Posted by Art Mazor and Gary Johnsen on October 23, 2014
As HR finds its seat at the business table, it faces increasing scrutiny to demonstrate, like its counterparts around that table, how HR contributes to the business strategy and objectives.This scrutiny is good for HR in that it moves the function further from a purely transactional cost center to a strategic business partner. It also forces HR to be more accountable for how it manages the business of HR and aligns the cost of its operations and programs to business objectives. A chargeback process is a common “go to” approach for providing visibility into internal or shared costs and increasing accountability for cost management, yet can bring a mixture of benefits and pitfalls if not designed and implemented properly.
Done well, chargeback programs can offer a number of benefits:
In a Shared Services setting, chargebacks to the business for HR and other back-office functions tend to be fairly common. Chargebacks for HR CoEs (Communities of Expertise) are far less common and often fraught with challenges. In many cases, CoE chargebacks can actually drive the opposite behaviors and ways of working than desired. Consider these common issues:
Realizing benefits and avoiding pitfalls takes appropriate up-front planning and care to avoid common mistakes. In our next post, we’ll look at the qualities of effective chargeback programs, walk through practical implementation steps, and share some lessons learned.
|Art Mazor is a principal in Deloitte Consulting LLP’s Human Capital practice. He leads the firm’s HR Transformation Strategy capabilities and collaborates with complex, global clients across industries to transform Human Resource strategy, service delivery, and organizations with a business-driven focus.|
|Gary Johnsen is a specialist leader in Deloitte Consulting LLP’s Human Capital practice. He has a passion for building the intersection between business and people strategy, helping organizations design and implement HR operating models, practices, structures and processes that drive meeting business strategy.|
As used in this document, “Deloitte” means Deloitte Consulting LLP, a subsidiary of Deloitte LLP. Please see www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries. Certain services may not be available to attest clients under the rules and regulations of public accounting.