What are the benefits and challenges of implementing a shared services model for HR functions?

A GBS / Shared Services model is uniquely positioned to free up business resources from "busy work", speed up transformation and integrate service capability & digital technology. This helps leveraging Operational Excellence, Business Value Add and People Growth & -Engagement.

In my observation here are the Shared service model benefits - As the team can spread across a country or region. Team member has opportunities for career growth - Cost-effective so the team has higher benefits - Offer the opportunity of a multinational, multi-cultural environment through which Diversity and inclusion can be practiced. - Team often observes lower employee turnover. - Better Knowledge, skill sources and can be transferred among the team.

A shared services model in HR centralizes functions, leading to cost efficiency by reducing redundancy and streamlining processes. It improves service delivery with consistent, standardized processes and enhances access to specialized expertise across the organization. The model also facilitates better data management and analytics, supporting informed decision-making and effective workforce planning. Additionally, it offers scalability, enabling HR to grow alongside the organization and maintain efficient support.

I managed a global shared service center years ago, as our organization had consultants and employees on client sites as well as in various corporate offices. The benefits gained from this model are: 1. Employees have access to quick support, especially if companies leverage AI Chatbots to help automate answers to common questions instantly. If their needs are not met, access to escalated support is available. 2. Consistency of answers to questions, to ensure accuracy (from both AI solutions and from the well trained support specialist). 3. Operational efficiencies, as centralized services allow other HR Business Partners to focus on more strategic work that benefits the business.

Implementing a shared services model in HR offers numerous benefits, like cutting costs through streamlining and leveraging scale. By consolidating functions, it enhances efficiency and productivity, simplifying processes and enabling self-service options. A smart move for any organization aiming to optimize resources and enhance operational effectiveness!

From my perspective, these are the top 3 challenges for a captive service organization: a) no "pull" from the business - make sure your value case sits, define the outcome for transformation and running business performance, incl. efficiency, quality, and engagement/experience. b) lack of future skills - keep in mind there is strong evidence and need for new and changed skills, incl. digital and social - this is an opportunity for captive services beyond process admin, engage your "enterprise capabilities" at scale. c) lack of organizational flexibility - ensure flowing your talent to the high priority tasks dynamically in an ecosystem - incl. digital and contingent labor. Be consistent in framing, but human-centric in leading through.

Here are the challenges to be mindful - Timezone challenge - The manager needs a skillset to manage a distributed team. - Different customers coming from different cultural backgrounds will require different levels of soft skills among the team. - Requires to do different engagement activities among the shared service team to keep them engaged and motivated regularly. - Requires a great service management tool that can measure the performance of the team as well.

Some Challenges of implementing a shared services model for HR functions: ? Change management ? Standardization versus customization ? Communication and collaboration ? Technology and infrastructure ? Talent management and retention ? Maintaining a customer-centric focus By carefully addressing the challenges and leveraging the benefits, organizations can successfully implement a shared services model for HR functions, leading to increased efficiency, cost savings, and improved service delivery

Depending on how big the and the remit of the HR shared service, the challenge may be aligning the needs of different stakeholders. This may result in having to split payroll, as an example, and increase headcount in shared services because the needs of 1 stakeholder are very different form another. That’s an added cost to the shared service function which would sort of counter the objective of having shared services. Another challenge would be maintaining that personal touch with each stakeholder as the responsibility of the shared services team would be to deliver on data and results. This would need to be managed with regular meetings/updates to ensure all everyone is aligned.

To promote a change into a shared services model means to change how people work and mainly how power is shared in the organization. Normally it means that the HR team will be smaller, more specialized and more connected to the business once most of the operational tasks will be moved to the Shared Services Center. That can really scare some HR leaders that have during their path only done the operational part of HR.

It always makes sense to 'join forces' with others - and think beyond the idea of a HR Shared Services Model. For example, why not pool resources, tech and know-how and work with other functions with the same needs. It seems like it couldn't work, but it really does!

My Tips will be around how to handle those challenges which I wrote in point 2. So let's get started - Regularly train the team to keep them up to date. Normally I get the team internally trained in a circle among the team by turn. I bring partners for advanced skill training. - I organize regularly engagement activities among the team. It can be offline and online based on the status of the team. - Implement a great service management tool and regularly reinforce the team to make the best use of that. Here is the without reinforcement that tool will never be used. - Use that tool to track the performance and reward the great performances.

Usual "muscles" of a GBS/Shared Services strategy are Operational Excellence and Business Value Add. From my perspective and experience, adding a People Growth perspective as the heart is key. This implies a very consistent deployment e.g. in context of focused digital upskilling as well as in regard to new leadership expectations that leverage a culture of empowerment, shared ownership and UX focus.

It is time to introduce Generative AI to HR Shared Services. We can dramatically increase the options available for employee under Self-Service by using AI enabled Chatbots. This will increase efficiency by providing a truly personalized and “Always on” Delivery of HR Services. Modern AI tools are easy to use and HR users can be quickly trained to calibrate them. It is also very convenient for the end user. AI can also ensure strict adherence to policies in workflows while enhancing individual data privacy and tracking SLAs. But before you jump onto the AI wagon, ensure that your basic HR data is clean, structured, regularly updated and your policies are clearly defined. These form the pillars of any good Shared Services setup.

Choosing a shared services partner is about finding a like-minded collaborator. Seek a company whose values align with yours, fostering a shared vision. Evaluate cultural compatibility, service alignment, and commitment to long-term collaboration. Craft a flexible contract that reflects shared values, promotes communication, and adapts to evolving needs. Prioritize a partner invested in understanding your organizational culture, enhancing employee experiences, and upholding social responsibility. Ultimately, the goal is a partnership rooted in shared principles and mutual success.