HR shared services, concept and case

A HR shared services function essentially aim to give effect to this separation, and through this, effect cost savings and improve HR support to the business.

The benefits of a HR shared services function lies mainly in the delineation of responsibilities and earmarking areas for centralisation. In this regard, a significant benefit can be derived from centralising organisation structure maintenance, HR and succession planning as well as talent management.

In the sourcing of staff, HR shared services can provide support in terms of advertising or mobilising potential candidates, response handling, pre-hire actions and the delivery of specialist services (example psycho-metrics). The function can also a play strong governance role in an environment like South Africa, where BEE, disability etc. need to be taken into account in the recruitment and selection processes.

With benefits administration and payroll processing, segregation of duties needs to be done with great care. It would be wrong to think that the total payroll value chain (input as well as output) could be centralised. However, if the bulk transactional work is centralised it could not only improve HR service delivery, but have major cost-saving effects.

Implementation

Considering the implementation journey, three key imperatives come to the fore:

• Improving design and planning certainty is probably the most important consideration of the whole project. It is as important for the process and system design as it is for all other aspects of the establishment of the HR shared services function (organisational, staffing, competence, logistics etc.).

  Often these projects are based on erroneous assessments of the "as is" vis the "to be" states and this inevitably creates tension and conflict as the roll-out progresses. It also results in the unplanned escalation of cost and even project failure. In this regard the Empire State Building analogy serves as a good example of how beneficial sound front-end planning and design can be.

Consider the following:

- The building was constructed in 1930, and approximately 80% of the total project was spent on planning and design;
- When construction started the frame rose at 4.5 storeys per week; and
- The building still holds the record for the fastest construction of mega structures.

• A process and system, no matter how good, can only function if the required human capability is available to drive it. In terms of this staffing the shared services function should at least stay abreast of the roll-out of the systems that will drive the HR/payroll shared services value chain. Not addressing this will only delay roll-out, undermine benefit realisation and eventually credibility of the function. Implied is that the staff utilised in shared services are competent, and it follows that where the required competence does not exist training and certification need to precede system roll-out.

• Lastly is the issue of change management. Research shows that effective change management is a key differentiator of success in most large-scale projects in this area. However the face validity (the perception of the success) of change management interventions is seldom satisfactory.

  It can be argued that, while the macro change (desired end state) and communication journey is often articulated the following is not always addressed adequately:
  - Making sure that change champions are real influencers in the organisation and prepared to allocate the time to "carrying the message" to the rest of the organisation. Often change champions are those who have time and have little if no influence to ensure effective integration of the required changes. The result is that consultants are used to supplement in this role, an aspect that creates an impossible situation as these individuals are advisers, trainers and specialists and do not have the authority to play a change leadership role; and

  - In addition there is over reliance on the mere execution of the change methodology without making sure that the "hearts and minds" of people change. Executing the methodology is a linear activity, while changing the mindsets is more akin to innovation, where the perspective of people needs to change. For this, change leaders, advisers and specialists not only need knowledge of the change method, but also in-depth knowledge of the processes, systems and business in general. Their ability to build and maintain relationships with key role players are also often overestimated.

Conclusion

The HR/payroll shared services journey is an important innovation that has become an established feature of modern HR and also human capital management systems implementation. It is, however, a journey that needs to address the correct issues to yield benefits. As the old saying goes "he who wants to have the honey need to ensure the sting ... "