HR Shared Services:

Best Practices,
Business Model
and Technology

HCI White Paper

April, 2009
HR Shared Services: Best Practices, Business Model and Technology

HR Shared Services:
Best Practices, Business
Model and Technology

This information in this whitepaper is based on the Human Capital

Institute webcast HR Shared Services: Best Practices, Business
Model and Technology, held April 2, 2009, and the information
provided by its presenters, Jim Scully, Founder, HR Shared Services
Network, and Barbara Levin, Senior Vice President, Enwisen.

Introduction
Transforming HR to spend less time on administration and transactions, and more
time on strategic work, has been easier said than done. HR shared services plays a
vital role in achieving this transformation. Effective HR Shared Services can actually
improve the delivery of HR services with fewer resources and lower costs, allowing HR
talent to focus on adding value to the business. But how do you get there?

This paper will explain the concept of HR Shared Services, its value proposition,
functions and scope, and the best practices that make it effective. The paper will also
discuss the multi-tier approach to HR Shared Services , and provide a preview of “HR
Shared Services 2.0”

HR Shared Services Today

Very simply put, HR Shared Services consolidates and shares – across an organization’s
locations, divisions and business units – the administration and execution of the
delivery of HR services to the workforce for the purpose of:

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HR Shared Services: Best Practices, Business Model and Technology

• Better consistency
• Economies of scale
• Improved quality
• Better ROI on technology investments
• Realigning HR talent
• Streamlined costs

More than a decade after large U.S. companies began to adopt shared services
in human resources (HR), this delivery model has proven its worth by cutting
administrative costs, reducing transaction errors and generating greater employee
satisfaction with basic HR processes. Now, as companies devise human capital
management (HCM) strategies to give them a competitive edge in hiring, training and
deploying employees to meet business goals, HR shared services has entered an era
of increased relevance and value.1

Functional Scope
HR Shared Services vary depending on the model used, the employer’s needs and
the needs of its employees. Less prevalent functions include relocation assistance
and Workers Comp administration. More prevalent are call centers, and personnel
and data administration. In between are a wide range of functions that include the
following:
• HR Reporting & Analytics
• Defined Benefit Administration
• Defined Contribution Administration
• Unemployment Comp. Administration
• Leave Administration
• Staffing & Recruiting
• Employee Relations
• Training Administration
• Benefits Administration
• Payroll Administration
• HRIS Support

By consolidating these many transactional functions HR can begin its transformation

to strategic partner.

A New Era for HR Shared Services – Business Week Research Services

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HR Shared Services: Best Practices, Business Model and Technology

What makes up the DNA of a shared services center? There are three major
components: The functional scope of the center (how and at what level it performs
its services), the value proposition to the employer and employees, and the service
scope (the actual services it offers). Myriad other factors contribute to the DNA: The
employer itself, its history, background, values, leadership, and corporate culture; the
population to be served and the technology base.

Moving Toward HR Shared Services

Once you have decided to proceed what steps do you take? It’s important to realize
that the value proposition and the anticipated scope of the project affects people,
process, the organization, and technology. These four fundamentals in turn will affect
the shared services initiative. These broad headings are further delineated as shown in
Figure 3.

Figure 1. Pivotal Early Decisions

© HRSSN 2009

In the initial stages of planning a shared services center, it is important to know that
each of the four major fundamentals are by nature interactive. That interaction will
shape the key early decisions about implementation. More than a few of the pivotal
decisions revolve around the functional and service scope of the shared services
center. What are the best practices in this regard?

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HR Shared Services: Best Practices, Business Model and Technology

Shared Services Best Practices

As shown in Figure 2, there are functional and management best practices with a
significant overlap in the realm of operation.

Figure 2. Shared Services Best Practices

© HRSSN 2009

Let’s look at the operational best practices in more detail.

Case Management
Efficient case management is highly automated — routing, documentation, and
tracking should always be automated. It should also support root cause analysis,
trend analysis, and manpower planning. Case management should fully integrate with
HRMS, knowledge management, and the employee portal.

