The shared service model can help businesses reduce costs, avoid duplication of effort, and allow a greater focus on HR strategy.
HR Shared services is an increasingly common organisational response to creating more efficient service delivery. Costs can be reduced through the economies of scale from centralisation of services. Increased customer focus can lead to better quality outcomes. Technology can offer various routes to user friendly delivery (eg call centres, intranets, etc.). Choices, though, have to be made on the nature of the shared services operation and on the relationship between HR and line managers and employees.
This factsheet outlines how shared services work and the benefits of introducing them in an organisation. It takes a closer look at the typical tier structures and provides guidance on how to plan for and implement shared services across an organisation. Finally it highlights some considerations for HR when implementing shared services.
Based on research on leading fifteen organisations, there seem to be three principal drivers to the introduction of HR shared service. These are:
Organisations feel that shared services can reduce costs by three main means:
Quality can, it is thought, be improved through shared services, both in itself and by HR being more customer focused. This is achieved by: