Understanding potential HR Shared Services implementation issues ahead of time can help solve them more easily or bypass them altogether
Posted by Shannon Sheckler on August 26, 2016.
Organizations continue to explore and migrate a variety of HR work to shared services models. What originally started as a way to enhance the customer (employee) experience and save costs in transactional operations is evolving into a range of services to better support globalization, a virtual workforce, and global talent strategies. Reaching HR Shared Services’ (HRSS’) potential, however, means first clearing a few hurdles along the way. In the spirit of “forewarned is forearmed,” here are five of the most common issues you may encounter when transitioning to HRSS, along with some considerations for managing them.
Issue 1: Streamlining divergent HR processes
Many organizations migrate to HRSS as a way to standardize HR processes for greater consistency and efficiency across business units or geographies. But when HR is fragmented or in multiple countries, or HR processes have been localized (almost personalized) to meet the needs of a location’s HR organization and people, it can be a significant task to (1) develop a set of global processes and (2) localize only at a legal and regulatory level.
Tackling this task tends to generate passionate advocacy on both sides—people advocating consistency and people making a case for customization. It’s also common for organizations to uncover processes they never knew about, and more random systems in use than they care to imagine—which leads us to Issue 2.
Issue 2: Enabling a single set of HR technology
As organizations begin to take inventory of their HR systems, processes, and procedures, they’re likely to uncover a range of technology systems in use. For example, a global company may have multiple case management systems in use and various types of collaborative/knowledge sharing systems. For HRSS to be effective, one case and knowledge management system should be used globally. Also, if an organization is servicing its employees out of multiple strategic locations, it helps to have one system of record.
Winnowing disparate systems and evaluating alternatives to decide on “the one” system to standardize on is where organizations often experience difficulties. Many underestimate the effort required, from selecting vendors to setting system requirements to implementing new systems to final sunset of the legacy systems.
To combat Issues 1 and 2, consider mapping the current HR technology landscape and completing an assessment up front to understand which processes have been significantly localized (personalized) and could impact your organization from a risk, liability, and even brand standpoint. It likely won’t make sense financially to globalize every process. Instead, concentrate on processes critical for a consistent (positive) employee experience—typically talent acquisition and onboarding, and perhaps separation/exit management.
Issue 3: Driving HRSS adoption—on both sides
Implementing HRSS typically requires significant changes in how people work and think. The challenges involved in bringing about these behavioral and cultural shifts are usually greater than organizations expect. For example, if HRSS personnel are being redeployed from HR positions located directly within a business, they can experience culture shock and feelings of disengagement from being separated from the business, possibly becoming a retention risk.
On the business side, people used to dealing directly and personally with “their” HR representative within their group may try to bypass the new HRSS channels to interface directly with former colleagues. This can work in the other direction as well, with HRSS personnel reverting to reaching out to their contacts in the business to ask questions or seek information instead of following new procedures.
Underestimating the level of effort required to implement shared services is a common problem. Organizations should be prepared to launch a thorough change management program to determine the people affected by the change, how to reach them, and what messages to convey. “Classic” change management procedures, such as performing a change readiness assessment, obtaining top leadership buy-in and support, and soliciting change advocates from within the business and HR, can go a long way toward driving HRSS adoption and easing the transition.
Issue 4: Sequencing the shift
In an HRSS implementation, an organization must decide not only how to consolidate work, standardize processes, and implement supporting technology but when. Should it “lift and shift,” consolidating work into a shared services organization before standardizing processes and implementing technology? Should it adopt enabling technology before, or at the same time, as the shift to HRSS? Or should it change everything at once, simultaneously moving, standardizing, and technologically enabling shared processes? These are not trivial questions, as the sequence of change can have a noticeable impact on the ease and effectiveness of the transition.
Determining an implementation sequence is largely a matter of balancing costs and priorities. It’s important to verify that stakeholders have aligned on key objectives and high-level milestone timing and understand that this can be a multiyear/multiphase project. Consider various impacts, including costs, value-add to the entire organization, employee populations, and whether you need to solve for any immediate regulatory issues, and build an implementation roadmap accordingly.
Issue 5: Differentiating HR service models across all geographies
Even though an organization may want to service all employees the same way, globally this doesn’t usually make sense. For example, it’s probably not cost- or resource-effective to configure and localize processes for a country with 30 employees in the same way as a country with 40,000 employees. Organizations that don’t think through common and differentiated services early on are likely to add to their implementation burden down the road.
It’s typical for global HRSS organizations to provide a different scope of services to their various target markets and differentiate between countries with small, medium, and large employee populations. Large countries, for example, may provide the full breadth of shared services support to employees and managers in the supported local languages. Small countries may be primarily supported by in-country or designated regional teams, which are in turn supported by shared services centers.
Every enterprise has different needs, and every shared services implementation faces different challenges. Working with an experienced implementation team can help you stay on schedule and foresee and mitigate issues earlier rather than later, incorporating lessons learned from other organizations and following a proven playbook.
It may not be possible to eliminate all issues that could arise during HRSS adoption. But it is possible to take steps to prevent the most common problems from sabotaging your initiative before it gets off the ground, or delaying potential benefits and ROI after implementation. Know before you leap—and don’t hesitate to reach for a guiding hand.
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.