HR Shared Services

The Foundation for Integrated Talent Management

and High Performance

Introduction
The multi-polar world brings together competition
from both established players and aggressive up-andcomers into an arena with a truly global footprint.
To survive, organizations everywhere feel challenged to
be more strategic and leverage their internal processes
and talent more efficiently and effectively. Indeed,
high performing organizations know that the negative
impact of decentralized and inconsistent service
delivery is high.

When faced with these challenges,

many organizations focus quickly
on driving transactional efficiency
and turn to the structural benefits of
shared services such as centralization
of resources and labor arbitrage.
Shared services is not, however, simply
about reducing the cost of the Human
Resources (HR) function. It is also
about creating the enduring foundation
needed to achieve consistently high
and compliant HR service delivery.
It is about supporting a relentless
focus on talent management through
a singular commitment to continuous
improvement of the employee experience.
It is about providing HR professionals
with the engine they need to drive
their talent management agenda.

Accenture believes an effective shared

services capability streamlines and
standardizes data and processes,
building a foundation for HR to provide
the integrated talent management
capabilities that set an organization
apart from its peers. HR shared services
is not just for organizations starting out
new, but also for those organizations
that have already implemented
shared services for other back-office
functions. Organizations that have
consolidated like functions or implemented shared services highlight that
transitioning to this model can be
difficult. Accenture experience has
shown that successful HR shared
services outcomes occur when leadership takes a holistic approach, one
that focuses not only on cost, but
also on developing a comprehensive
HR strategy which seeks to transform

the people, end-to-end processes, and

technology to create a service-oriented
model valued by the broader business.
When the HR function is viewed as a
peerand given an equal voice at the
leadership tableit can directly impact
the bottom-line performance of
an organization.

Figure 1. The talent management lifecycle.

Talent Mindset

Discover
Your sources
of talent

Define
Your talent
needs

Metrics and
Analytics

Develop
Your talent
potential

Deploy
Your talent at the right
place at the right time

Talent Culture

Building a
Foundation for
Talent Management

and strategic management across the

talent management lifecycle (see
Figure 1). Additionally, HR professionals
oftentimes are mired in less value-add
transactional activities.

As organizations have begun expanding

globally, functions such as supply
chain, finance and customer relationship
management have moved toward
globally organized automation and
efficiency. HR functions, on the other
hand, have lagged, playing catch-up
in terms of adopting tested principles
of standardization and industrialization. In consequence, although
significant enterprise and HR data
exist within most organizations, HR
managers struggle to obtain and
leverage information to drive insightful

Because data resides across disparate

departments and internal groups in
most organizations, simply finding,
consolidating and standardizing
people-related information poses such
a challenge that HR managers often
never get to a point where they can
analyze the data. Without this analysis,
they have difficulty making informed
decisions about where the best talent
lies, how internal talent may fill needs
elsewhere in the enterprise and a host
of other people-related decisions. In
the end, HR managers focus on what
they can seethe cost of HRinstead
of focusing on the human capital
investment. As a result, leadership
views HR as administrators rather than
strategic business partners.

HR shared services helps break this

cycle. If the primary impediment to HR's
ability to become a valued business
partner is its transactional load,
the first answer must be to process
transactions as efficiently as possible.
The common infrastructure HR shared
services provides, whether insourced
or outsourced, can consolidate and
deliver transactional and information
services to internal and external HR
customers in an operationally-efficient
and cost-effective way. When this
infrastructure is coupled with strong
governance, enabling technologies
and reliable data, HR shared services
provides a strong foundation for talent
management (see Figure 2).

Figure 2. The foundations of talent management.

Talent Mindset

Discover
Your sources
of talent

Define

Metrics and
Analytics

Your talent
needs

DevelopMetrics and
Your talent
Analytics
potential

Deploy
Your talent at the right
place at the right time

Talent Culture

Foundation of efficient and integrated HR operations and support

HR Information
Systems

Service Delivery

By providing cohesion and confidence

in employee data, HR shared services
gives HR managers the tools to
complete the strategic analysis and
support business decisions. For
example, HR managers can analyze
and monitor workforce metrics to
track business performance in specific
areas such as:
 eographic Expansion: Utilizing
G
integrated and consistent HR data
to power the management and
movement (if necessary) of talent
and skills across geographic lines to
support talent requirements.
Workforce planning. Bringing
together personnel, organization, cost
and performance data across all facets
of the business (e.g., geographies,
operating units) to identify workforce
supply and demand.

