What’s Next for HR Shared Services?

ScottMadden and APQC have been collecting HR shared services benchmarks for more than ten years. During this timeframe, HR shared services (HRSS) have evolved. Could you share a few of the most significant changes that you have seen?

As HRSS organizations have evolved, we’ve seen expanded scope, revised governance structures, and greater use of technology and automation. First, shared service organizations have moved up the value chain to offer more complex services beyond their original targets for administrative and transactional work. As the scope of work has expanded, skills and staffing levels in shared services have had to adapt as well.

We see broader use of “Tier 2” specialists to deliver these advanced services, and we have seen the required skillsets expand to include consultation, critical thinking, and data analytics. From a governance standpoint, we are seeing more HRSS organizations report to multifunction leaders or non-HR executives than in the past due to the expansion of shared services models. Finally, HRSS organizations are embracing advanced technology and automation to gain further efficiencies and improve the employee experience with HR.

APQC is often asked about the services that HRSS organizations should consider adding as they mature. As HRSS organizations mature, which services support HRSS implementation as organizations move functions from HR centers of excellence (COE) and HR business partners into HRSS organizations?

There are several services that are good candidates for mature HRSS organizations. Some of the most common we see include employee and labor relations, talent acquisition, organizational effectiveness, business analytics, and project management services. For employee relations, some responsibilities may remain with the COE and HR business partners, but service centers often manage intake and case triage, and, in more mature models, they can run or support investigations.

With talent acquisition, HRSS can handle many aspects, including sourcing and screening candidates, scheduling interviews, preparing offer letters, and coordinating employee onboarding. HRSS is well-suited to offer business analytics services given its position as a hub of HR and employee data. Similarly, HRSS often leads transformation efforts for the organization, so leveraging this experience and skillset to offer project management office (PMO) services more broadly is a natural evolution.

Many of APQC’s members are looking to automation to improve HRSS performance. What are some of the most common ways that you are seeing HRSS organizations using automation?

Automation is being successfully adopted across both customer interfaces and functional processes. We see chatbots used to supplement live agents, as they can provide quick answers to basic inquiries or help route them to the right place. This real-time service option is often preferred by many employees.

For talent acquisition, we have helped clients select and implement virtual assistant technology powered by artificial intelligence to automate many aspects of candidate interactions and handle large-scale recruiting needs with great success. HRSS organizations are also using robotic process automation (RPA) to automate routine processes such as employee data management, payroll management, and employee exits.

Are you seeing the Great Resignation phenomenon affecting HRSS organizations? What are a few steps that HRSS leaders can take to retain HRSS staff?

Service center roles have relatively high turnover in normal job markets, so the Great Resignation has certainly made this a bigger issue for HRSS organizations. Some organizations have not been able to meet service levels as staffing declines, and delays in hiring replacements have become more pronounced. However, as more organizations adopt hybrid work models and introduce greater flexibility in work schedules, this is helping retain staff who might otherwise leave.

The ScottMadden/APQC benchmarking study collects performance metrics that point to the future of HR shared services. What are a few key performance indicators (KPIs) that all HRSS organizations should track?

Similar to a balanced scorecard approach, we recommend choosing metrics that cover your customers, employees, efficiency, and cost. Staffing metrics inherently relate to your overall cost and also tie into efficiency metrics. Some of the key metrics we recommend that are also included in our benchmarking study are:

• First contact resolution
• Average speed to answer
• Customer satisfaction
• Average employee turnover
• Number of calls/inquiries per service center employee
• Number of transactions per service center employee
• Total service center cost per employee served