HR Shared Services and Outsourcing
The future HR Shared Services capability
Has your organization implemented service centers, deployed a shared services model including centers of expertise, or maybe outsourced HR and related technology capabilities in support of HR delivery? Think you’ve reached the future state? Think again.
For more than 15 years, companies of all sizes and levels of complexity, in virtually all industries and around the globe, have worked to improve the effectiveness and efficiency of their HR operations. More recently, they’ve combined outsourcing — both broadly and selectively — with ever-improving technology for customers and operators of HR services. These changes have offered the goal of reaching future state more quickly.
Once, the vision of the future state cast the HR function as a way to deliver basic services to support the administrative requirements of employing people. As more companies globalized and grew, the complexity of those requirements increased. The cost and challenge of supporting those HR needs increased as well. In this environment, shared services and outsourcing became specific tools for delivering complexity in an effective way.
Many large and midsized companies turned to outsourcing as a way to realize the future state of HR service delivery. They transferred a large portion of the HR department’s processes, technology, and people to outsourcing providers with the expectation that those firms would effectively transform the delivery of HR by providing an outsourced shared services model. Today we know that the fully outsourced approach to realizing business objectives proved more challenging than many anticipated.
As Deloitte’s 2011 Global Shared Services Survey reaffirms, overall shared services deployments have moved the needle in the areas their designs called for. Cost reduction, controls, and process efficiency are the top three outcomes globally — and these results have remained consistent over the last few years. Many companies continue to work toward similar goals aligned with the future state they’ve envisioned for years.
By now, a more effective, efficient HR operation is simply not good enough. The many stories about challenges and achievements, whether in applying insourced, outsourced, or blended approaches, reveal a landscape that demands new thinking.
In the new vision of a future state, effectiveness and efficiency are table stakes. To realize this vision, complex businesses must also drive profitable global growth into emerging markets, flow talent seamlessly around the enterprise, and permit increasingly rapid merger, acquisition, and divestiture transactions on a grand scale. Together, these needs define a new future state for HR shared services and outsourcing.
To get there, HR shared services will have to bring significant improvement to:
- Driving a company’s talent agenda
- Accelerating mergers, acquisitions, and divestitures while improving the quality of integration
- Improving leaders’ ability to focus on the core business through high-quality services