Organization
(Governance &
Roles)

Succession planning. Providing

better, more integrated data to support
succession planning and retention,
which encourages proactive development and support of the organizations
employees.
Performance management. Identifying
and retaining high performers and
key workforces helps organizations
avoid the high cost of recruitment
and training.

The Challenges of
HR Shared Services
As with all major initiatives, navigating
the transition to shared services comes
with challenges. Implementing this
model for the HR function brings its
own set of unique considerations.
HR viewed as high-touch. To begin,
the very notion of moving HR away
from local teams has made the transition to a shared services model harder
to implement. Local (in-country/
region or local operating unit) leaders
appreciate the feeling of control they
get from having HR physically nearby.
There is also considerable sensitivity
surrounding HR information and its
handling. Fears of organization and
individual exposure mean that the HR
function, by its very nature, requires a
level of delicacy not seen in other areas,

such as IT and Finance. To implement

HR shared services, organizations
must find equilibrium between operating
HR as a business and employees need
for personal connection. Fundamentally,
however, organizations need to treat
HR as a business to achieve sustainable
success.
Scope, roles, and responsibilities.
The full scope of HR processes (from
hire to retire) and the corresponding
split of strategic and transactional HR
activities among business partners,
centers of expertise, shared services
and local HR delivery must be designed
to capitalize on available skills and
specialist knowledge, economies of
scale and labor arbitrage. Fully realized
HR operating models rely on a network
of roles and responsibilities. Specifically:
Business partners who translate
operating unit needs into HR
requirements and evaluate HR
services delivered to their units.

Centers of Expertise who design and

build the HR programs that meet the
operating units HR requirements.
Shared service centers that deliver
transactional and high volume HR
services to customers.
Local HR delivery resources who
support on-site, high touch
processes such as recruiting or
employee relations.
Focusing solely on the shared services
component will drive efficiency gains,
but without the other roles, success
can only go so far. Determining how to
split duties and how the players should
interact with each other is critical to
achieving the desired benefits.
Shared services back-office. Like
most shared services back-office
functions, the HR back-office function
includes case management and

Levi Strauss & Co.s senior management launched a company-wide effort to reduce
costs and refocus the business on profitable growth. This effort required a transformation
of HR to reduce costs and better enable talent management across the organization.
The company set up a major change program for HR, including consolidation of HR
systems; process and transactional activities moved into shared service centers; a tightly
defined performance metrics and service management framework; and outsourcing of
administrative operations. As a result, the HR organization is better positioned to support
company leaders in their quest for profitable growth. For example, HR is now able to help
executives select the right talent, emphasize the right capabilities, and develop creative
solutions to motivate and reward people.

operations teams that manage dayto-day transactional activities and

processes. What is unique to HR is that
these teams generally require a higher
degree of functional expertise than
other back-office functions. While HR
shared services certainly has its share
of repetitive transactional work, the
HR area also requires centralizing and
consolidating disparate HR practices
while still considering the following:
the complexities of local country and
regional legislation; the adoption and
practice of existing policies and guidelines; the specific language of HR;
and, the prerequisite skills, sensitivities
and knowledge of teams working
within an HR landscape.

professionals seeking information to

drive HR programs) and true end-user
individuals (including hourly and
salaried workers, new applicants and
hires, seasonal workers, and retirees).
Service to each group must reflect
their particular needs and available
communication channels.

Differentiated service users. The end

users of HR services and information
comprise a diverse group, including
business-focused individuals (such
as high-level executives and HR

Complexity of multi-nation deployments. In cases involving organizations

spanning multiple geographies,
deploying HR shared services requires
accommodating disparate financial,
tax, data privacy and labor laws.
Centralized HR policies and procedures

HR service growth and adjustment.

