Posted by Art Mazor and Gary Johnsen on October 30, 2014
In Part I of our discussion of HR chargebacks, we noted that chargebacks are a natural step in the evolution of HR from a purely transactional function to a strategic partner with the business. Done well, chargeback programs can offer a number of benefits — HR clarity, efficiency, cost control, and more. Done poorly, the desire to add accountability and alignment to HR costs and programs can backfire. Here in Part II, we explore some of the ways to execute chargebacks effectively.
Chargebacks can be calculated in a number of ways, based on any of the following: business unit revenue generation, headcount, or number of transactions or services provided; HR time spent on business unit activities; a budgeted flat rate; or a hybrid of headcount and activity-based charges. Regardless of the method, the chargeback fees should be market competitive and the process and system should be:
Achieving these qualities, realizing benefits, and avoiding common pitfalls can be helped with thoughtful, up-front planning. Some steps to consider:
Finally, based on our work with clients to help establish effective chargeback systems, we offer the following lessons learned and tips for HR:
|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.|