Knowledge Management
Sound management of the knowledge base is a crucial task. The knowledge base is
at the heart of a shared services center. One key practice: Use the knowledge base
as a supplement to the human brain, not as a replacement. Knowledge management
shares some practices with case management, specifically the need for automation in
order to promote fast, consistent research and resolution, and the ability to integrate
with HRMS, case management, and the employee portal.

Service Level Management

“Sound fundamentals” describe the best practices associated with service level
management. There are two important considerations to achieve excellence in service
level management: Commit to the standard output of effective processes, not the
minimum acceptable service level, and strive to consistently meet customer needs
at the lowest possible cost. Then measure your service level, not because it can be
measured but because it is valued by your stakeholders.

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HR Shared Services: Best Practices, Business Model and Technology

Delivery Model & Process

The list of best practices in this area of shared service is long but essential:
• Focus on end-to-end process accountability
• Strive for first call resolution and cradle-to-grave case ownership
• A
 lign with broader organizational culture, values and the leadership and decision
making structure
• Focus on the total cost of service, not just direct delivery costs
• M
 inimize low-quality input channels (fax, e-mail/hard copy forms, spreadsheets);
don’t let “garbage in”
• Don’t centralize manual data entry; capture data one time, at the source
• M
 ake standardization and automation prerequisites for functional/service scope
inclusion

Cost Allocation & People

Make sure cost guidelines are clear to all parties. Balance the use of charge-backs
and market-based pricing against the labor involved in their administration. Above
all, avoid the “It’s O.K. if they pay . . .” mentality; you need to stay focused on the
company’s bottom line.

When it comes to people, remember that people are not machines — so don’t design
roles and jobs or assign tasks as if they were. Finally, apply the Golden Rule: Serve
your employees as you would have them serve your customers.

HR Shared Services 2.0 is Here Today

New technology, including software, and Web 2.0 functionality is here today for HR
Shared Services, including:
• SaaS (software as a service) capability
• Virtual staffing
• Better scalability — up and down
• A focus on delivery

SaaS-Enabled
Sophisticated software and interactive, intuitive interfaces allows a greater level of
self-service by employees. Sound case management that is integrated with a robust
knowledge base reduces the number of people necessary for operational functions.

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HR Shared Services: Best Practices, Business Model and Technology

Virtual Staffing
This is already becoming common. Many global and large national companies
are already used to managing virtual teams and contingent employees; and many
employees themselves work virtually.

Scalable
New technology allows for greater flexibility in shared services. Services and staffing
are more easily adjusted to the workload (demand) and throughput (supply). This is
achieved through purchasing technology on demand (SaaS), minimizing in-house IT
development and support costs (again, by SaaS), flexible staffing arrangements, and
point-solution outsourcing, i.e. subcontracting.

Delivery Focused
New tools and new ideas are fueling a focus on the delivery of services. With
strategy and design of shared service centers already in a high level of maturity, more
resources can be devoted to satisfying end users.

Challenges & Solutions

HR Shared services centers face a number of challenges — none of which are
insurmountable. Challenges include tracking and reporting, consistency and accuracy
in responses, dealing with a diverse and often decentralized workforce, response
time and call resolution, ramp-up time for new CSRs, and matching staffing with call
volume.

How can these challenges be overcome? By combining knowledgebase and case

management technologies and best practices to achieve operational excellence.

By integrating an HR knowledgebase with HR-centric case management, you can

provide CSRs with on-demand access to any member of the workforce’s personalized
policies, benefits, onboarding forms and more to:
• Promote first-call resolution
• Increase call volume productivity
• Speed time-to-productivity for service reps
• Promote accuracy and consistency
• Search on employees with direct look-ups from integrated HRMS views
• Pre-populate HR-specific call tickets with employee data from the knowledgebase
and/or HRMS
• Manage tickets easily with dashboards and reports

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HR Shared Services: Best Practices, Business Model and Technology

Shared services experts recommend a multi-tier approach.

