SHARED HR SERVICES

The term ‘shared services’ refers to the central provision of HR services that are available to a number of parties and are therefore the same for all those who take them up. The nature of the services is determined by both the provider and the user. The customer or user defines the level of the service and decides which services to take up. Thus, ‘the user is the chooser’ (Ulrich, 1995). As described by Reilly (2000), administrative tasks tend to be those most commonly covered by shared services, for example:

● payroll changes; 

● relocation services; 

● recruitment administration; 

● benefits administration (including flexible benefits and share schemes); 

● company car provision; 

● pensions administration; 

● employee welfare support; 

● training support; 

● absence monitoring; 

● management information.

Services can be provided through the internet, a telephone customer help line, a consultancy pool of advisers, or ‘centres of excellence’ with expertise in such areas as resourcing, employee relations, reward or training. The increasing interest in shared services has been prompted by the more extensive and strategic use of HR information systems.

The organizations covered by the research conducted by Reilly (2000) on behalf of the Institute of Employment Studies identified one or more of the following reasons for providing shared services:

● HR will be consumer-driven, more accessible, and more professional; 

● the quality of HR services will be improved in terms of using better processes, delivery to specification, time and budget, incorporation of good practice, the achievement of greater consistency and accuracy; 

● the process can help to achieve organizational flexibility – a common service will support customers during business change; 

● it can support the repositioning of HR, moving it from a purely operational to a more strategic role so that HR is carrying out the role of ‘acting as a catalyst for change… anticipating problems and making things happen’ (Hutchinson and Wood, 1995).

The advantages of providing shared services include lower costs, better quality, more efficient resourcing and better customer service. But there are disadvantages, which include loss of face-to-face contact, de-skilling administrative jobs and, potentially, remoteness from the users. 

The steps required to introduce shared services in what is often described as an ‘HR service centre’ are as follows (all should involve users as well as providers):

1. Identify present arrangements. 

2. Obtain views from customers on the quality of existing services and what could be done to improve them (including the scope for sharing services). 

3. Define the areas for shared services. 

4. Define how shared services would be supplied, including who provides the service, where it is provided, how it is provided (this will include consideration of outsourcing as discussed later in this chapter). 

5. Decide on priorities. 

6. Plan programme (this could be phased and might involve pilot testing).