HR service requirements typically
change over timesometimes rapidly
to reflect changing governmental
regulations and organizational policies.
The HR shared services solution must
be designed within a flexible framework that can accommodate the
shifting HR landscape that it serves.

must reflect local requirements and

customs, while still attaining benefits
from harmonization.
Ultimately, shared services success
comes from meticulously defining the
work from end-to-end so that it can
be completed by the most appropriate
team and supported by a strong
governance structure. Whether within
HR or any other functional area, this
process requires providing a clear
definition of the service, establishing
clear roles and responsibilities,
determining the necessary inputs and
outputs required to provide the service,
and creating the service level agreements, internal performance measures,
and governance processes for the
proper follow-through.

SAPs vision for its HR department was for it to become a strategic business partner, and
not just be seen as a purely administrative function. Combining routine functions across
group offices and moving them to a shared services organization was seen as an ideal way
to achieve this objective. This would free local HR staff to concentrate on more complex
and higher value work, while at the same time saving moneyanother important objective.
The fact that shared services could achieve this through streamlining duplicated functions,
increasing efficiency and moving to a lower cost location played a major part in building
the business case for shared services.

Figure 3. The potential benefits of the HR shared services journey.

Global End-to-End
Process

Range of
Benefits

Visibility, Governance

Transition from Centralization

to Full Value of Shared Services

Many organizations stop here leaving

value behind and decreasing the likelihood
of sustainability and scalability

Performance
Management
SLAs

Continuous
Improvement

Re-engineering

Metrics, Targets,
Scorecards

Clear two-way
services agreed
by clients

Lack of Clarity

Simplified, standardized Services, Costs

system/process

Corporate Culture

New Location
Wage and real estate arbitrage

Consolidation

Exceptions Increase
Shadow Cost Increase

Centralization

The key to addressing the challenges

outlined in the previous section is to
use HR shared services as a catalyst
to transform the whole HR function.
The shared services model itself, while
an enabler to high performance, can
not be held fully responsible for HR
success. In fact, organizations may
actually put themselves on the path
to languishing benefits if they do not
push beyond the physical location and
process reengineering components
of a shared services implementation
(see Figure 3). Indeed, many organizations that started shared services are

Shared Services
revisiting their operations to complete
the implementation in the context of a
holistic HR service delivery model.
Accenture believes that an organizations
ability to successfully execute its HR
strategy depends on implementing not
only shared services as part of the HR
service delivery model, but also the
remaining three cornerstones of HR
transformation (see Figure 4):
1. Enhanced HR roles and
competencies. Within a transformed
HR environment, the accountabilities
and responsibilities of HR roles are
clearly defined so the right work gets
done by the right resources at the
right cost.
2. Common policies and processes.
Standardized processes form the
basis for delivery of consistent
and predictable HR services to
operations at a lower unit cost per
transaction/interaction.

Benefits of centralization recede due

to lack of shared accountability for
performance and increase in shadow
costs over time

Tenure, wages, back-office

mentality

Re-organization and de-layering

Addressing the
Challenges

Service / Cost
Transparency

3. Integrated HR information systems.

An organizations technology landscape
ideally incorporates both service
management and functional applications
within a common HR technology system
across the organization, potentially
supported by integrated specialist
applications. This system facilitates
the streamlining of HR processes
and provides an accurate source of
management information to underpin
business decision making, such as
workforce planning analytics.

Figure 4. The four cornerstones of HR transformation.

Enhanced HR roles and competencies

New service delivery model

The right people doing the right work in

the right place
Align HR and HR investments with the business

Single point of contact for all HR services

End-to-end service management and
measurement

HR transformation
Common policies and processes

Integrated HR information systems

Consistent treatment of people

Reduce duplicate work

Consistent "one-truth" HR data

Improve business controls
Facilitate employee self service

From a practical point of view, to

address the challenges of implementing
HR shared services, organizations must
focus on:
Vision and sponsorship. Senior leadership must understand and promote the
concept that HR plays a very strategic
role in the organizations success.
They must be aware that progressive
HR groups operate in an integrated
fashion, both within HR and with the
broader organization. Without senior
leaderships direction that HR must
be incorporated into the fabric of the
organization as a strategic partner, HR
managers will not have an opportunity
to exercise their newly unleashed
analytic skills.