Figure 3

© Enwisen 2009

In Tier 0, employees answer their own questions and complete their transactions
through the employee portal. More complex queries go on to Tier 1, where
employees send tickets to the shared services help desk. If questions can’t be
answered or conflicts resolved at Tier 1, they go on to Tier 2, where subject matter
experts become involved. Of course, the easier Tier 0 is to use and the more it is
backed by the knowledge base, the fewer queries move up the chain.

Does the multi-tier system produce results? Barbara Levin, Senior Vice President of
Marketing and Customer Community at Enwisen, provided two examples from her
company’s experiences.

Figure 4

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HR Shared Services: Best Practices, Business Model and Technology

Figure 5

And again:

Figure 6

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HR Shared Services: Best Practices, Business Model and Technology

Conclusion
If HR is ever going to complete its move from transactional functionary to strategic
partner in today’s employers, a multi-tier approach to delivering HR services will
be essential. HR Shared Services centers not only provide the impetus for HR
transformation, they improve the employee value proposition and even, arguably,
an employer’s brand. By building a strong shared services value proposition and
using the best practices outlined in this paper, employers can take advantage of new
technologies and ideas to better serve their employees.

Based on the Human Capital Institute webcast, HR Shared Services: Best Practices,
Business Model and Technology, April 2, 2009

Presenters

Jim Scully, Founder, HR Shared Services Network

Jim Scully is the founder of the HR Shared Services Institute, and HR Shared Services
Network. He works with clients to evaluate, design and implement value-driven HR
service delivery models that tailor world class solutions to meet the specific needs
and characteristics of client organizations. In working with his clients, Jim brings both
consulting and corporate experience. Jim served as Director of HR Shared Services
for Georgia-Pacific Corporation in Atlanta. This HR Service Center delivered payroll,
benefits, HRIS/personnel administration, and other functional HR services to an
employee population of 50,000. Under his leadership, the HR Service Center gained
year-over-year improvements in customer satisfaction while achieving significant
operational cost savings. Jim was part of the original shared services design and
implementation team before joining the leadership team, giving him perspective
and lessons learned from initial design and go-live through stabilization and mature
optimization.

Jim particularly enjoys helping new HR shared services implementations get off to
the a good start by sharing real-life experiences and perspectives. He invites all those
interested to join his LinkedIn group, the HR Shared Services Network, as an easy way
of connecting with and learning from the HR shared services community at large.

Barbara Levin, Senior Vice President of Marketing and Customer Community,

Enwisen
Barbara Levin has more than 20 years experience in marketing executive roles with
leading HCM software vendors and service organizations. She is a frequent author and
speaker in the HCM industry - addressing how organizations strategically leverage
emerging HR technologies to meet business initiatives and goals. Levin been very
active in the Shared Services community. She was invited to Chair the 2008 HR Shared
Services Week Forum and will also Chair the 2009 event.

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HR Shared Services: Best Practices, Business Model and Technology

Moderator

Christine Abbatiello
Christine Abbatiello serves as the Director of the Talent Strategy Community at
Human Capital Institute, bringing to the organization nearly fifteen years of industry
experience in human capital. She is committed to the concept of providing the most
in-depth research and knowledge content to this broad and diverse community.

An honors graduate of Colby College with a degree in English Literature, Christine

was one of the original employees of Answerthink/The Hackett Group. In her
five years there as the Director of Executive Recruitment, she helped grow the
organization to over 2000 associates and developed a fully integrated talent
management program. Additionally, she has worked in corporate strategy, corporate
and agency recruitment and industry consulting before joining HCI in 2008. Christine
is committed to the concept of giving back to the community, and served as a
volunteer employment transition advisor after the 9/11 Terrorist Attacks and Hurricane
Katrina.

Community: Talent Strategy

Track: HR Service Delivery and Shared Services
Sponsor: Enwisen

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