been slowed due to the region’s cumbersome regulatory and data-protection environment HR technology platforms are beginning to allow pan-Europe approaches to payroll and recruitment administration APAC - China: For many US MNCs, China presents the biggest market share potential for growth China is in its infancy stages of developing shared services organizations But, as companies grow, they invest in setting up infrastructure for shared services. focus on Greater China (China, Hong Kong and Taiwan) as teams have more experience, many companies are moving their Southeast Asia organizations under the China umbrella
18. Location Strategy: Global Service Centers www.asiahrblog.com 18 APAC India: As the global leader in business process outsourcing, India has developed core expertise in managing services for large multinational corporate clients. this may include benefits management, payroll processing, employee records and HR reporting
19. Transformation Challenges www.asiahrblog.com 19 A clear decision and direction set for by head of HR will help set the stage. Items to address: Why make any changes? What are the business and HR imperatives driving the change? How will the organization gain with this change? Define what is changing What stays the same? What changes? What are the desired results? Roles and Capabilities Define and train for skills needed for new roles in shared service center Develop new skills for those front-line HR professional remaining in the business partner role Employee Feelings/Emotions Helping employees through the change process
20. Conclusion www.asiahrblog.com 20 HR is required to evaluate its own service delivery strategy to meet this demand Business is growing in sheer size and complexity Expectation of HR service delivery is unprecedented A strategic assessment of HR structure can go a long way in optimizing HR both in terms of services and business partnership shared services model allows HR to deliver excellence in both the tactical and strategic aspects neither of which can be accomplished well if kept under existing conditions simply by adding more HR headcount
21. References www.asiahrblog.com 21 “New Era for HR Shared Services,” Business Week Research Services, September 2007 http://mediakit.businessweek.com/Products/Research_Services/White_Papers “Finding your place on the HR shared services continuum,” Mercer, 2008 http://www.mmc.com/knowledgecenter/Finding_your_place_on_HR_shared_services.pdf “Beyond Centralization: Driving High Performance Through Fully Realized Shared Services,” Accenture, 2007 http://www.accenture.com/us-en/pages/insight-beyond-centralization-fully-realized-shared-services.aspx IQPC 9th Annual Shared Services & Outsourcing for HR - HR Transformation Summit. May 4-5, 2011 http://www.ssohr.com/Event.aspx?id=442780
