HR Shared Services: How to Get to a "Top Performing" Model

Top Performance Through Better Structure

The HR service model has undergone significant changes over the past decade, under pressure to support the business more effectively with its talent challenges, and has shifted towards shared services as a means of optimizing HR service delivery.

Traditional HR support was generally based in the field and embedded into business operations where it primarily provided administrative services on-site. This decentralized model is now recognized as a fairly inefficient means of supporting today’s increasingly global and digital organizations, and is being widely replaced by modern, optimized HR operations.

To more accurately gauge the extent of this transition and understand the details of its underlying framework and drivers, ScottMadden, in partnership with APQC, ran a series of studies that measured HR service and performance, specifically across four key areas:

1. Delivery Model & Operation
2. Staffing
3. Performance
4. Management Infrastructure & Technology

The latest study highlights some unique trends in HR shared services’ strategic evolution: today, more HR organizations are using a tiered approach for service delivery, and the trend is clearly towards reporting to multifunction shared services heads. The study also indicates that field HR organizations are being redesigned with the result that the top quartile of respondents now service twice as many company employees per field HR employee as the median level (and more than four times the bottom quartile).

In addition, there has been a shift toward Global Business Services (GBS) over the past five years, with more HR services now run across regions. More than three-quarters of the organizations surveyed, in fact, now operate centers serving multiple regions or countries, with global management and integration. This trend toward GBS is particularly dominant in mature centers (>5 years), which also tend to run multiple shared services centers (SSCs).

20% OF HR SHARED SERVICES ORGANIZATIONS ARE ‘TOP PERFORMERS’

While there has been an overall shift toward better practices, one out of five respondents set themselves apart by their significantly improved performance metrics.

This differentiation is particularly apparent in three core measures:

1. Total employees (and retirees, where relevant) served per total HR headcount (60% higher for Top Performers compared to comparison group*).
2. Total employees served per HR center employee (more than 100% higher for Top Performers compared to comparison group).
3. Total employees served per field HR headcount (nearly 300% higher for Top Performers compared to comparison group).

In terms of staff effectiveness, the study shows, Top Performers operate head and shoulders above their peers. This performance is reflected in higher customer satisfaction rates compared to their peer group, at >80% levels.

Top performers also demonstrate leadership in key performance measure such as first contact resolution, average speed to answer, employee turnover, and cost, whereby cost savings are apparent across a variety of measures:

• total service center cost per customer
• cost per transaction, and
• cost per call/inquiry.

How are Top Performers Identified?

Among the more than three dozen metrics covered in the study, seven key performance indicators (KPIs) were identified. Study participants who performed in the top quartile for all these KPIs were labeled Top Performers, with all other participants falling into the ‘comparison’ or ‘peer’ group. The characteristics of this group was then examined in detail, to determine what drives top performance in HR service.

FIND OUT which 10 Characterisdics drive "Top Performance" in the full report:
10 Characteristics of Top Performing HR Service Organizations – What sets the top 20% apart?