Shared services trend set to shake up HR

16 February 2015, HR Daily

Shared services operating models are becoming more prevalent, and their rise heralds a shift in HR professionals' roles and requisite skillsets, says Accenture Australia operations lead Russell Ives.

More businesses are adopting operating models that bring services from several parts of an organisation into one area to share resources and improve efficiency, Ives told HR Daily.

"Typically, what's happened is organisations have classic functional silos around recruiting, talent development, payroll, [and] other employee services, and they have grown up over time.

"Sometimes they might be quite disparate because of acquisitions, growth and other sorts of things, and as a result, inefficiencies start to build in in the delivery of those services, but also those inefficiencies contribute to a detraction in the employee experience as well," he says.

Applying a shared services model to HR enables the team to use a common infrastructure, which can help it deliver more than just a "functional outcome", says Ives.

"The objective is to move and reduce the emphasis on transactional and administrative work. So optimise the reporting, optimise the transaction processing, and move that to the background so that it is done seamlessly and silently," he says.

"It provides an opportunity to move into that qualitative employee support domain, which in part has been impacted because there's so much clerical and administrative-type activity that consumes the HR team's time. So that shared services shift does... provide that extra time window to focus on the employees' needs."

Consequently, however, the skillset required of HR will change, which is one of the biggest challenges with moving to a shared services model, Ives says.

"It's a change in focus away from administration, away from transaction processing, away from reporting, [and] into analysis; insight; the application of what we're seeing in the data and the information about our employee base; what we're hearing from the employees; and being able to interact more effectively and respond to those employee needs," he says.

HR professionals must assess which new skills and talents they'll need to work under a shared services model, Ives says. "The biggest benefit [for HR] is this shift from being processors, in some senses, to being able to spend more time on dealing with the employees, on developing strategies to improve recruiting, talent development, retention, and ultimately to support whatever the business is trying to achieve." Employees driving the shared services trend Employees increasingly require a high-level HR service and more sophisticated ways to access it, Ives says.

"What organisations are realising is that they can't deliver that promise without actually looking at how they deliver their underlying HR services, and that's where the shared services—and outsourcing potentially to complement that—start to come together to actually address the improvement of delivery of those services," he says.

"This is becoming an increasingly rich battleground to secure resources and to—more importantly—retain resources, because employees are starting to increasingly look for opportunities to work with organisations that value them [and] that provide them with a good experience as an employee." Shared services models lead to more seamless employee interactions—often by enabling companies to adopt new technology, such as online and mobile-enabled platforms, Ives says.

"There is a much stronger focus on shared services as an enabler for change in the way employee services are delivered," he says. "There is a clear trend that is starting to move in that direction above and beyond what we've seen in the past – which is the basic payroll servicing, employee administration and so forth." C‐suite sponsorship essential Ives has seen HR drive the move to a shared services operating model, but he says generally such a big organisational change requires leadership buy-in. "Without a doubt it needs to be sponsored at the C-suite level—whether it's the COO; whether it's the CEO—because there are organisational change implications and there are also organisational financial benefits that accrue from doing that, which make it easier if the leadership team is on board for the initiative," he says.

"There are instances where the shared service initiative has been driven from HR, but quite often it's tended to be a cross-enterprise function type initiative. Some organisations will start with the financial and accounting activities, and then determine it makes sense to bring some of those more transactional activities out of an HR domain into a shared services function."