Business decision-making. For the

shared services operating model to
work, HR must think and act as a
business within the business. At times,
this might mean finding less customer
facing, but equally effective means of
delivering service. Taking action that
seemingly reduces service levels and
high-touch support for their end
customers (employees, retirees and
applicants) will run counter to
many HR professionals outlook.
It is important to challenge the
local delivery paradigm to deliver
measurable benefits.
Governance. Shifting to a fully
realized and transformed HR service
delivery model entails significant
change and requires strong oversight
to ensure that the changes are
understood, adopted, maintained and
improved over time. Governance must
define and enforce the use of the
right role for the right activity and
rigorously pursue standardization.

Additionally, a well defined governance

function can mitigate challenges
associated with location specific
legalities and regulations by understanding the various rules and working
to implement policies and procedures
that meet the requirements with the
least divergence from the standard.
Skill level. In tandem with the
reorganization of roles and responsibilities under the shared services model
and broader service delivery model,
employees must have, or be given the
opportunity to develop, the right skills
to perform these new activities. For
example, the changing nature of the
HR business partner role requires a
mindset shift from the transactional
to the analytical and strategic. The
skills required are very different and
not all resources make the transition
seamlessly.

Technology. Common HR technology

platforms and enablers challenge
traditional thinking about HR delivery.
They allow for remote processing,
provide capture of people-related data
(which in turn allows more powerful
analysis) and force a level of standardization that is generally not seen on a
unit-by-unit basis. Organizations need
a clear strategy around implementing
and utilizing these tools in conjunction
with other enterprise-wide systems
(such as financials) to fully enable the
overall operating model.

10

Progress tracking. The saying what

gets measured, gets done holds
particularly true when talking about
transforming the HR function. Organizations must establish measures and
goals and track results to ensure
progress. Performance results will show
where the model needs additional
work and pinpoint where integration is
not yet complete. When implementing
these tracking measures, organizations
need to focus not only on the financial
imperatives, but also on areas such as
progress towards organizational and
cultural change as defined by the vision.

Establishing a customer-centric HR
service delivery model will fundamentally
change the way HR interacts with the
business. If implemented successfully,
the model can help improve the
consistency and predictability of HR
service provided to the business.

SAP worked with Accenture to implement

an HR shared services solution. Within six
months after the "go live" date, the SAP
shared service center had already processed more than 13,000 requests. Many
requests are now settled through intensive
use of portal applications and self-service
functions and 80 percent of the remaining
requests are now being settled at the first
level by using the Employee Interaction
Center.

Conclusion

Implementing HR shared services demands more than simply centralizing the HR

function within the shared services model. It requires designing and implementing
key organizational, process and technology componentsall of which play a critical
role in delivering and managing the end-to-end HR service.
To that end, organizations must have a clear vision of the strategic HR capabilities they
need to run the business. When implemented correctly, HR shared services provides a
consistent, scalable foundation to increase the focus on integrated talent management.
It also enables a strong, predictive and flexible HR organizationone that is dynamic and
able to adapt with the business to absorb and drive organization and strategic changes.
The unique aspects of transforming the HR landscape require strategic thinking,
institutional fortitude and a rigorous focus on execution excellence. Those that can
navigate the challenges and take a broad perspective, looking beyond human resources
as a set of transactional processes to how HR can enable the overall business strategy,
will drive sustainable value and equip themselves to compete in a rapidly changing
global marketplace.

11

For more information on HR shared

services and the content of this Point
of View, please contact us at
fpm.service.line@accenture.com.

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For over 20 years, Accenture has

continuously pushed the boundaries
of what the shared services operating
model has to offer. We help deliver
shared services programs that yield
outstanding results, teaming with
our clients to realize shared services
solutions that enable high performance
across their entire organization.
Our shared services and business
process outsourcing professionals
help transform finance, human
resources, procurement, customer
relationship management, logistics
and IT management operations for
clients operating around the world.
Moreover, we augment our experience
with world-class assets, standardized
methods based on industry practices,
and a broad program of ongoing
research into the latest trends and
opportunities in shared services that
informs our engagements. For more
information, visit www.accenture.com.