In the current economy characterized by cutthroat competition, organisations are finding ways to promote efficiency, enhance productivity, and cut costs through the way they operate. One way to achieve this is through HR shared services. Shared services is when organisations centralise their administrative function. The function being centralised may have existed in more than one part of the organisation, and therefore sharing it will eliminate duplication, and thus allow for more focus to be placed on HR Strategy.
Advantages of HR shared services
Since shared services means there will be no duplication of effort, an organisation can cut their staff numbers leading to lower operating costs. This will in turn mean that they also do not need the extra offices, which means reduction in renting, or they can use the extra space for other things. Centralising services will also mean they are streamlined and they will be done in a consistent and accurate manner. By centralising services, HR can become more customer focused, which means improved quality of the services they provide. HR shared services will also mean the delivery of services on time and on budget.
Setting up shared services
When you want to take this option, you will need to take a critical analysis of your HR processes to determine if they can be centralized. You should evaluate the processes to see which are redundant, inefficient or outdated. You will then need to assess the impact the shared service model will have on them. The time you spend in refining and defining these processes will enhance the chances of achieving success when you employ the HR shared service model. Since analytics and reporting is one of the strengths of this model, an organisation will have better information on how to improve their HR services for the future.