An HR shared services model can help HR departments deliver their services to employees

in a faster, more effective way. It presents an opportunity to separate the operational from
the strategic so each part of the department can be most effective in providing a positive
employee experience. Let’s have a closer look at HR shared services, its benefits and
challenges, as well as HR shared services best practices.

Contents
What are HR shared services?
Benefits of HR shared services
Challenges of HR shared services
HR shared services maturity model
HR shared services best practices

What are HR shared services?

HR Shared Services is a centralized hub of HR administrative and operational duties that are
characterized by employee self-service and automation through leveraging technology, and
multi-tiered levels of service and service responses. This allows organizations to provide
standard HR services in the most efficient way. The different tiers in an HR Shared Services
provide common services such as:

1. Payroll 6. Recruiting operations

2. Employee data management 7. Learning services
3. Benefit and leave administration
4. Relocation services (international and domestic)
5. HRIS
6. Reporting and analytics
7. and the HR service center.
HR shared services is a part of a multi-tiered HR service delivery model. It enables the other
parts of the HR department to focus on strategic initiatives.

Benefits of HR shared services

Implementing HR shared services has multiple benefits for your organization, including:

1. HR becomes more strategic. The division of responsibilities frees up the more

experienced HR professionals to focus on strategy. This provides more opportunities to
measure HR’s performance through Human Capital metrics that align its success to the
organization achieving its strategic objectives. This is critical for HR to be a true business
partner by contributing to the development of the business strategy. It ensures
organizational business strategy has a strong focus on people management and a positive
employee experience.
2. Consistency and compliance. HR matters are always handled in the same, consistent way,
which helps ensure that you’re compliant with rules and regulations. This leads to a better
employee experience and to mitigation of risks within the organization.
3. Operational excellence. By assigning clear responsibilities for administrative processes,
organizations can reach operational excellence. This happens through streamlined processes
and optimized workflows. On top of providing a better HR service, operational excellence
also results in an improved employee experience and efficiency.
4. Improved employee experience. Employees get their issues resolved and find relevant
information quickly and conveniently. This has a positive impact on their digital, as well as
their overall employee experience. Employees have grown to expect all systems to be
engaging, to be easy to navigate, and to satisfy their needs and expectations. This includes
systems they interact with at their jobs. If there is a gap between expectation and experience,
this leads to employee frustration.
5. Cost reduction. HR shared services can help organizations cut costs in several ways. For
example, you need less experienced HR professionals to handle transactional HR services,
which results in lower labor costs. What’s more, the efficiency achieved through streamlining
and simplifying services also helps reduce costs.
Challenges of HR shared services
While HR shared services can help human resources achieve operational excellence and enable
the department to become more strategic, putting it into action is not always straightforward.
There are several challenges organizations face.

1. A lack of a digital roadmap for the majority of organizations. An increase in automation

requires a clear digital agenda and roadmap for Human Resources to implement technology
that will create efficiencies and drive a better employee experience. Example technologies
include simple tools such as live chat, virtual agents such as Service Now, and live chat, but
also more advanced applications such as Robotic Process Automation (RPA) and HR
analytics and reporting tools. However, many organizations implement digital tools on an ad
hoc basis, rather than with a coherent HR digital transformation plan in place.
2. Creating urgency for investments in shared services and/ or HR technology. It is difficult
to clarify the business impact of HR shared services. That’s why organizational leaders might
not immediately understand its benefits and why they should prioritize it. With this in mind,
you need to work on clearly defining the value shared services add to the business.
3. One size doesn’t fit all. HR shared services unfortunately may not be the right solution for
every business unit. There are instances where HR shared services will benefit and
complement a business unit, yet for another unit, it may be a hindrance. It is, therefore,
critical to conduct a cost-benefit analysis to determine the value it brings to which business
units, the overall organization, and the cost. An example would be working together with a
designated global up skilling partner that is very effective in building skills for the common
areas of business but may lack up skilling capabilities in highly specialized areas of the
business.
4. Knowledge transition. When transitioning to an HR shared services model, it is necessary to
ensure proper documentation of processes and activities from SMEs to new employees
working in the HR shared services center. This is a project. There is the need to manage the
time it would take to document and transfer the knowledge as well as apply the knowledge so
the HR shared service achieves a satisfactory level of efficiency.
5. Collaborating within the HR team and across the organization can suffer. There might be
a disconnect between the different parts of the HR team, namely between the shared services
and other, more strategic, or specialized parts of the team. That’s why managers have to put
conscious effort into strengthening the team mentality. Likewise, having an HR shared
service center does not negate the need to continually interact and engage with employees.
Therefore, it is important to continually build relationships and engage with key stakeholders
in the business unit. Good systems support successful businesses, but it is through strong
relationships, systems become efficient to meet the needs of internal customers.
Job Enlargement and Enrichment
Job enlargement and job enrichment are both used as techniques for employee motivation and
satisfaction. However, they differ a lot from each other. The critical difference is job
enlargement is a horizontal expansion of duties and tasks across the same organizational level,
whereas job enrichment is the vertical expansion of the roles, responsibilities, authority and
activities along with the different hierarchical levels.